Helping Families Save Their Homes in Bankruptcy – Mortgage Loan Modifications For Homeowners in Chapter 13

18 Mar Helping Families Save Their Homes in Bankruptcy – Mortgage Loan Modifications For Homeowners in Chapter 13

Right now, real estate loans can be modified by judges in chapter 13. Bankruptcy lawyers can help you can lower the mortgage to the current – much lower – value of the property and pay the rest over a period of five years. Didn’t you think that this is what all the fuss is about in Congress?

Here’s the catch. The loan on your vacation house can be modified. The loan on your investment property can be modified – but not the mortgage loan on your very own residence.

Congress would change this. S 61 would apply to mortgages in homes where you live where the mortgage is for more than the value of your house. You could reduce the mortgage to that amount, stretch payments out as long as 40 years and reduce interest to a very attractive level – far lower than most subprime loans. Prepayment fees would be out too.

Lots of banks hate this idea. You need to care about this. Banks have support of enough Senators to block this legislation if a compromise is not reached. So it is important Citibank has now signed on to this legislation as long as it applies only to existing loans and with some other changes which ought not to be terribly objectionable.

Write your Congressman and Senators. Tell them that you support and S61 – Tell them that American Homeowners deserve the same treatment that any other property owner has in America for any other type of real estate.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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