Worsening Foreclosure Crisis: Is It Time to Reconsider Bankruptcy Reform?: Hearing Before the Subcomm. on Administrative Oversight and the Courts of the S. Comm. on the Judiciary, 111th Cong., July 23, 2009 (Statement of Adam J. Levitin, Associate Prof. of Law, Geo. U. L. Center)
The clear finding from my research is that mortgage prices are largely insensitive to bankruptcy modification risk. Permitting bankruptcy modification is unlikely to result in higher mortgage costs or lower mortgage credit availability.
The foreclosure crisis is not about to stop any time soon. Judicially-supervised restructuring of mortgages is the only tool we have left in the box. It's a tool we know can work. It's a tool that can save hundreds of thousands of families their homes and help stabilize communities, housing markets, and the economy. It's time to use it.