24 Jul Cramdown On First Mortgages Gets A Second Look By Senate
Several months ago, there was a bill before Congress which, if passed into law, would have allowed Bankruptcy Judges to modify first mortgages on homesteads. However, the bill failed in the Senate. As of now, the Bankruptcy Code does not allow a debtor to cramdown the mortgage on his first mortgage. So, many people are giving back their homes to the creditors when they are told that they are not eligible for a modification of their mortgage.
The reason that the Bill didn’t pass was because the Senate voted against it. The Bill passed in the House of Representatives, but it didn’t build any steam in the Senate. Likewise, the President didn’t get involved and pressure any members of the Senate despite a campaign promise to pass this bill.Yesterday, the Senate Judiciary Subcommittee on Administrative Oversight and the Courts held a hearing where testimony was taken on the issues. Hopefully, the Senate will begin to understand that the Obama plans have failed miserably, and after two years of no-policy, it is time to do something which they should have done a long time ago.
Take Southwest Florida for instance, where the jobless rate is over 10% and the foreclosures are through the roof. The average home has lost over 50% of its value in the last two years. We are a perfect example of why there is a need for this legislation.
Yet, we have been waiting two years with no relief in sight. Don’t get me started on Local and State Government either.
This post was submitted by Carmen Dellutri, Esq.
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