Major Provisions of House Mortgage Bankruptcy Bill

By admin • March 8th, 2009
Having a hard time with your mortgage payments?

The House of Representative’s housing rescue plan includes a controversial measure backed by President Obama to let bankruptcy judges rewrite mortgages to reduce monthly payments for debt-strapped homeowners. It also contains other loan modification measures to stem the tide of foreclosures and keep credit flowing. Here are the major provisions:

 

_ Allow bankruptcy judges to lower the interest rate or principal on existing home mortgages for certain debt-strapped homeowners who cannot afford the loan and have already sought such a deal with their lenders.

 

_Provide a safe harbor to protect mortgage holders from investor lawsuits if they modify the terms of a home loan.

 

_Modify a Federal Housing Administration foreclosure rescue program enacted in 2008 to make it more appealing for mortgage lenders to participate, including reducing FHA fees and boosting incentives for adjusting mortgages for struggling homeowners.

 

_Take $2 billion of the $700 billion Wall Street bailout fund to pay for the FHA loan program changes.

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