DaytonDailyNews.com

WASHINGTON — U.S. Rep. Mike Turner is the lone Republican signed on to a controversial piece of legislation that would allow judges to reduce mortgage debt for borrowers who file for bankruptcy.

The so-called "cramdown" legislation, a key piece in President Barack Obama's plan to alleviate the foreclosure crisis, was set for a vote last week, but stalled because of objections from some conservative Democrats. It'll likely face a vote early this week, according to House Democratic leadership.

Turner, R-Centerville, has supported similar provisions in the past, and last year supported one along with U.S. Rep. Steve Chabot, R-Cincinnati, who lost his 2008 re-election bid. This year he's the lone Republican cosponsor of the bill.

And how. This week, House Minority Leader John Boehner, R-West Chester, called the proposal "just the worst idea in the world."

"At a time when we need more liquidity in the market and more certainty for lenders, this cramdown legislation just flies in the face of it and especially the version moving through the House which allows a bankruptcy judge to do anything to a contract — change the amount, change the payment change the interest rate — it's very bad policy."

Industry groups such as the Mortgage Bankers Association also have lined up against the bill.

But Jim McCarthy, of the Miami Valley Fair Housing Center in Dayton, said many of the houses in the Dayton region that would be affected by the bill were appraised at a higher value than the property was worth. "There's no way to make those loans workable unless someone comes in with the authority to say, 'either negotiate a deal or I'll restructure the mortgage to keep people in the house,'" he said.

He said Boehner was "dead wrong" in opposing the bill.

"In the long run, it's in the best interest of our community," he said.

Turner, meanwhile, said the measure would keep some endangered neighborhoods in his district from descending into blight. He said some 10,000 housing units in the Dayton area have been abandoned in the region because of the current economic crisis.

In January, Ohio ranked 10th of all states in foreclosures. Montgomery County ranked 8th of all Ohio counties for foreclosure in January, according to RealtyTrac, an online marketplace for foreclosure properties.

"Anything we can do to keep someone in their own home and help sustain their neighborhoods helps," Turner said.

He argued that shrinking mortgages would have less of an impact for banks than the abandonment of houses would.

"It requires that the loan be rewritten for an amount higher than the bank would receive if the property went through foreclosure," he said. "A bank isn't losing any more than it would lose as a result of a default and a foreclosure."

Turner said the bill, if passed, would only apply to mortgages entered into before the legislation was enacted and does not apply to future loans.

"People cannot today knowingly walk in and enter a housing transaction and think, 'I'll file bankruptcy and keep the house,'" he said. "Really, this only is a recognition of the housing crisis."