September 16, 2007
One area where Atrios has been consistently prescient is the emerging housing bubble, and what should be done about it. Here, he links to a dialogue about a potential legislative fix to the 1978 bankruptcy law, which was drafted long before adjustable rate mortgages became de rigueur among homeowners, that's well worth reading. My understanding is that it concerns the power of the bankruptcy court to modify loans in the Chapter 13 context, but I suppose Congress could also extend the practice to Chapter 7 cases as well, provided the debtor is current on the mortgage at the time of filing. The 2005 BARF act made the practice more difficult as well, so that law will need to be revisited as well if Congress really hopes to make a dent in the problem.