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Judicial Mortgage Modifications Get a Second Chance

December 10, 2009

SS ForeclosureEarly in 2009, AFFIL and our Partners pushed Congress to take the common-sense step of allowing bankruptcy judges to modify mortgages loans.  This change – which would cost taxpayers nothing – could save  millions of homes from foreclosure.  The House passed the measure as H.R. 1106, but the Senate defeated it, by a vote of 51 to 45 on April 30.

Now, there’s another opportunity to lift the ban on court-supervised loan modifications.  An amendment to H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009, would make this change.  The House of Representatives will likely vote today on this amendment and many others – as well as the entire reform bill.

AFFIL, Americans for Financial Reform, and our Partners all strongly support lifting the ban on judicial loan modifications.  The foreclosure crisis has not been adequately addressed by any of the programs designed to fix it, because no program requires the banks to participate.  Families are still losing their homes every day.  The destablized housing market continues to drag on the fragile economy.  We need this fix to prod banks into making modifications, and we need it now.

Click here to read the letter (PDF) AFR sent to Congress supporting judicial mortgage loan mods.  And click here to contact Congress about this important issue.

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2 Comments
  1. mark wolf permalink
    February 11, 2010 5:53 pm

    Unbelievable that anyone with an ounce of respect for property rights could be FOR this bill allowing 3rd parties to just change the terms of a contract YOU MADE with another party. How would you like it if some govt bureaucrat had the power to just come and change any contract you signed. Today you like it cuz it modifies a loan that you took out that now you can’t afford. What is next time someone unrelated just raises your rent contract by $1,000 per month? WHy not, what is the difference in making “legal” some party that has nothing to do with the contract can change the terms. This is utterly ridiculous in a free society. WHY WHY WHY should any lender ever take on the slightest risk ever again if someone can just come in and change the terms of the contract??? What you will see if lenders requiring a LOT more money down so secure their position, which leads to a LOT less regular folks getting loans. Don’t you understand the secondary effects of what you are proposing??? Get a clue.

  2. Joan permalink
    February 14, 2010 12:19 pm

    In response to the above Mark Wolf, in 2001 I was a victim of predatory lending. I had excellent credit, was employed as a paralegal for 10 years had four savings account and 401k. An attorney recommended me to a mortgage company for a construction loan of $270,000. They hooked me up with Indymac bank. Indymac bank took 61,000 from this loan. I did a refinance on my main residence and $40,000 vanished. I confronted them and they would do nothing about these loans. I had attorney sitting at these closings whom I relied upon to look out for me. You are so naive. These mortgages that people got caught in were deceived, because they were making excessive money on every closing. You have the blame the victim mentality. You need to educate yourself about predatory lending. These people put these mortgages together to rip off as many people as they could. They were wealthy people who did this and they made a bundle of money. The reason the banks don’t want to modify people’s loans is that if they go to foreclosure they will get whatever cash they get plus they are insured on these loans. The banks never lose money. What they did to people was unconsionable. We did not go out to rob and commit fraud. They did for their own gain. I put 80,000 up on my construction loan, and 90,000 on another property. Why don’t you get a clue and start educating yourself to the truth. They gave these mortgages out to so called regular folks. These folks could have afforded their mortgages, they couldn’t afford the loans they were put into. You get a clue. When did we ever have so many foreclosures and so many banks that made a ton of money because of these loans.

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