A push by Democrats to include in the proposed Wall Street bailout new legislation that would allow U.S. judges to modify mortgages for people in bankruptcy potentially could save hundreds of thousands of homeowners from future foreclosure, judges and other legal experts say.
The provision is being demanded as part of an effort to make the $700 billion bailout plan for financial institutions more populist, so that individuals will see more of its direct benefits. “The government is providing a trillion dollars in assistance to financial institutions to deal with the problem that people can’t afford to pay mortgages, so there ought to be something in the program to help people pay their mortgages,” said Samuel L. Bufford, a U.S. bankruptcy judge in Los Angeles. “It’s a matter of fairness.”
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