“i heard about just term called “cram down” in real estate.”?

Rico: “i heard about just term called “cram down” in real estate.”?
i’m from CA does this exist? sound a lot better than getting a hoping from a loan modification.

Answers and Views:

Answer by quizzard123
cram down is a legal term for a court ordering a reduction in the principal balance when a debtor goes bankrupt. In essence, the court can order that any principal in excess of the appraised value is lost in the bankruptcy.

So unless you’re upside down (the loan is more than the value of the home) AND in bankruptcy, it doesn’t apply to you.

It’s also very rarely done even if the conditions warrant it. Generally, it’s done if the home value dropped significantly because of extraordinary conditions.

Answer by Ed Atun
The bill in Congress to allow Bankruptcy Judges to “cram down” home mortgages failed to pass. Judges do not have the legal right to make a lender accept less than the loan amount as a condition of the bankruptcy.