CAWJ

Solving the Housing Crisis in Bankruptcy Court

OK, Richard and ArnoldCountry. No legal fees in Bankruptcy? Oh yeah, and there's also a pot of gold at the end of a rainbow


On Dec 31 10:38 AM ArnoldCountry wrote:

> Interesting piece but contains a ton of fear and speculation based
> on non-fact. Giving the courts that type of power will solve the
> problem pretty fast. Right now, servicers cannot modify loans because
> their pooling and servicing agreements have huge limitations and
> if they go outside of those limitations, they are required to buy
> back the loans from the pool. However, if they can show the consumer
> threatened bankruptcy and their modification gave them the same result
> but at lower cost (no legal fees in bankruptcy), the investor pool
> would have a tough time getting them to buy back the loans.
>
> I think the judges getting the authority will provide just the incentive
> lenders need to properly modify loans. It will have the effect of
> curtailing foreclosures, reducing the inventory of homes, and getting
> this housing mess back onto the road of recovery.
>
> Will there be some big losses, you bet, but they already took place,
> on paper. Rates will not go through the roof, instead, they will
> provide stable loan products with qualifying borrowers who will give
> stability to a marketplace that has performed extremely well for
> decades instead of hybrid products and liar loans which tanked the
> market in just a few short years.
>
> This does not even require a taxpayer bailout, it passes on the loss
> to where it belongs, the lender who controlled the gold and the rules.
> Yes, borrowers are wrong too but none of those loans would have ever
> been available unless the rules had been changed, which the borrower
> had no control over the rules.
>
> As republican as I am... this democrat proposal for once is actually
> right on the money.