Citigroup Endorses Revised Bankruptcy Provisions

Key senators have reached a compromise with Citicorp that could speed passage of bankruptcy provisions that allow judges to modify mortgages and reduce or "cram down" the principal amount of the loan to the fair market value of the property. As part of the agreement, judges could only modify existing mortgages, not new mortgages. [As press time, it was unclear what the cutoff date is.] "Citigroup's support means that the dam has broken across the mortgage industry. Now we have a real chance to pass this legislation quickly," said Sen. Chuck Schumer, D-N.Y. Senators Dick Durbin, D-Ill., Chris Dodd, D-Conn., and Schumer want to include the bankruptcy provisions in the economic stimulus package that Congress is expected to pass by mid-February.