Bill would let judges act to save mortgages

WASHINGTON – Congress is considering legislation that would allow bankruptcy court judges to rewrite loan terms for people at risk of losing their homes, a change that supporters say could save a half-million borrowers from foreclosure through early 2009.
Under this plan, judges could lower the interest rate of a mortgage on a primary home, extend the life of the loan or forgive part of the debt – as they currently can for vacation homes, farms and investment properties. Doing so could reduce by one-quarter the 2 million foreclosures expected in the next 18 months, according to Moody's Economy.com.
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