Mortgage Cram down bill, will it give loan modifications and short sale offers teeth

The wall street journal just reported that the new mortgage cram down bill just passed a big hurdle in the United States Senate. Apparently Citibank is not opposing the proposed bankrutpcy measure.

It is designed to give people who file a chapter 13 the ability to cram repayment plans down the lenders throats. It is said to aid in principle reduction.

This would be amazing.

In chapter 13 you could strip out a second lien and then cram down a principle reduction on the first.

How much more fun will it be to tell the lender to accept this reasonble short sale and relieve my client from the deficiency or we will file bankruptcy strip the second and cram a principle reduction down your throat matches or exceeds this short sale offer.

Obviously this will give Loan Modification negotiation some teeth as well. You can reduce principle now or we will cram down your throat later.

We might start seeing T.V. shows about lawyers again.

For more on Mortgage Cram Downs and Loan Modifications

Of course there are some downsides to this bill.

What do you think this will do for prices and sales of existing homes?