Congress is readying legislation designed to step up government efforts to stem the rise of home foreclosures. But a fight looms over a provision sought by President Obama that would give bankruptcy judges new authority to reduce mortgage debts.

The measure would let judges set new repayment terms for mortgage holders in bankruptcy court, and is a key part of a broader plan unveiled by Obama last week to combat foreclosures. Supporters have long argued that this is essential to broader efforts to renegotiate millions of troubled mortgages that helped trigger the country's current economic crisis.

Many in the banking industry oppose the initiative, saying such a change would add uncertainty to the housing market, encouraging homeowners to stop making mortgage payments and file for bankruptcy rather than seek help from their mortgage servicers.

Wall Street Journal