Senate Decision To Remove Bankruptcy Modification From Housing Bill Will Kill All Modifications
The President's Housing Bill is about to be destroyed in the Senate. The most important provision is about to be deleted because it is not in the best interests of the banks. Shockingly, the Housing Bill is about to become a spending bill. This housing bill contained a provision which would allow bankruptcy judges to strip down first mortgages on personal residences. Out of all the noise contained with this bill, the one group of individual who should be complaining is the Bankruptcy Judges in Florida, Nevada, California, Ohio, and the other states where foreclosures are through the roof.
So, if the Judges aren't complaining about all of the extra work involved in their courtrooms, who is complaining? The banks and their lobbyists are the ones raising the brouhaha. Why? For several reasons. First, they don't want a neutral third party determining how much their collateral is worth? This would force them to write down the value of their own portfolios. Second, they would lose the power to control the modification process. This is a huge issue. Since the House of Representative passed their version of the cramdown bill in early March, the banks lobbyists have been working overtime to kill this bill in the Senate. Third, the mortgage modification bill would level the playing field for the consumer who wishes to truly modify their mortgage. If the bank won't modify the mortgage fairly, the consumer would have an alternative, an appeal process if you will.
Ask yourself this: If the banks are able to defeat the cram-down bill, how many mortgages will be modified in a truly meaningful way. Answer: None. It is that simple.
This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog and the firm's mortgage modification blog.
