Congress Votes Against Consumers Modifying Home Mortgages In Bankruptcy

30 Apr Congress Votes Against Consumers Modifying Home Mortgages In Bankruptcy

Today, the Senate voted on Senate Bill 61, the bill which would allow homeowners, consumers, everyday Americans, to modify their residential mortgages in bankruptcy.   This bill had been debated for over 8 months, mostly during the presidential elections.  The Bill did not pass.

Other types of mortgages can be modified in bankruptcy; other types of loans can be modified.   If the debtor is a investor with business properties–the mortgage can be modified.  But the everyday homeowner who is now facing adjustable rate mortgage rate hikes and decreasing property values–that everyday homeowner is stuck with paying the mortgage as is, or giving up the residence.

The mortgage companies put on a great fight; most of the propaganda against the bill warned that passage of this bill would increase the interest rates for “the rest of us”–the ones who pay their bills on time.   When reports came in that the Bill might actually pass, the mortgage companies joined forces with the credit  unions and community banks, to pressure Washington into voting against the bill.

What I find most remarkable was that during the election campaign, lots of promises of support were made by Mr. Obama.  This week as negotiations raged through the District of Columbia, while the Mortgage Banker’s Association had press bits to the left, right and center of every possible opportunity to get their message out….the White House was silent. 

Wall Street gets assistance; your neighbor gets a kick to the curb.

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I'm a consumer protection lawyer in Oregon, working with people in Klamath; Lake; Jackson; Josephine; Curry; and Deschutes County. I speak regularly on bankruptcy and consumer protection issues nationwide.

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