A Change is in the Works?
The Helping Families Save Their Homes Act of 2009 [H.R. 1106] passed the House of Representatives on March 6, 2009. The Act will allow U.S. Bankruptcy Court Judges to modify mortgages on primary residences in certain types of bankruptcy proceedings by reducing the balance of the mortgage to the fair market value of the house. If the law passes, a Bankruptcy Judge could be given the power to reduce the balance of a home loan and/or reduce interest rates thereby reducing the borrower’s mortgage payments.
While speaking in Mesa on February 18, 2009,the President reaffirmed his administration’s support for the Bill,stating: “My administration will continue to support reforming our bankruptcy rules so that we allow judges to reduce home mortgages on primary residences to their fair market value – as long as borrowers pay their debts under a court-ordered plan.”