LOUISVILLE, Ky. (3/9/09)--Kentucky Credit Union League President Wendell Lyons described credit unions' objections to cramdown provisions in legislation and told listeners facing foreclosures to communicate with their lenders during two segments of the "Tony Cruise Show" on WHAS 84 in Louisville last week. The five-minute shows aired Wednesday and Thursday. In segment one, Lyons noted that devaluing the house and requiring lenders to write down the loss will lead to less homeownership in the long term, as an unintended consequence of the provision. Lenders will end up increasing rates and fees, and raising credit standards. "The people who qualify may not be the people the administration is trying to help." Credit unions have no problem applying the changes to high-cost mortgages, predatory loans, loans with negative amortization or loans that a bankruptcy judge finds were obtained under fraudulent or abusive underwriting standards. He also said that homeowners taking advantage of cramdowns should not be allowed to remortgage the property, and if the home is sold at a profit, the lender should be repaid from the balance it was required to write down. Segment two discussed the effects on second mortgages and home equity lines of credit. These could become unstable, too, Lyons said. He noted that credit unions and banks in Kentucky have lended more responsibly. When asked if the Clinton administration's policies of providing more housing opportunities pressured lenders into giving unqualified borrowers homes, Lyons noted that credit unions haven't seen such pressure. "Credit unions have done a very responsible job of lending throughout the last 75 years," he said. To those who may have lost jobs and are facing possible foreclosures Lyons advised communicating with the lenders. "Lenders don't want to foreclose on property," he said, noting that foreclosures are expensive. "Get in touch with your mortgage lender and work out a solution." He noted lenders can offer a repayment plan, extend the term of a loan, and make loan modifications of their own to avoid bankruptcy. To listen, use the link to the station's website and click on the "mortgage cramdown" and "facing foreclosure"links.