14 Feb Mortgage Loan Modification May Soon Be Allowed in Chapter 13 Bankruptcy
A bill introduced in the U.S. Senate last night will change the bankruptcy law to allow judges to modify a debtor’s mortgage loan on his home. This bill will help families save their homes from foreclosure.
The proposed law, S.2636, eliminates a provision of the bankruptcy law that prohibits modifications to mortgage loans on the debtor’s “principal residence” for homeowners who meet strict income and expense criteria. With this change, primary mortgages are treated the same as vacation homes and family farms.
Senate Majority Leader Harry Reid (D, NV) introduced S. 2636, the Foreclosure Prevention Act of 2008 last night and indicated that the bill will be considered on the Senate floor as early as the week of February 25th, 2008. Title IV of the bill is the original S. 2136 introduced by Senator Dick Durbin.
For other provisions of S.2636 to help borrowers outside of bankruptcy, to help the communities harmed by the current foreclosure crisis and to prevent future foreclosure problems, see the detailed summary of the bill by the National Association of Consumer Bankruptcy Attorneys Legislative Director Maureen Thompson on www.mortgagelawnetwork.com
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