ALTA Opposes Cram-Down Amendment

December 10, 2009

The American Land Title Association joined several other associations and trade groups in sending a letter Dec. 10 to the House of Representatives urging opposition to an amendment that would let bankruptcy judges rewrite mortgages to lower homeowners' monthly payments.

The House is debating Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173) and an amendment proposed by John Conyers that would allow judges to reduce, or cram down, the amount owed on a mortgage, change the interest rate, or stretch out the term of the mortgage.

ALTA believes that while the housing market struggles to recover, adopting the cram down amendment would inject more risk into the mortgage market. The Conyers amendment would detract from efforts by Congress and the Obama Administration to stabilize the housing market, including HOPE Now and the Home Affordable Modification Program (HAMP).

“The massive potential losses generated by judicial modification will directly impact Fannie Mae, Freddie Mac and the government mortgage guarantee agencies, and could well reverse recent gains in credit sector strength,” the letter said.

The Conyers Amendment waives the current debt limit for Chapter 13 filings, thereby allowing even wealthy homeowners who can afford to repay their mortgage to take advantage of the system and file bankruptcy. The amendment also significantly weakens previously approved language that prevented homeowners who committed fraud when applying for their mortgage application from taking advantage of the cram down.

ALTA was joined in signing the letter by the American Bankers Association, American Financial Services Association, American Securitization Forum, Consumer Bankers Association, Consumer Mortgage Coalition, The Financial Services Roundtable, The Housing Policy Council, Independent, Community Bankers Association, Mortgage Bankers Association, Securities Industry and Financial Markets Association, and U.S. Chamber of Commerce.

Click here to view the letter.

Contact ALTA at 202-296-3671 or

North American Title Insurance Company (NATIC) is a seasoned title insurance underwriter, helping title agents to achieve their individual business goals for more than 50 years. Today, the company conducts real estate settlement services in 39 states and the District of Columbia through a network of experienced, independent agents.