There is a new bill floating around in Congress which is gathering quite a bit of attention in the Bankruptcy world. The bill, if passed and signed into law in its present form, would allow Bankruptcy Courts to alter mortgages between homeowners and predatory lenders. Under the current bankruptcy law, bankruptcy attorneys and courts are prohibited from modifying mortgages secured by the real estate. According to estimates, if this bill becomes law, over 150,000 homes in Florida could be saved from foreclosure.
As anyone who lives in Florida knows, we are in foreclosure hell. It seems each new headline increases the number of foreclosures in our area. I live in Fort Myers, on the west coast of Florida, and we have two zip codes with some of the highest foreclosure rates in the nation. This bill would save many homes in this area alone because it would allow a bankruptcy attorney to change the mortgage terms. By providing bankruptcy attorneys with this ammunition, it would level the playing field between the mortgage servicing companies and homeowners. A playing field which has never been level in the past.
Obviously, this bill will be strongly opposed by the mortgage industry, wall street, investors, and rating companies. Part of the problem with the mortgage industry was the way these mortgages were packaged and sold in the past. Everyone of these individuals and corporations in the mortgage industry food chain made quite a bit of money in the past, but none of them has offered any solutions on how to fix this disaster. The bankruptcy attorneys have offered solutions which usually fall on deaf ears because we don’t have the money to lobby congressmen like the credit industry does.
I urge anyone reading this blog to contact your Senator and Representative to support H.R. 3609