The “mortgage cram down” issue is back in the news this week. Congress is discussing an amendment that would give bankruptcy judges the power to “cram down” or change the basic terms of a mortgage.
(See the latest BAPCPA Man vs. Mortgantua cartoon for a good picture of what mortgage cram down looks like.)
If the new amendment is approved, it empower bankruptcy judges to extend mortgage terms, reduce interest rates and even lower the principal amount of the loan for homeowners. This would be potentially huge help to homeowners, especially those with home values that are under water.
The same amendment was proposed back in April 2009, but it was ultimately defeated. So the question is whether it has any better chance of passing this time.
The impetus is that the foreclosure crisis continues as unemployment continues to rise. The Making Homes Affordable Act, which was intended to encourage loan modifications, has barely made a dent in the problem. So for the sake of the economy and as a way to help out numerous struggling Americans, the time may be ripe for a more proactive solution to take effect.
The first hurdle is in the House of Representatives where Barney Frank (D-MA) re-introduced the amendment. The bigger challenge, however, will in the Senate, which tends to be less sympathetic to the needs of average Americans and more subject to the influence of the banking and finance lobby.
Of course, for anyone facing imminent foreclosure, all this talk of mortgage cram down is just talk.
If you are facing foreclosure in New York and contemplating your bankruptcy and non-bankruptcy options, it’s important to talk with a good bankruptcy attorney in New York who knows the ins and outs of the foreclosure issues.
Please feel free to contact me for a free initial consultation. We’ll sit down, figure out your situation and come up with the best plan to help you move forward with your financial life.
Contact Bruce Weiner, Esq.
EMAIL Bruce Weiner
Phone
(718) 855-6840 (Local)
(866) 402-8476 (Toll Free)
Fax (718) 625-1966
Go to Bankruptcy Lawyer Brooklyn NY to learn more about Rosenberg Musso & Weiner LLP and/or to set up a free consultation.
