Monday, October 12, 2009

Modification Of Home Mortgage Modifications

The Treasury Department's announcement that it has met its self imposed November 1, 2009, deadline for half a million voluntary home mortgage modifications under its HAMP program is being met by skepticism that many of these modifications will ultimately save the borrowers from foreclosure. The Congressional Oversight Panel released a report Friday morning recommending that Treasury criticizing the home loan modification process as outdated, "targeted at the housing crisis as it existed six months ago, rather than as it exists now." Harvard University law professor Elizabeth Warren, who chairs the panel, says it does nothing at all to help borrowers at risk because of a job loss in the family.

House Financial Services Chairman Barney Frank is threatening to add a provision to the financial regulatory reform bill authorizing bankruptcy judges to reduce the principal amounts of home loans for bankrupt borrowers. The House has already passed a stand alone bill to achieve the same result, but that measure has not been called in the Senate. Senate Majority Whip Dick Durbin is expected to push the bankruptcy mortgage cram down measure hard, though the Senate already rejected the earlier House proposal.
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