Will the cram-down make it into the stimulus or not?

Open Left reports that it won't:

Sen. Dick Durbin, D-Ill., the chief Senate sponsor of the bill, said Obama persuaded him in a White House meeting Friday to remove the bankruptcy proposal from an economic recovery package -- to ensure it doesn't jeopardize the stimulus bill. But Obama pledged his support for the bankruptcy solution, Durbin said.

But the House has not given up on it entirely:

On the mortgage renegotiation side, there is support from members of the banking committee, and from House Speaker Nancy Pelosi. Proposals to do mortgage renegotiation have come from executive branch members, following on the model pursued by Bair over at FDIC. However, no one has taken ownership of this. Sources on the Hill have said that critical to making the amendment happen would be the support of Rep. Brad Miller, and Rep. Barney Frank, even if another member actually offered the amendment, the word was that the Rules Committee would be "no go" without cover.

The cram-down provision is legislation that allows mortgages to be renegotiated in bankruptcy court.  Ian Welsh points out the benefits of this provision:

Without the ability to rewrite mortgages what happens isn't "people pay their debts", it's "people go bankrupt anyway, and lose their houses which then go on the market.  Once on the market they depress house prices even further."  Since falling home prices are at the heart of the financial crisis, this makes banks even more sick requiring more money. It puts even more homeowners "underwater", meaning they owe more on the houses than they're worth.  It puts more pressure on States as people without homes need help.  And so on.

Allowing judges to rewrite the terms of mortgages is in the interest of most owners of mortgages and most homeowners. It is in the interests of muncipalities and states, who do not want to see entire neighbourhoods depopulated.  It is in the interest of America.  Yes, some people who bought parts of mortgages on the secondary market may lose money, but in most cases they would have lost the money anyway.

I hung out with a laid-off attorney friend during the inauguration - someone who used to work in mortgage-backed securities.  He believes that the economic crisis is more of a "credit" crisis than a "housing" crisis, but one thing he pointed out repeatedly over the weekend: it is far easier to buy and own a home in the U.S. than in just about any other developed country.   Too bad it's not so easy to keep it these days.