Mortgage Modification Bill Advances in Congress

28 Jan Mortgage Modification Bill Advances in Congress

The “Helping Homeowners Save their Homes in Bankruptcy Act of 2009”, HR 200, sponsored by Representative Conyers (D-Mich) advanced in Congress yesterday. In a hearing which lasted almost four hours, members of the House committee considering the bill explained why it was so urgent. The congressmen particularly recognize that mortgage lenders don’t feel any reason to negotiate mortgage modification agreements at present. Several members of Congress personally experienced the inability to actually speak with anyone at a mortgage company who was able or willing to consider a loan modification agreement.

Congress is starting to realize that unless lenders face the reality of mortgage modifications in chapter 13, they won’t deal with their borrowers.

As reported previously, HR 200 would help homeowners in many ways:

  • Reduce interest rates
  • Stretch out terms of the mortgage
  • Eliminate adjustments in adjustable rate mortgage
A new point which has been introduced is important, even though somewhat optimistic taking into account the present market. In order to give the lender some possible “upside” the lender would share in any increased value in the debtor’s house from the time of the mortgage modification until the time of the sale if the house is sold anytime during the first 4 years after the modification.
Congratulations to Representative Conyers and strong praise to Representative Delahunt for their strong, passionate and coherent support of this very important legislation.
Contact your Congressman and Senator – by email, fax or phone – to support this critical legislation. Do it today! Here’s a great link to show you how to do this.
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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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