Cramdowns might raise borrowing costs

A cure worse than the disease?

Legislation that would force lenders to restructure many loans through means including "cram downs" by bankruptcy judges could raise the cost of borrowing and make loans harder to obtain, opponents say.

Sen. Richard Durbin’s Homeowner Assistance and Taxpayer Protection Act is aimed at forcing lenders and loan servicers to modify hundreds of thousands of mortgages they might otherwise foreclose on.