Finally, lenders are coming to the realization that they have no choice but to modify mortgage loans. At this writing, Congress is about to give bankruptcy judges the authority to modify home mortgages. Liquid with THC
This, in the wake of stiff criticism from the Republicans and mortgage industry officials, will force lenders to come to the table in an effort to keep homeowners in their primary residences.
Judges can currently reduce the principal balances on vacation homes, boats and cars, but because of a strong offensive launched by the mortgage industry, primary mortgages have remained untouched.
This has caused further stress with homeowners because payments have traditionally increased. In the past, unyielding lenders have added late fees, missed payments and other assessments to the principal.
Will the new rules send homeowners rushing into court? Will increase? Kathleen Day, a spokesperson for the Center for Responsible Lending, has a message for lenders. “We thought bankruptcy was needed to say, If you don’t do it, somebody’s going to do it for you.”
The mortgage industry, opposes the new legislation. No surprise there. They claim they would have to ultimately raise fees and interest rates. Personally, I’d like to know how much higher they can raise rates. In my Loan Modification Company, we see people struggling with loans. Interest rates are as high as 13% and in some cases negative amortization is causing them to actually lose money each month. This, despite the fact they are paying the majority of their incomes toward interest.