MORTGAGE MODIFICATIONS FROM THE BENCH INSTEAD
Now that specs of the Housing Recovery Plan has been announced, another huge component of getting out of this housing mess is allowing Judges to modify mortgages directly from the bench. Like the Recovery, this is not a catch - all for everyone but certainly whatever the population is who will benefit is more that before.
We all know that reversing or amending policies can be time consumming........at best, but for nearly 2 years people who fled to bankruptcy court for protection still were at the lenders/servicers mercy to get their payments in line with what they professed to be able to afford, and often times there was very little common sense to bring the payments in line with the proposed budget.
Of course, this is not a Silver Bullet, as Judges can be pretty tough but the big drawback during the past 2 years is the Judges have been handcuffed and some had the feeling........"if we can't do what we are here to do........then what is our purpose?" Again, this is not a giveaway but the spirit of BK13 is to allow people to get back on their feet while keeping their primary home.
Anyway, we will be tracking the progress once the law has been updated.
The Bottom Line.....and why this legislation is needed.
"Under the current code, Chapter 13 debtors come up with a debt-repayment plan to stave off foreclosures. But while that plan allows them to pay off the amount they're behind, homeowners' monthly mortgage payments don't change. Many struggling homeowners, particularly with adjustable-rate mortgages, don't qualify for bankruptcy protection, because they can't afford their payments going forward."
In case you missed it or haven't seen the actual document, here are the specs of the Housing Recovery Plan.
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Fred Thomas, III VP, CBVice President, Chief Bloggeroligist
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