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Helping Families Save Their Homes in Bankruptcy Act of 2009 – Fox Business Network Coverage

By David Leibowitz, Illinois and Wisconsin Bankruptcy Attorney on Jan 12, 2009 in Featured, Mortgage Issues, Mortgage Issues In Bankruptcy, Mortgage Reform

I was privileged to be interviewed today on Fox Business Network about the proposed Helping Families Save Their Homes in Bankruptcy Act of 2009.  This bill known as S. 61 in the Senate, sponsored by Dick Durbin (D – IL) and HR 200 in the House, sponsored by Representative John Conyers (D – MI).  Click on the link to see the entire interview.

The important points of these bills – as currently written- are:

  • Mortgages on a house you live in may be reduced to the current value of the home if the value is now less than the amount due on your mortgages.
  • Terms can be stretched out as long as 40 years
  • Interest rates can be reduced to the Federal Reserve Board of Governors rate plus an additional sum to cover the risk for a loan coming out of bankruptcy.


    • There will be some limits:

  • The law will apply only to mortgages in existence at the time of the enactment of the law
  • The law would apply only if the lender had informed the borrower that it may be subject to foreclosure
  • The law would require the borrower to certify that it had tried and failed to obtain a loan modification from the lender


    • Most bankruptcy judges support this bill.  However, the American Bankers Association as well as most mortgage brokers do not.  So don’t assume that this is a done deal.  Write your Congressmen and Senators and insist that they support these bills.

    Tell them that it is a triple – win because:
    1. Mortgage lenders change foreclosures into performing loans.
    2. Borrowers stay in their houses even though they are filing chapter 13 cases.  In the chapter 13 cases, debtors resolve all of their debts over time.
    3. Neighborhoods are preserved instead of becoming devastated by boarded-up and abandoned houses which the lenders are unable to manage, much less sell.
    You’ll need a good appraisal.  Get one from a Certified Residential Appraiser.  And you’ll need a good bankruptcy lawyer to file and confirm an appropriate chapter 13 plan. Find one here or on Bankruptcy Law Network.

    Related posts:

    1. The King Amendment to the Helping Families Save Their Homes In Bankruptcy Act 2009
    2. Helping Families Save Their Homes in Bankruptcy – Mortgage Loan Modifications For Homeowners in Chapter 13
    3. Why Do So Many People And Organizations Support the “Helping Families Save Their Homes in Bankruptcy Act of 2009”?

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