Bankruptcy Changes, Foreclosue Crisis
By Kurt O'Keefe, Attorney at Law on Aug 20, 2008 in General Bankruptcy Information
The New York Times joins the chorus of bankruptcy attorneys on our blogs in calling for Chapter 13 reform to give relief to homeowners being foreclosed.
Chip Parker, among others, has stated the many virtues of this proposed bankruptcy law reform.
Under current law, consumers cannot modify, or change the terms of, the mortgage secured by their residence.
Under changes supported by NACBA, National Association of Consumer Bankruptcy Attorneys, among others, in Chapter 13 repayment plan bankruptcies, the court would be able to lower the balance owed on a mortgage to the value of the house, and change it from an Adjustable Rate Mortgage to a fixed rate.
Bankruptcy courts already hold hearings on the value of property, and on reasonable interest rates. Everything is in place, in terms of courts, rules, experienced attorneys, to make this adjustment.
Benefits? Let’s see, stops foreclosure, keeping more homes off the already depressed real estate market, lowering supply helps demand.
Families are not uprooted, forced to move.
Cost to the mortgage companies? Well, if the consumer cannot make the payments, the case will be dismissed and they will be back to their foreclosure option.
Or, if the payments are made, they received what the house is worth, which is all they would get in a foreclosure sale anyway. And, they save the time and cost of foreclosure, over seven months in Michigan, and the risk of damage or vandalism in a vacant house, like the pipes freezing over the winter.
Yet the mortgage companies adamantly oppose this reform. Why?
Hey, they have paid lobbyists to work on more government bailouts. The government has already handed out tens of billions to cover Bear-Stearns and other big fellas.
Which option do you think is better? The zero cost, to the taxpayer, of Chapter 13 bankruptcy reform, or tens of billions of more taxpayer dollars to save the boys who should have known better?
It is an election year, let the politicians know where you stand.
If you liked that post, then try these...
What is a Due-on-Sale Clause? by Pamela Stewart, Attorney at Law
Pre-Bankruptcy Checks and Property of the Estate in Florida by Carmen Dellutri, Attorney at Law
"And Now The End Is Near..." The Trustee's Statement Of Intentions At The End Of The Meeting Of Creditors by Kevin Gipson, New Orleans Bankruptcy Attorney
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