Monday, March 30, 2009

Allowing Bankruptcy Judges To Modify Mortgages

The Mortgage Modification Bill that was recently passed by the House of Representatives and is still waiting approval by the Senate is a controversial topic that is constantly discussed . The bill would let judges reduce the value of a loan, extend the terms of the loan, lower the interest rate, delay the effective date of an adjustable rate increase and make other similar changes to a mortgage in order to save a persons home from foreclosure. This bill certainly alleviates a substantial amount of stress on the foreclosure market, but unfortunately this incentive is not available to any homeowners that can afford to repay their mortgages. Do you think it's fair to deny homeowners that ensure their mortgages are paid on time the opportunity to benefit from a modified mortgage that would help make their payments more affordable? This is definitely food for thought and is something I hear come up in conversation very often. What is your take on this?

Plan to Let Judges Alter Loans Stalls [WSJ]
Senate Democrats seeking support for mortgage cramdown legislation [Bubble Meter Blog]

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1 comments:

Anonymous March 30, 2009 at 6:30 PM  

It is very unfair. Also I think that mortgage guidelines on refinancing, cash refinancing and financing for investors are ridiculous. Instead of releasing foreclosed properties to investors and writing them off from the books the create silly obstacles that prevent investors to operate normally in this market