by Moe Bedard
The House Panel passed a measure yesterday to allow bankruptcy courts to modify loans on primary residences for troubled borrowers.
The controversial legislation that has remained stagnate in Washington for more than a year seemed to be gain serious momentum as Obama took office and the Democrats gained more power on the Hill. The new mortgage bankruptcy rules being proposed would mean a huge victory for struggling homeowners who have had little to no protection when dealing with their lenders and mortgage servicers.
Loan modifications and mortgage “cram downs” AKA “principle reductions” would be eligible in bankruptcy court and allow judges to whack the values and mortgage balances on thousands and possible millions of homes.
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by Moe Bedard
Obama Bankruptcy quotes from July 2008:
Families, he said, who “are being preyed upon by predatory lenders. If you’re protecting America, America should be protecting you from unfair bankruptcy laws.”
He said he would create a “fast-track bankruptcy practice” for military families, which would ease restrictions against declaring bankruptcy, eliminate “unnecessary” paperwork and “let them keep a greater share of the value of their home.”
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