"We welcome the support of Citigroup, one of the nation's largest mortgage lenders, for responsible and urgently needed legislation that would help stem America's grave home foreclosure crisis by allowing judges to modify mortgages in bankruptcy. It is painfully clear that the continuing, and indeed worsening, foreclosure crisis is perhaps the single largest impediment to economic recovery," they said in a statement.

Modifying the terms of mortgages does not always mean an end to trouble for consumers. Almost 37% of consumers whose mortgages were modified during the first quarter of last year defaulted on payments within six months, according to a study by the Office of Thrift Supervision.

Senate Majority Whip Dick Durbin is the main sponsor of the measure in that chamber, though it also has the support of other key Democrats including Senate Banking Committee Chairman Christopher Dodd (D-Ct.). House Judiciary Committee Chairman John Conyers (D-Mich.) is the key backer in that chamber.