U.S. Rep. Melissa Bean isn't the only lawmaker who quietly slipped an amendment into the financial reform package that's up for debate in the U.S. House this week. It appears that Sen. Dick Durbin's judicial mortgage modification proposal reemerged as well. Indeed, Rep. John Conyers (D-MI) introduced an amendment (PDF) Wednesday that would give bankruptcy judges more power to alter mortgage terms for struggling homeowners, even over lenders' objections. Bloomberg has the details:

The proposal by Conyers, a Michigan Democrat, would require borrowers to seek a loan modification beforehand, giving judges the discretion to decide whether a borrower was offered a “qualified” plan that would bar them from changing the mortgage terms in bankruptcy.

A qualified modification must meet standards set out by the Obama administration’s Making Home Affordable Program this year. The program calls for lenders to voluntarily reduce a borrower’s monthly payment to as little as 31 percent of gross income by first lowering the interest rate on the mortgage, then lengthening repayment terms and then cutting the outstanding loan balance if necessary.

The amendment mirrors Durbin's initial legislation, which passed the House last March only to be defeated in the Senate by 15 votes. Last week, Durbin offered the Huffington Post's Sam Stein evidence that suggests the measure wasn't killed on its merits alone. Durbin's hunch is that some banking lobbyists -- who he famously said "own" Congress -- scared off the banks who were negotiating with him on the measure by threatening to withdraw future GOP support on regulatory reforms. Here is an excerpt from an email obtained by Durbin (and passed along to Stein) and sent by Tanya Wheeless, president & CEO of Arizona Bankers Association, to a group of banking industry friends:

I have contacted the market presidents for each of the three banks (Chase, Wells and Bank of America) and explained that in my humble opinion it's a big mistake to cut a deal with Durbin and alienate our (in Arizona) Senator [Jon Kyl]. I also told them that I thought this would drive a wedge in our industry. Kyl has pointedly told them not to make a deal with Durbin and then come looking to Republicans when they need help on something like regulatory restructuring or systemic risk regulation.

In light of this threat, it's fitting that both mortgage modification and financial regulation have converged in the House this week. Big banks aren't letting up a bit, working hard to thwart both proposals. Just yesterday, mortgage industry leaders testified on Capitol Hill that consumers, not lenders, are to blame for the dismal voluntary modification figures (the Treasury Department will release the latest numbers today). Illinois housing advocates are pushing back against the mortgage companies' diversionary tactics, namely their testimony suggesting that had more consumers taken the time to file paperwork and meet deadlines, the modification programs would be more successful. Chicago-based Action Now called the industry's response "desperate" and "shameful" in a statement released yesterday morning:

Ask homeowners and you will find countless stories of mortgage companies continuing to lose paperwork after borrowers have sent in all required documents several times. Mortgage companies are using the “inadequate paperwork” claim as an excuse to refuse borrowers permanent loan modifications AND as a way to skirt the blame for not complying with the HAMP program. Borrowers are doing everything they can to keep their homes, but mortgage servicers are trying to derail their progress every step of the way [...]

We need legislation that forces mortgage companies to do their part in pulling the United States out of this devastating recession because the government asking them to do it voluntarily is getting us nowhere.

Stay tuned. We'll be keeping close tabs on the bill.