- This topic has 6 replies, 6 voices, and was last updated 12 years, 5 months ago by
SK in CV.
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October 28, 2011 at 8:41 AM #19241October 28, 2011 at 12:44 PM #731496
SD Realtor
ParticipantDoes this really surprise you? The only thing odd about it is the timing…. why now instead of not a year or two ago? hmmmmm
October 28, 2011 at 6:49 PM #731538kev374
Participantthis is an absolutely terrible idea. It gives people who are current on their underwater mortgage the incentive to default so they can be helped unless of course they plan to reduce everyone’s principal regardless of standing LOL!
October 28, 2011 at 7:43 PM #731545hslinger
ParticipantIt’s for bankruptcies
“The head of the Federal Housing Finance Agency (FHFA), which oversees the mortgage-financing companies, met with 19 Democrats and discussed a proposal that would allow bankruptcy judges to reduce principal amounts on loans.”
House R’s wont go for this anyway.
October 28, 2011 at 8:33 PM #731550bearishgurl
Participant[quote=hslinger]It’s for bankruptcies
“The head of the Federal Housing Finance Agency (FHFA), which oversees the mortgage-financing companies, met with 19 Democrats and discussed a proposal that would allow bankruptcy judges to reduce principal amounts on loans.”
House R’s wont go for this anyway.[/quote]
hslinger, in effect, this is giving BK judges the power of “cramdown,” something they have never had.
October 28, 2011 at 8:35 PM #731549ParticipantIf it passes, it would only help those who file … and eventually “discharge” a Chapter 7 BK … or possibly a Chapter 13.
As an “underwater debtor,” what’s the incentive to CARE whether their FICO score tanks 100 – 300 points for a foreclosure if if will tank 300+ points for filing … and discharging a Chapter 7 BK??
The BK “victims” (lol) have been and are already “paying the price” in their severely-lowered FICO score and l-o-o-o-ong wait to be treated like a human being with integrity again by the “real world.”
I could care less if this passes. I’m for it with the provision that the debtor/delinquent “trustor” has to file (and successfully discharge) their BK case in order for the “forgiveness” to happen.
In doing so, they have paid a MUCH HIGHER price than if they just walked from the property and let it foreclose. Granted, they get to stay in their homes with SOME debt forgiveness but in my mind, the price is too high. To each his own :={
October 31, 2011 at 6:41 PM #731797SK in CV
Participant[quote=bearishgurl][quote=hslinger]It’s for bankruptcies
“The head of the Federal Housing Finance Agency (FHFA), which oversees the mortgage-financing companies, met with 19 Democrats and discussed a proposal that would allow bankruptcy judges to reduce principal amounts on loans.”
House R’s wont go for this anyway.[/quote]
hslinger, in effect, this is giving BK judges the power of “cramdown,” something they have never had.[/quote]
Not true. They did have it. Unquestionably before the late 70s. And after changes to the bankruptcy laws at that time (I’m pretty sure it was during the Carter administration) most bankruptcy courts continued with chapter 13 cramdowns. A supreme court case involving American Savings in the early 90’s ended cramdowns on principle residences. They’re still allowed for investment property.
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