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Last year I wrote a post about Cram-downs, comparing the pros and cons from a consumer perspective.  And there are both… depending on the specific perspective one wished to use.

• It can help people that are upside-down if judges can force lenders to write off a portion of the principle balance.
• For those that aren’t upside-down, it would result in increased borrowing costs as lenders take on more risk.

If you check out the original post, you can see some examples of exactly HOW MUCH the increased costs could be for consumers.

Personally, I think that the bad points out-weigh the good.  In addition to the increased interest rates, commercial borrowers (where Cram-downs are allowed) generally have to provide much higher down payments.  This lowers the risk for lenders.