The Senate voted 51-45 (12 Democrats voted with Republicans) against passage of the amendment sponsored by Senators Durbin (IL) and Schumer (NY). As you may recall, this was part of the "mortgage bailout" plan announced several weeks ago. The cramdown would have allowed bankruptcy judges to rewrite mortgage contracts, reducing the principal that would need to be repaid (I wish I could get one of those!). Opponents argue that this would increase the cost of doing business for lenders (banks), who would pass this along by increasing mortgage interest rates in the future.
Over the past few weeks, Senator Durbin has attempted various legislative maneavers to get this passed. For example, he tried to make it part of a bill that was going to increase funding for FDIC insurance. He assumed that there was no way the Senate would not increase funding. However, he was unable to do that.
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