Real Mortgage Relief

Barack Obama's proposal to allow bankruptcy courts to reduce mortgage balances was fortunately defeated in the Senate due primarily to Republican opposition, although the Democrats are seeking to change the bill to attract additional votes.

Passage of Obama's plan would mean higher mortgage rates and less credit availability, as lenders would need to factor in the greater risk of losing money if a homeowner filed for bankruptcy.

That is why a Democrat-controlled Congress in the 1970's had the good sense to exempt mortgage debt from the type of debts that a bankruptcy court could modify.

It is a sad commentary when a law from Jimmy Carter's era makes more sense than what the Democrats are offering up today.