This Bill right here would stop foreclosure for hundreds of thousands of homeowners and save them from their toxic mortgages that are eating them alive.
Under loan modifications, the lender and loan-servicing company change the mortgage terms to make them more affordable to the borrower. This can include lower interest rates and forgiving a portion of the principle. Unfortunately bankruptcy law bars mortgage restructuring even when a foreclosure is near. Foreclosures are expected to rise as payments on some 5 million adjustable-rate mortgages increase over the next 18 months.
Here are some excerpt from the ABC News article.
“NEW YORK (Reuters) – Bankruptcy courts would be allowed to alter mortgages written by “predatory lenders” in moves that could save 600,000 Americans from foreclosure, according to the author of a bill introduced in the U.S. Representatives on Friday.
The legislation would repeal a provision that prohibits a bankruptcy court from modifying a home mortgage, according Representative Brad Miller, a North Carolina Democrat, who sponsored the bill along with Democrat Linda Sanchez of California.
The bill may encourage lenders to do more modifications, which are now “few and far between,” Miller said in an interview. A report by Moody’s Investors Service last week found that lenders eased borrowing terms on just 1 percent of subprime mortgages with interest rates that reset higher in January, April and July.
Despite the hurdles, modifications are seen as still the best alternative for the $7.2 trillion mortgage bond market, which is credited for both raising money for the U.S. real estate boom and the excesses that brought housing to its knees last year, according to the American Securitization Forum, a lobbying group. Foreclosure is more costly for lenders and investors, it argued.’
A massive loan modification campaign is the only way to fix this situation.
{ 3 comments… read them below or add one }
hey Moe! We bought a house just about 2 years ago on a 2 year fixed interest only loan. Bad idea- realize that now b/c soon it will become adjustable unless we can come up with a solution. It has been a difficult month b/c beginning of this month- i called our lender for a loan modification and didn’t realize that we had to be at a past due status with our payments. While in process of the modification we made our Sept. pmt b/c we prefer to not be late w/our pmts. Talked to them earlier this week & they gave me the worst news – everything is cancelled b/c we made the pmt on time. I cannot believe all i have been trying to do- all we want is to save our home. We’re stuck. Then they gave me another option to refiance but b/c we have a second mortgage we can’t. That absolutely makes no sense to me at all. We are also trying to refiance w/ a local bank- but with housing that’s gone down. Our house is probably not worth what is was 2 years ago. How will this new bill help us?? Any suggestions will be appreciated.
Hello there!
You don’t have to be past due. That’s just the lender’s policy because they are most likely idiots. They want you to ruin your credit, so you can now apply for a loan modification? Doesn’t make ant sense, does it?
I don’t have all the specifics of the new bill to properly give you advice. But I will most definitely be on top of any new developments.
Best of Luck and Stay Strong!
Moe
Definetly one of the best advices for loans on the web. Check this site i found for more info:
http://dkenews.blogspot.com/2008/01/homeowners-secured-loans.html