*~*This would be awesome for HOMEOWNERS *~*

[optimistic1]

Though a cram down bill looks extremely likely to pass time around, it will surely be limited in scope, possibly only available to those with “subprime loans,” and probably only on a temporary basis.

Of course, lets only bailout the irresponsible people that didn't understand that their payment changes after 3 years. How ridiculous. Where is my bailout and my cram down package? I saved for a down payment, got a 30 year fixed rate, and participated in a government bond program. Meanwhile people were getting mortgages with stated income. Those people deserve to have their stuff thrown out of their house including themselves. They are the reason my house is worth nothing, and so are the banks that wrote and invested in those loans, and then were rewarded by Bush and received billions of dollars. That is the problem, because if my value never returns for my house, I will walk away and buy again later in life, and many are already doing just that, walking away.

I gotta take a walk now, that phrase above simply disgusts me.

[simon2020]

Here's more --- and I DO think it will pass this time around. Flamingo, this will be part of the STIMULUS PACKAGE and NOT a separate bill.

************************************************** ***********

A new law that would allow bankruptcy judges to modify the terms of mortgages on primary residences seems a certainty now, according to a Reuters report.

Democrats in both the House and Senate are reportedly preparing a plan to introduce such legislation that should get president-elect Barack Obama’s blessing once it reaches his desk.

Similar bills were strongly opposed by industry groups like the Mortgage Bankers Association and President Bush, and were eventually shot down last year before they had the opportunity to become law.

Opponents of such bills have argued that interest rates on home loans could jump one-and-a-half to two percentage points higher as a result, and would further restrict already tight lending conditions.

The MBA in particular has argued that a so-called “bankruptcy cram down” would make it more difficult for lenders to assess property values, leading to higher down payment requirements and closing costs.

Proponents of the bill, mainly consumer advocacy groups, believe it could help distressed homeowners work more effectively with their lenders to find viable solutions other than foreclosure.

Though a cram down bill looks extremely likely to pass time around, it will surely be limited in scope, possibly only available to those with “subprime loans,” and probably only on a temporary basis.

Interestingly, last month the now quite desperate National Association of Homebuilders flip-flopped on their mortgage cram down stance, with chief executive Jerry Howard now supporting a temporary provision.

Current law allows bankruptcy judges to modify terms and reduce principal balances on second homes, but not primary residences.

[Flamingo]

If it does ever pass it could take years to pass, just like the new law change that took place in 2005...we filed in early 2002 and our attorney mentioned it to us and that it was on hold and would still take a while to pass. Secondly, there will surely be qualifications to ensure the mortgage is affordable to the filers even after any cramming, and, Thirdly, there will be such a revolt among regular homeowners who struggle holding two or more jobs to make their mortgage payments and put food on the table and will wonder why there are not options for them also. They could be upside down also but realize that if they let things go, they too can take advantage of filing a Chapter 13. I don't think this will pass and if it does, there will be many exceptions and qualifications which will probably exclude a majority of filers.

[optimistic1]

Wow, that would be awesome considering I am upside down over 100,000 on my worthless home.

But, I dont understand, how exactly does that work? Does this mean, if I get a cram down, I must pay the market value of my home within a 5 year period? Or after the 5 years I no longer owe the underwater balance?

And with my luck, they will probably pass it, but there will be a clause in the law for FHA loans.

From what I have read, this proposal seems very promising, but I am curious of the details.

[simon2020]

If you, like I am contemplating filing for Chapter 13 very soon, we pray that the Senate passes this in the new OBAMA Stimulus Package that will be on the table this week and through Obama's inaugaration on 1/20/09.

I hope, I hope, I hope it passes!

************************************************** ************************************************** ****************

Stimulus Package to Include Cram-Downs.

House Democrats are likely to unveil legislation on bankruptcy reform that allow cram-downs Tuesday morning, Reuters reported; Rep. Brad Miller (D-NC), a member of the House Financial Services Committee, is set to introduce the bankruptcy reform bill, the news agency said. House Democrats are counting on the support of Sen. Richard Durbin (D-IL), who in November re-introduced similar legislation to reform bankruptcy law in order to allow for cram-downs.

Democrats, including Durbin in particular, have long advocated allowing judges to modify principal amounts of mortgages on primary residences in Chapter 13 bankruptcy cases filed by debtors; currently, such modifications are precluded by law. President-elect Barack Obama, however, has said repeatedly that his administration will make passing cram-down legislation a priority when he takes office in January.