House likely to delay mortgage aid vote: sources

WASHINGTON (Reuters) - Democratic leaders of the U.S. House of Representatives are likely to postpone a planned Thursday vote on a controversial measure that would let bankruptcy judges reduce mortgage debt for troubled borrowers, said sources familiar with the legislation.

House Speaker Nancy Pelosi said this week she hoped to bring mortgage bankruptcy legislation known as the "cramdown" bill to the House floor on Thursday.

The industry and congressional sources said a vote was likely to be postponed while Democratic leaders hash out details.

While Democrats hold a strong majority in the House, a faction of fiscal conservatives has expressed misgivings about the plan, saying it could distort the price of mortgage investments on Wall Street.

Officials at the Federal Reserve and Federal Housing Finance Agency fret that giving bankruptcy judges sweeping power to modify home loans could discourage fresh investment in the sector.

At a Democratic party caucus Thursday morning, some of the fiscal conservatives in the Blue Dog and New Democrat factions expressed misgivings about the plan as written, the sources said.

(Reporting by Patrick Rucker; Editing by James Dalgleish)