Granting bankruptcy judges the authority to modify mortgage loans would provide relief to homeowners facing foreclosure who can't get the servicers of mortgage-backed securities to restructure their loans, a consumer bankruptcy attorney has told a House Judiciary subcommittee.Henry Sommer, president of the National Association of Consumer Bankruptcy Attorneys, testified that about half of the securitized trusts prohibit loan modifications. If Congress amends the bankruptcy code to allow loan modifications, it would "resolve that problem," he said. Steve Bartlett, president and chief executive of the Financial Services Roundtable, warned that giving bankruptcy judges a free hand to modify loans would make mortgage credit "much more expensive and less available to low- and moderate-income people." Rep. Melvin Watt, D-N.C., indicated he would consider changes to the bankruptcy code in putting together a predatory-lending bill.

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