Senate Bill Offers Relief, Opposed by Mortgage Industry
By Kurt O'Keefe, Detroit Consumer Attorney on Feb 22, 2008 in Predatory Lending
Now that legislation is pending that would allow bankruptcy courts to re-write some home loans, the mortgage industry is screaming.
The usual scare talk about mortgage rates being forced higher if the bill becomes law.
As we have blogged many times, the proposed bankruptcy law, in narrowly defined cases, would allow courts to write down mortgage balances to the value of the home, and change interest rates from ARM to fixed. Now is the time to contact your Senators to urge them to support this change.
If the law is not passed, the mortgage companies foreclose, and are stuck with trying to re-sell the homes.
If the law is passed, they save the time and cost of the foreclosure process, and are paid the value of the home, which is all they would get after foreclosing.
By preventing up to 600,000 foreclosures, the bill would help slow the decline in home prices by reducing the homes for sale.
The bill could come up for a vote next week, so contact your Senators today!
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