Daily Real Estate News | December 5, 2007
Bill Would Help Home Owners at Brink of Foreclosure
U.S. Sen. Dick Durbin (D-Ill.) is pushing for a bill that would allow bankruptcy judges to change the terms of a mortgage on the primary residence of owners at risk of foreclosure or bankruptcy.
Judges would be able to lower an adjustable interest rate to a lower, fixed rate. They already have the power to do this for car loans and a number of other debts.
Durbin says his bill could help an estimated 600,000 families at risk of losing their homes because of rising adjustable mortgage rates.
“A strategic change in the bankruptcy code will provide home owners facing foreclosure a degree of financial stability – even when the market cannot,” Durbin said.
Supporters of Durbin’s bill include senior citizens, bankruptcy attorneys, the AFL-CIO, and the NAACP. The American Bankers Association and home builders are among opponents.
Floyd Stoner, a leading lobbyist for bankers, says bankruptcy judges lack expertise to predetermine a loan’s size, value, and length.
Source: The Associated Press, Dennis Conrad (12/05/2007)