On April 30, Sen. Dick Durbin's amendment to S. 896, the Helping Families Save Their Homes Act of 2009 (the Act), which would have allowed bankruptcy judges to modify mortgages on primary residences, was defeated with twelve Democratic senators voting against the amendment. The House version of the Act, which provides a servicer safe harbor, Hope for Homeowners improvements, Federal Housing Administration changes and reforms to the Federal Deposit Insurance Corporation insurance fund, was previously reported on in the February 27, 2009, and March 13, 2009, editions of Corporate and Financial Weekly Digest. A substitute version of S. 896 was introduced by Senate Banking Committee Chairman Christopher Dodd and Sen. Richard Shelby that does not contain bankruptcy cramdown provisions and that contains different servicer safe harbor provisions from the original legislation.
For information on the Senate vote, click here.
For the new text of S. 896, click here