The Mortgage Bankers Association will get raked over the coals in a new study published by Georgetown University Law professor Adam Levitin. The new study will show the MBA is misleading Congress and the news media when it claims that fixing the mortgage foreclosure crisis by tweaks to bankruptcy laws will result in significantly higher interest rates. This is a significant finding, in that nearly all of the MBA's argument against the plan to save 500,000 American families from mortgage foreclosures rests on a bogus claim about a spike in mortgage interest rates. Wow. Things are heating up over a proposal to give federal bankruptcy court judges the power to modify the terms of bankrupt borrowers' mortgages -- including reducing loan principal if a home in a declining market has lost much of its value.
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland
This is really a very interesting proposal. I've been waiting to see how Congress would treat it, now that they're down on creditors and falling over backwards to help the consumer.
When the new bankruptcy code was modified a few years ago, they went overboard to protect the creditor.
What a difference a little mortgage meltdown makes.
Feb 11, 2008 12:25 PM
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