
We’re answering this question a lot lately more than likely because of the headlines Citigroup — among the largest financial institutions on the planet — has recently made with its support of the measure.
So let’s touch on it real quick just to ensure that everyone is familiar with the term.
A “cram down” is a forced loan modification that is determined by a judge (not a lender) in bankruptcy court. It essentially gives a judge the power and authority to adjust a home loan with the intent of making it more affordable for the cash-strapped homeowner.
Typically, lenders such as Citigroup don’t support “cram downs” — they would rather negotiate and modify loans on their own terms … or not at all.
But with the shaky state of the economy — and more and more troubled mortgage borrowers falling deeper into debt — it appears that Citigroup is willing to go along with a possible major plan to help alleviate the foreclosure situation.
Is it an effective solution?




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