More On Proposed "Forced Mortgage Modifications" In Chapter 13 Bankruptcy

According to a U.S. Senate Press Release:

• United States Senator Dick Durbin (D-IL) introduced legislation [Wednesday] which will allow hundreds of thousands of homeowners to modify their mortgages in bankruptcy to avoid foreclosure. The collapse of the subprime mortgage market has put approximately 2.2 million families in danger of losing their homes. Durbin’s bill, The Helping Families Save Their Homes Act, will allow these families, as a last resort, to file for Chapter 13 bankruptcy and work with a judge and the lender to modify the mortgage so families can make affordable payments and keep their homes.

Similar legislation, called the Emergency Home Ownership and Mortgage Equity Protection Act of 2007, was introduced in the U.S. House of Representatives last week. Among the things Durbin's legislation would do is:

• Eliminate a provision of the bankruptcy law that prohibits modifications to mortgage loans on the debtor’s primary residence, so that primary mortgages are treated the same as vacation homes and family farms.


• Extend the time frame debtors are allowed for repayment, to support long-term mortgage restructuring.


• Waive the bankruptcy counseling requirement for families whose houses are already scheduled for foreclosure sale, so that precious time is not lost as families fight to save their homes.

For more, see Durbin Introduces Bill to Help Hundreds of Thousands of Homeowners Avoid Foreclosure.

See also:

• Center for Responsible Lending Press Release - Statement in Reaction to the Democratic Leaders Plan on Foreclosures ("Right now the [bankruptcy] code makes the family home the only asset the courts can't save from foreclosure, even though vacation and investment homes, family farms and commercial real estate can be protected"),

• Congress Considers "Forced Mortgage Modifications" For Homeowners In Bankruptcy; Elimination Of Credit Counseling For Ch. 13 Homeowners In Foreclosure.