Behind the Scenes – Changing The Bankruptcy Laws To Protect Homeowners
Here’s an email I received from NACBA about the on-going attempts to change bankruptcy law to allow for modification of home mortgages. Presently you can only reinstate them. Believe it or not, you can modify a vacation or investment home in Chapter 13 bankruptcy, but not a home mortgage. The present laws help rich people and hurt the poor homeowners that the laws are designed to protect. The sytem is currently upside down. We’ll see if Congress actually changes this.
NACBA President Henry Sommer is testifying today before the Senate Judiciary Committee in support of S. 2136, the “Helping Families Save Their Homes Act,? introduced earlier this year by Senator Richard Durbin (D, IL). As we have reported on previously, NACBA has played a key role in advising Senator Durbin’s staff on the substance of the bill, which would amend the bankruptcy laws to allow for the modification of a home mortgage in Chapter 13. NACBA has been joined in its efforts to help families save their homes from foreclosure by the National Consumer Law Center, the Consumer Federation of America and the Center for Responsible Lending. A number of other organizations, including AARP, the Leadership Conference on Civil Rights, AFL CIO and the National Women’s Law Center, also are supporting the legislation.
Other witnesses at today’s hearing include economist Mark Zandi, a Chicago homeowner who would be helped by the legislation, Illinois Bankruptcy Judge Jacqueline Cox, Alabama Bankruptcy Judge Thomas Bennett, ABI Resident Scholar Mark Scarberry, and Drexel University professor Joseph Mason.
The hearing begins at 2:30 p.m. ET. Testimony from the hearing will be posted about the time the hearing starts and may be found at http://judiciary.senate.gov/hearing.cfm?id=3046. It is not clear if there will be a Webcast of the hearing; if there is, you can find it by going to http://judiciary.senate.gov/. If there is no Committee Web cast, C-SPAN provides audiocast. To find the C-SPAN link, go to http://www.capitolhearings.org/, scroll down to the hearing and click on the room number.
Maureen Thompson, NACBA Legislative Director