Good news; passage of this will, without question, raise mortgage rates for everyone: Mortgage 'Cramdown' Plan Hits Turbulence in Senate

From The Wall Street Journal:

A central piece of President Barack Obama's plan to aid strapped homeowners is running into turbulence in the Senate as Democrats scramble to secure support from both parties' moderates.

The bill, which has already passed the House, would allow judges to write down mortgage debt for people in bankruptcy court. Democratic leaders have long sought such a "cramdown" provision for homeowners.

But in the Senate, the measure has become a flash point for tensions between lawmakers who seek to aid homeowners -- in particular homeowners who owe more than their house is worth -- and lawmakers who feel such assistance penalizes people who have kept up with their debts.

Financial institutions have long fought against court-ordered mortgage workouts, saying they would add risk to lenders, raise mortgage rates and clog courts. Mortgages have long been excluded from personal-bankruptcy filings.