The defeated measure would have allowed bankruptcy court judges to modify the mortgage terms of a bankruptcy filer’s primary residence with the possibility of having the filer’s interest rate or principal balance lowered in a process known as a “cramdown.” Currently bankruptcy judges can only modify mortgages for second homes or investment properties.

While opponents of the bill, including the nation’s biggest banks and Republicans in the Senate, argue that the bankruptcy modification provision would increase lending costs for future homebuyers and, therefore, destabilize the housing market even further, supporters of the cramdown measure contend that it would help more than 1.7 million struggling homeowners to stay in their homes.

In spite of the defeat, the measure’s sponsor, Senator Dick Durbin, D–Ill., is determined to keep pushing for cramdown legislation that he says is needed. In the time since he’s been campaigning for bankruptcy code reform, Durbin says home foreclosures have jumped from 2 million to 8 million.

“I’ll be back. I’m not going to quit on this,” Durbin said. “At some point, the Senators in this chamber will decide the bankers shouldn’t write the agenda for the United States Senate.”

The measure is part of a larger Senate housing bill that includes a provision to revamp the Hope for Homeowners program and a proposal to temporarily increase the deposits guaranteed by the Federal Deposit Insurance Corporation, and which still has to be reconciled with the House’s version of the bill. House Democrats will most likely remove the cramdown measure from the bill to help get it passed by both houses of Congress.

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Experian, one of the three major credit-rating bureaus, announced in January that it would be cutting ties this month with Fair Isaac, the creator of the three-digit credit score used by most lenders to determine a borrower’s credit worthiness.

While the credit bureau has not indicated why it chose to make the drastic move, some experts have speculated that the break between Experian and Fair Isaac can be attributed to a “non-mutually beneficial relationship” that has existed between the two companies for some years. The souring relationship was exasperated by a 2006 lawsuit brought by Fair Isaac against Experian and the two other major credit bureaus, TransUnion and Equifax, Bloomberg reports (“Experian Will No Longer Offer FICO Score Access for Consumers,” Feb. 5, 2009).

Fair Isaac sued the three credit bureaus, along with VantageScore Solutions, a company created by the three bureaus to develop their own credit-scoring formula, for allegedly engaging in competitive practices that hurt the FICO brand. Fair Isaac later dropped Equifax from the suit, but litigation is still pending against the other three companies.

“The move isn’t unexpected, given the contentious nature of the lawsuit and the millions of dollars of credit score revenue that Fair Isaac recognizes each quarter from [its] partnership with Experian,” said John Ulzheimer, president for consumer education for Credit.com. “Experian has made a significant monetary investment in the market for consumer credit reports and scores. Fair Isaac is a competitor of theirs, so this eliminates one component of the competition.”

Experian will make available its proprietary three-digit credit scores to consumers on its website and consumers will still be able to get free Experian credit reports once a year at annualcreditreport.com. Lenders and banks will still be able to access FICO credit scores based on Experian’s data and make credit decisions based on these scores.

But, ultimately, consumers stand to lose the most, says Craig Watts, public relations director for Fair Isaac, since myFICO.com is the only source for consumers to view their FICO credit scores with Experian, TransUnion, and Equifax. “When one of those scores goes dark” Watts said, “consumers have lost a significant part of their ability to understand and manage their credit ratings.”

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To protect yourself from being added to this list of displaced tenants, the Associated Press recommends three steps for checking up on your landlord’s financial stability:

1. Search county courthouse records. Sift through the district court or county recorder’s office records in person or online to see if they show that county has filed any foreclosure actions against your landlord. You can also check to see if there are any records indicating that your landlord has ever filed for personal bankruptcy.

2. Call the Better Business Bureau. Ask if there are any complaints on file against your landlord. Maybe previous tenants left with good reason: your landlord wasn’t financially responsible.

3. Look at your rental property with fresh eyes. Do a walk-through of your residence and look for any signs of neglect. Are there repairs your landlord hasn’t followed through on? A lack of maintenance on the home could be a sign that your landlord can’t afford the upkeep of the house or doesn’t want to spend the money to fix up a property that’s about to go into foreclosure.

If you discover that your landlord is headed toward foreclosure, check out our tips on what you can do to keep a roof over your head and soften the blow.

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If you were the recipient of a couple of these duds, here are four ways to use your unwanted gift cards to your advantage:

1. Buy something for someone else. Get creative and find ways to use your card for another purpose. Know someone who is approaching graduation? Give them a head start on their professional wardrobe. Attending a baby shower? Get diapers, toys, or baby bottles.

2. Give them to charity. Donate your gift cards to a worthy cause and get a tax write-off without spending a dime. Chances are a nonprofit will be able to use the cards for their own purposes or get them in the hands of a deserving family.

3. Sell them or trade them online. Get cash for your cards or swap them for gift cards to other retailers on the websites Plastic Jungle and Swapagift.com, which also gives you the option of applying the balance on your gift card toward a bill payment.

4. Give them away as prizes. Turn your unwanted gift cards into door prizes for your New Year’s Eve party or give them away as game prizes the next time you host Poker or Bunko night.

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Borrowers with a high credit score — 740 and higher — who have at least 20 percent equity in their home could see rates as low as 5.13 percent on a 30-year fixed-rate conforming mortgage, a mortgage that is not subprime, says Lou Barnes, a mortgage banker in Boulder, Colo., and they wouldn’t be charged points or an origination fee (“Mortgage Rate Hits a 4-Year Low at 5.47%,” The Wall Street Journal, Dec. 12, 2008).

Rates are so low that they may even tempt borrowers with credit scores between 660 and 700 to refinance, says Chris Freemott, a mortgage broker in Naperville, Ill., but, he warns, these borrowers could wind up paying as much as half a percentage point more than borrowers with higher credit scores. These less creditworthy borrowers would also likely get hit with extra charges levied by Fannie Mae and Freddie Mac, two of the nation’s largest mortgage holders.

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