WASHINGTON (Reuters) - Financial giant Citigroup Inc has agreed to support a controversial rewrite of U.S. bankruptcy law aimed at helping troubled mortgage borrowers, three Democratic senators said on Thursday.
Senators Richard Durbin of Illinois, Charles Schumer of New York and Christopher Dodd of Connecticut said the legal reform would help "millions of families save their homes."
Citigroup has agreed to support, under certain conditions, a rewrite of bankruptcy law. Under the change, known as "cramdown," bankruptcy courts could alter the terms of mortgages, subject to certain conditions, the senators said.
Citigroup had no immediate comment.
Only mortgages entered into prior to the date of enactment of the bill would be eligible for the treatment, they said.
Homeowners would have to certify that they have tried to contact their lender before filing for bankruptcy, they said.
Only major violations of the "Truth in Lending Act" would invalidate creditor claims on bankruptcy, they said.
(Reporting by Kevin Drawbaugh; Editing by Bernard Orr)
