There is currently a bill before the house (HR200) that would allow bankruptcy judges to modify terms of abusive mortgages in order to avoid foreclosures. Currently, the mortgage companies are saying, “Fuck you, you signed it, you owe it, we don’t care if the interest rate gets ‘jumped’ to 28%, and we more than happily add tons of surcharges.” The problem is that this makes foreclosure inevitable, and in the end, the mortgage companies actually get less than they would if they modified the more predatory terms. Homeowners lose their homes. Mortgage companies lose their income. Neighborhoods lose as home prices continue to fall. Everybody is a loser under the current system.
Below is a sample letter written by a lawyer I know which was sent to Biden, Carper, Castle, and what’s-his-name who’s seat-warming for Biden…? Oh yeah, Senator Ted. Use it as a guide or riff on your own, but do something today to support HR 200.
I am writing to applaud President Obama for resolving to move with urgency to address this nation’s foreclosure crisis. An astounding 6,600 American families are losing their homes to foreclosure each and every day. As a bankruptcy attorney, I see the real world impact on families, neighborhoods and communities of our failure to date to stem the tide of foreclosures.
Importantly, President Obama called for legislation that would allow for judicial modification of home mortgages. Ever since the mortgage foreclosure crisis erupted into public view in 2007, a broad array of consumer, civil rights, housing, community, labor and other organizations, as well as economists, have advocated for judicial mortgage modification relief as an effective approach to stemming the explosion in foreclosures. This solution, unlike every other solution put forward to date, comes at absolutely NO cost to U.S. taxpayers. This is one solution we know will work. Courts should be empowered to implement economically rational loan modifications where the parties are unwilling or unable to do so on their own.