Mortgage Modifications, Instead of Chapter 13?
By Kurt O'Keefe, Attorney at Law on Oct 23, 2007 in Chapter 13 Bankruptcy, Consumer Protection, Foreclosure Issues, General Bankruptcy Information, Michigan, Mortgages
There is pending legislation to change Chapter 13 to allow consumers to re-write their mortgages to lower the mortgage value to the value of the home, and change the interest rate.
If other mortgage companies follow Countrywide and offer to change the terms of the ARMs whose adjustments are adding to the tidal wave of foreclosures, as people are priced out of their homes, Chapter 13 filings will not go up as much. Never thought I would write this, but, I applaud Countrywide for this about face.
Though its boss still made out OK.
The article linked to above says the program could help up to 82,000 borrowers.
That seems like a big number, but Countrywide alone has 500,000 mortgages that were behind as of last month.
So, things may be starting to break. A Chapter 13 client of mine was offered a great loan modification, knocking $20,000 off the principal balance, changing an ARM to an 8% fixed rate, right AFTER we filed his Chapter 13 case.
Another client received a similar offer out of the blue, a month AFTER the foreclosure sale.
Both of these clients had tried for months to work with their mortgage company to no avail.
So, Countrywide, better late than never. Much more change along the same lines is needed.
If you liked that post, then try these...
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