Legislation that would allow judges to modify the mortgage loans of troubled borrowers who file for Chapter 13 bankruptcy protection would increase the interest rate on loans with small down payments by up to 2 percent. That's according to testimony by the Mortgage Bankers Association at a hearing on HR 3609, the Emergency Home Ownership and Mortgage Equity Protection Act of 2007. HR 3609 has been referred to the House Judiciary Committee, where opponents of the bill hope it will stay, rather than being sent on for a full House vote Mark Zandi, chief economist for Moody's Economy.com, testified in support of the bill, saying lenders have been slow to modify the loan terms of troubled borrowers. Giving bankruptcy judges such powers would "significantly reduce the number of foreclo...