January 29th, 2009:

House Bill 200, With Amendments, Approved By Committee And Sent To House Floor

Jan 29th, 2009
by Doug Jacobs.
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The , “Helping Families Save Homes in Bankruptcy Act of 2009” was approved by the House Judiciary Committee, voting strictly on party lines, and sent to the House Floor late on January 28, 2009.

The committee added several amendments to the bill. Several of these are discussed in the post, “Changes to HR 200 as Reported from Committee.”

But, an additional change was added as well, making the act inapplicable to anyone who obtained their home loan by “…misrepresentation, false premises, or actual fraud.” This amendment was presented simply to insure that the bill, intended to help normal, hard working; families can’t be used for the benefit of crooks trying to take advantage of the system.

Now is the time to contact your Congressperson. The vote will be soon (hopefully).

Holder, holder, who’s the holder?

Jan 29th, 2009
by Cathy Moran.
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The current version of  H.R. 200 requires that a borrower attempt to negotiate a modification with “the holder of the claim” before they are eligible to propose a modification through Chapter 13.  Chip Parker points out that who holds the claim is a big unknown.

Presently in bankruptcy court, servicers who bring motions for relief from stay  often can’t tell you who owns the note.  They  haven’t a clue who has physical possession of the instrument, and even more often can’t tell you correctly  whether the debtor has made a payment or what they did with the money.

If you interpret this provision as requiring the borrower to contact the servicer in search of loan modification, the law will be easily satisfied.  The debtor can certainly testify what they’ve done, and the credibility of any servicer who disputes such assertions is likely to be suspect.

If “holder” is intended to invoke its technical meaning in the Uniform Commerical Code, then the courtrooms will be awash with questions on this score.