Amend U.S. Bankruptcy Law To Help Prevent Foreclosures

---snip---

Whatever your views on the matter, this country is now paying the price and its global impact is no less than mindboggling. In the view of many advocates for working families losing their homes, Congress has refused to enact one important strategy that could address a big part of the problem -- that is, to amend the U.S. bankruptcy laws to give judges the power to renegotiate mortgages, which could help homeowners keep their homes.

And now that the federal government, and thus American taxpayers, are taking ownership stakes in U.S. banks, it's ironic that taxpayers will be forcing foreclosures on their fellow Americans. Is this finally a time where the bankruptcy laws might change, given the changed role of U.S. taxpayers who now, literally, may hold their neighbors' mortgages?

Indeed, the irony in the current law is that if you own a yacht, a second residence or an investment property, you can file for protection under Chapter 13 to renegotiate the loan and restructure payments ... but you can't with your primary residence.

Such an action would go a long way toward avoiding the heavy costs facing taxpayers. With Treasury Secretary Henry Paulson projecting some 2.5 million foreclosures for the balance of just 2008, the exclusion in both the recent House and Senate bills of measures to prevent foreclosure literally throws "good money after bad." In 2009 and beyond, the figure could rise to more than six million foreclosures, according to a Credit Suisse analysis.

Foreclosures for Maine are projected by national mortgage industry sources to be 6,000 for 2008 and 2009. While not as visible as in such states as California -- with 340,000 projected -- Maine families are experiencing this national tragedy. Many of these home loans shouldn't have been made in the first place or under the terms they were given.

MORE: http://morningsentinel.mainetoday.com/view/columns/5494086.html

and now you want to make everybody else's house payment? If you can't afford it their you don't belong. You can't afford the taxes, utilities or maintenance. You are over your head. Keeping home prices at elevated levels that are not justified by people legitimate income only PROLONG the problem, not fix it.

Then I had to replace my roof. Then I was unemployed for a year. Then the bank froze my Line of Credit because I all of a sudden owed more than the house was worth. I pay my mortgage on time and have no credit card debt, and have tried countless times to get the bank to work with me to forestall disaster, since I'm one home repair or health crisis away from bankruptcy. They tell me there's NOTHING they'll do unless I'm already in default on my house payments, which frankly is sounding better and better.

I had to put a new roof on also.

"all of a sudden owed more than the house was worth"
I am not sure why that has been a justification to quit paying for a house. Did you efver buy a car? It was wroth many thousands less as soon as you drove off the lot.

We are ALL one health crisis away from bankruptcy and then I suppose that is what bankruptcy is for and a testament as to why we need national health care.

It is tough on all of us.

allow tin/cardboard shacks to be built up like in Mexico, so the poor can have shelter...sorry, when things beyond your control puts you out on the street there should be SOMETHING besides living under a bridge to support you! (yes, even YOU!)