LAW OFFICES OF ROGER J. YEHL

FORMER CHAPTER 13 TRUSTEE STAFF ATTORNEY

REDUCTION OF MORTGAGE TO VALUE OF HOUSE?  SEE FEBRUARY 3, 2009 ARTICLE BELOW (POSTED IN DOWJONES BUSINESS NEWS)

 What is happening in Washington DC?

The Senate and House of Representatives are drafting legislation that will allow individuals to REDUCE the principal balance of their mortgage to the value of their home.  This is also known as a Mortgage cramdown.  It is highly likely that if the Bill passes through Congress, President Obama will sign immediately.


 

Who will benefit from this legislation?

Many of you who have purchased or refinanced your homes and are negative in equity, aka upside-down, may qualify to reduce the principal of your mortgage to the value of your home.  This law change will have the immediate effect of allowing you to begin to create equity in your home.  Further, many of you who be unable to afford the mortgage(s) currently, may be able to restructure your mortgage making it affordable. 

On the other hand, if you are still unable to afford the mortgage, you will likely have the opportunity to sell the property since the mortgage will be reduced to the property value.  Currently, many people cannot sell their home because buyers are unwilling to pay what is required to satisfy the total mortgage debt.  Once, your mortgage principal has been modified to a realistic value, buyers may begin bidding on the property allowing you to sell.

To learn more about the legislation or obtain more information about your situation, please complete the free evaluation or call 716-573-4980.

Rep Frank:Homeowner Help To Be Joined With Mtge Cram-Down Bill

Tuesday February 3rd, 2009 / 21h08
By Jessica Holzer
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- A key U.S. House lawmaker said Tuesday that a bill to revamp a program to help strapped borrowers refinance into cheaper loans would likely move with legislation to allow people to have their mortgage debts reduced by bankruptcy judges.
House Financial Services Chairman Barney Frank, D-Mass., said he expects the two measures to be joined before they go to the House floor, though he did not speculate on when the vote could occur.

While Frank supports the bankruptcy measure, he said Congress ought to take steps to insure that homeowners don't fall into bankruptcy.

"It does seem that we should be doing the most that we can to present an alternative," he said in opening remarks at a hearing on promoting lending and bank liquidity.

The bankruptcy legislation, which is fiercely opposed by the banking industry, does not come under the jurisdiction of Frank's committee. Sponsored by House Judiciary Chairman John Conyers, D-Mich., it passed that panel last week.

After stalling in Congress last year, the bill has gained traction in recent months with the shift in power in Washington and mounting evidence that mortgage servicers have not done enough to modify loans for troubled borrowers.

The banking industry is lobbying hard to have the legislation narrowed in scope. Lobbyists argue that allowing the principal balance of mortgage loans to be reduced by bankruptcy judges - a move known as a cram-down - would cause mortgage rates to soar for all other borrowers.

Frank, who noted Tuesday that he has been a supporter of the bankruptcy bill, has not so far put his imprint on the measure. Industry lobbyists speculate about whether his involvement in negotiations would result in changes to limit the legislation's impact.

On Wednesday, Frank will convene his committee to revamp the Hope for Homeowners program and make permanent a temporary increase in the Federal Deposit Insurance Corp. limit of $250,000.

Hope for Homeowners was created in October to allow certain borrowers to refinance into more affordable loans backed by the Federal Housing Administration.
The Congressional Budget Office predicted that the FHA would have insured roughly 40,000 loans under the program by this time. So far, it has not insured any.

-By Jessica Holzer, Dow Jones Newswires; 202-862-9228; jessica.holzer@dowjones.com
Tuesday February 3rd, 2009 / 21h08Source : Dowjones Business News

GET A FREE EVALUATION TO DISCUSS YOUR PERSONAL CIRCUMSTANCES BY COMPLETING THE ONLINE EVALUATION FORM OR CALLING 716-573-4980.