In a mixed set of amendments, the House of Representatives reversed an earlier position by defeating the mortgage “cramdown” amendment to the financial reform bill, while also defeating an amendment that would have eliminated the Consumer Financial Protection Agency.

Cramdown passed the House back in March, but this time it lost by a count of 241-188. This simple fix to bankruptcy law would have allowed judges to modify the terms of a loan for primary residences, the same way that they can for vacation homes, farms, boats or cars. The rejection of cramdown is a big win for the banks and a loss for homeowners facing foreclosure, at a time when foreclosure filings are at a record high and no program from Congress or the White House has yet solved the problem of increasing defaults.

The amendment to kill the CFPA, pushed by Blue Dog Walt Minnick, failed by a count of 223-208. That’s a loss for the Chamber of Commerce, which scored the amendment and lobbied heavily for it. The CFPA would have regulatory power over various types of consumer financial products.

These are among the final controversial amendments scheduled for today. Passage of overall financial reform is expected in the House later on.

David Dayen

David Dayen

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