Bankruptcy Bill Passed

by admin on March 6, 2009

Bankruptcy judges are slated to receive unprecented authority now that they can modify primary home loans for individuals going through bankruptcy. Today March 6th, 2009 the US House of Representatives passed a mortgage bankruptcy bill that allows judges to use pimarly loan modifications as a measure of last resort against lenders looking to foreclose on a home.

This is a new wrinkle and the stick in Obama’s Foreclosure Prevention Program that is supposed to force lenders and homeowners to the table to workout their loan so they can stay in their home. Bankruptcy judges have much more latitude to work with bankruptcy lawyers, their clients and mortgage servicers to try and find a solution that works for everyone. A loan modification under the new “Home Affordable Loan Modification Program” will still have to qualify for the rules that were announced by the Obama administration on March 4th.

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