Why are we protecting home lenders?

The more I research the provision of §1321(b)(2) in the Bankruptcy code that prohibits modification of mortgages on primary homes, the more I think it should be changed.  The justification that is keeps the supply of money for home loans available seems to me to be part of the problem.  Lenders have no incentive to really know what the value of the homes they are lending on because they are protected.   This little know part of the law played a big part in the housing bubble, but it is getting almost no attention.  If you want to clean up the foreclosure crises in a hurry and prevent another one from coming along, then changing this provision should  be item one.


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