Loan Modification

Mortgage Modification in Bankruptcy Not Dead Yet

By Doug Jacobs

On December 9th the full House of Representatives will consider H.R.4173, the Wall Street Reform and Consumer Protection Act.  A bipartisan group of Representatives will offer an amendment to that bill to allow bankruptcy judges to modify the loans of homeowners in a Chapter 13 Bankruptcy.

Much like the bill, H.R. 1106, that went down to defeat last spring, this new amendment, if passed, will mean many homeowners will be able to keep their homes by filing a Chapter 13 Bankruptcy.  The Judge will be able to change the terms of the loans on the house by adjusting the interest rate, the length of the loan, and even the principal owed.

The ?voluntary? mortgage modification programs have been a dismal failure. What is needed is this unbiased look at the situation with the teeth to force lenders to do something.  A US Bankruptcy judge is trained to be unbiased, to look at the situation from both the homeowners and the lender?s standpoint and reach a workable solution.

Although, simply bringing an amendment to an existing bill is a long way from passage, it does give hope to homeowners fighting to save their homes.

Related posts:

1. Chapter 13 Bankruptcy Mortgage Modification Win-Win
2. Congress to Take Up Mortgage Modification in Bankruptcy This Week
3. House Judiciary Amends Bankruptcy Act to Include ?Clawback?

Full post as published by Mortgage Law Network on December 07, 2009 (boomark / email).