we have this now on investment property.
this is not new.
2nd mortages are being stripped off properties all the time.
that is a red herring.
remember the 2005 bankruptcy reform was to try and head off the housing bubble by fixing the rules to prevent cramdowns. They did not expect people to start walking away and buying the identical less expensive homes across the street.
Also, it’s irrelevant that we have it now with investment property. Congress exempted owner-occupied homes because it recognized that cramdown is undesirable to banks, who will demand a higher interest rate if it’s an option, and it wanted to make home mortgages more affordable. That was not the smartest move, but it’s inappropriate to change it retroactively.