WASHINGTON (2/19/09)--The Credit Union National Association (CUNA) is reviewing President Barack Obama’s Homeowner Affordability and Stability plan, which was released Wednesday and includes a provision for mortgage cramdowns. Under the president’s proposed plan, bankruptcy courts would be allowed to modify terms of existing mortgages so borrowers can continue making payments--commonly referred to as a mortgage cramdown. Homeowners also would be required to ask their loan servicers for a modification and certify that they have complied with reasonable requests from the servicer to provide essential information. The provision would apply only to existing mortgages under Fannie Mae and Freddie Mac conforming loan limits. CUNA is opposed to mortgage cramdowns and is working with policymakers on a more targeted approach to cramdown proposals and the housing crisis. If cramdown legislation is enacted, it must be specifically limited to loans that are subprime, have negative amortization, are fraudulent or abusive, and have large interest rate resets, according to CUNA. CUNA has said mortgage cramdowns could encourage borrowers’ gaming of the mortgage lending system by allowing a dissatisfied borrower to stop payments on a home and possibly be able to keep the home (News Now Feb. 10).