From the Wall Street Journal:

In key concessions to the banking industry, Mr. Conyers agreed to alter the legislation to allow court-ordered modifications only for existing mortgages and to require that borrowers contact their lender at least 15 days before filing bankruptcy. Citigroup Inc. had demanded the changes in exchange for throwing its weight behind the bill, a move that angered the rest of the industry.

In another change, the legislation will now require recipients of cram downs who resell their home within five years to share the proceeds with their lender.

The panel also added language dissuading bankruptcy judges from shrinking the principal amounts of mortgages guaranteed by the Federal Housing Administration, the Veterans Administration or the Department of Agriculture. Under current law, the government cannot guarantee or insure amounts that have been crammed down on such loans.

The financial blog Calculated Risk cites a passage from the late-contributor Tanta to argue that limiting the bankruptcy avenue to existing loans might mitigate the law’s effectiveness: From Tanta’s post:

I’m in favor of it [cramdown] because I think it will be part of a range of regulatory and legal changes that will help prevent future borrowers from getting into a lot of jams, which is to say that it will … actually help “stabilize” the residential mortgage market in the long term. Any industry that wants special treatment under the law because of the socially vital nature of its services needs to offer socially viable services, and since the industry has displayed no ability or willingness to quit partying on its own, then treat it like any other partier under BK law.

Even after taking hundreds of billions of taxpayer dollars, it seems the banks still hold considerable sway over Congress.

From Dodd’s opening statement during a panel hearing on Detroit:

In my view, if we’re going to insist on reforms by the auto industry as a condition of receiving federal funding, we ought to do the same for the financial companies. For that reason, I will do all I can to insist that any auto company bill also place tough conditions on any loans to financial firms, including provisions that require tax dollars to be used for responsible practices like lending that requires lenders to get much more aggressive about attacking the foreclosure crisis that is still at the root cause of the larger financial crisis and that prohibits executives from paying themselves obscene sums while they are essentially receiving a welfare check from the American taxpayer.

Half of the $700 billion Wall Street bailout has already been allocated for Treasury to spend wherever it pleases. But in order to tap the second $350 billion, the administration must first get approval from Congress — creating a good deal of leverage for Congress to make some demands. Even Republicans are starting to question the effectiveness and integrity of the White House program as the money continues going out, but the banks still won’t lend.

As Bloomberg points out this morning, there’s a new twist on this saga: Sheila Bair, head of the FDIC, has long pushed for a program tapping bailout funds to help homeowners directly, putting her at odds with the officials responsible for managing the bailout spending. That, of course, includes Tim Geithner, the head of New York’s Federal Reserve Bank who President-elect Obama recently named to be his Treasury secretary next year.

If Bloomberg is right, and Geithner really wants to run her out of office because she “isn’t a team player,” the immediate question is: What will be the response of Dodd and other Democrats on Capitol Hill who support Bair in her help-for-homeowners’ stance — including House Financial Services Committee Chairman Barney Frank (D-Mass.)?

Could this be the start of the first rift between Democratic leaders in Congress and the incoming Obama administration? Or will Obama, who has supported greater help for those facing foreclosure, rein in his newly appointed financial guru?

Only time will tell.