Judges should have say in mortgage modifications

Perspective: Bankers' big win is borrowers' major loss

LIVE NOW: Inman Connect San Francisco
Tune-in now to catch the livestream. Don't miss this chance to see real estate leaders tackle the industry's top problems.

The Mortgage Bankers Association recently fought off federal legislation that would have allowed bankruptcy judges to modify residential mortgages. The MBA’s victory was a huge success for lenders, but an unfortunate loss for homeowners who have declared bankruptcy.

Lenders had good reason to dislike the proposal, which would have shifted some of the power over mortgages from lenders’ loss-mitigation departments to bankruptcy judges, who might have imposed modifications that the lenders wouldn’t have liked.