Stop Bank Foreclosures Tips

“This is a breakthrough day,” the senior senator from New York said in a news conference on Capitol Hill. “We’ve been stymied because the banking industry opposed this simple provision, which is key to getting a floor to the housing market.”

The so-called “cramdown” proposal has been backed by Democrats over the past year as a potential solution to the foreclosure crisis. Consumer advocates and Democrats say it would prod the lending industry to be more aggressive about modifying loans because of the looming threat of having a bankruptcy judge involved.

In a letter to lawmakers, New York-based Citigroup’s chief executive, Vikram Pandit, said the change to bankruptcy law “will serve as an additional tool to the extensive home-retention programs already in place to help at-risk borrowers.”