Citi Will Support Bill to Rework Bad Loans

Updated from Thursday, Jan. 8

Senate Democrats late Thursday announced a deal with Citigroup (C Quote) to support a bill that could alleviate housing foreclosures for consumers facing bankruptcy.

The legislation, announced at a Washington, D.C. press conference hosted by Sen. Richard Durbin (D., Ill.), Sen. Christopher Dodd (D., Conn.) and Sen. Charles Schumer (D., N.Y.), would allow bankruptcy judges to alter the terms of mortgages owed by consumers filing for bankruptcy.

Senators hope Citi's support for the legislation, which mortgage lenders fiercely opposed last year leading up to the passage of the $700 billion financial bailout package Congress passed in October, will help win over other financial institutions, Durbin said. ...