X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
WASHINGTON — Bankruptcy judges would get new authority to modify the terms of a mortgage on a homeowner’s primary residence under legislation approved Thursday by the House Judiciary Committee to assist homeowners facing foreclosures because of the recent sub-prime mortgage crisis. Under current law, bankruptcy judges are able to adjust terms of a loan only on second homes. H.R. 3609 allows them to modify the mortgage for a primary residence based on its actual value rather than on an inflated appraised price if the borrower shows he or she is unable to make payments and the home is in the foreclosure process. The committee had been studying legislation that sought to alleviate some of the subprime crisis through bankruptcy law. The action yesterday was a bipartisan compromise replacing a broader bill that was supported by consumer bankruptcy attorneys and opposed by the banking industry. “H.R. 3609 deals with a critical aspect of the mortgage foreclosure crisis that neither the administration nor Congress has yet to address, namely, homeowners who are already facing foreclosure, but could — given the right tools — regain their financial footing if they could restructure their mortgage obligations,” said committee chair, Rep. John Conyers, D-Mich. “We should not leave it to the industry to fix this problem.” Conyers sponsored the compromise with Rep. Steve Chabot, R-Ohio. The bill is supported by a number of consumer groups including the Center for Responsible Lending, as well as the governors of Ohio, Michigan, Illinois and New Mexico. Chabot said the bankruptcy change could directly assist the more than 600,000 homeowners currently facing foreclosure and the two million homeowners who will see their mortgage rates skyrocket over the next two years.� In addition, the bill will encourage lending institutions to renegotiate the terms of loans that have become too costly for the homeowners to afford.� �

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.