One of the sticking points of a mortgage relief bill in Congress has been that Republicans don't approve of mortgage loan modifications in bankruptcy. Allowing judges to modify mortgage loan terms — including principal in what are known as cram downs — would only add to the mortgage lender related losses in this economy, they say.

The Democrats, though, have offered a compromise. Bankruptcy mortgage loan modifications can only be implemented as a last resort. Home owners seeking help with loan modification from a bankruptcy court would be required to prove that they made an attempt to reach an agreement with their mortgage lender first, and that the lender didn't offer a "reasonable" deal.

This is one of the sticks be used, in addition to the carrots offered by President Barack Obama's foreclosure prevention plan. Mortgage lenders have been slow to offer loan modification — even in cases where the borrower would be able to pay with the new terms. The prospect of having mortgage loan modifications forced on lenders, along with incentives offered by the Obama, are aimed at getting mortgage lenders to do more than merely take taxpayer bailout money — they're expected to help the taxpayer in turn.

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