The Senate Judiciary Committee this week entertained discussion on reviving a Bill to allow the modification of mortgages by the judge in a Chapter 13 Bankruptcy. Once again, Senator Durbin (Democrat from Illinois) championed this cause, arguing that such a law would allow hundreds of homeowners to keep their homes. Similar laws were defeated in the Senate in 2008 and earlier this year.
Although this was just a preliminary discussion in the Judiciary Committee meeting, it bodes well that this legislation will be brought again.
The Obama modification plans and similar California laws haven’t yielded the relief intended. They remain voluntary so if the lender doesn’t offer a viable arrangement to the homeowner, nothing happens. A law allowing a judge to oversee the process and put some teeth into it will go a long way to force both the lenders and homeowners to seek a middle ground fair to everyone. Only in that way, can we stem the foreclosure tide.
As before, the Republicans and some “blue dog” Democrats are likely to oppose the legislation, but as foreclosures continue to rise, homes become more and more “up-side down,” and the current economic down-turn continues, there is hope for this new act.
[...] the momentum continues in the judiciary committee to revisit legislation to allow bankruptcy judges to modify mortgages in the context of a Chapter 13 bankruptcy, the mortgage industry is writing letters to the editor [...]