Reasonable Response to Sub-Prime Crisis
By Kurt O'Keefe, Attorney at Law on Nov 26, 2007 in Benefits of Bankruptcy, Chapter 13 Bankruptcy, Featured, Michigan
Another newspaper endorses the proposed changes to Chapter 13 bankruptcy law.
The sub-prime crisis continues to build, as anticipated by many posts on this blog. As hundreds of thousands of adjustable rate mortgages adjust up to monthly payments the homeowner cannot afford, declining values having foreclosed the option of re-financing into a new ARM, home foreclosure rates are doubling and tripling across the country.
The changes would allow consumers to treat loans secured by their principal residence, that is, home mortgage, to be modified like other loans in bankruptcy, that is, interest rate changed, the secured loan amount reduced to the value of the collateral, that is, your house.
The other points in this editorial and other articles in this edition of the Atlanta paper are echoed throughout the country.
Skyrocketing foreclosure rates, leading to thousands of homes being dumped on the market, lowering the value of all homes in the area, making it harder to re-finance out of the teaser ARM rates which are expiring at an accelerated pace.
A perfect storm.
No doubt the pressure on the Fed to lower interest rates will be irresistible.
But that will not help the homeowner stuck in the cycle.
Making this change in the bankruptcy laws would.
You must be logged in to post a comment.