Countrywide Home Loans has made a concerted effort to tell everyone, including Congress, that they are working hard to modify mortgages for borrowers caught up in the sub-prime lending crisis, except maybe for their attorneys who are defending them in a lawsuit in New Hampshire, according to an article on MSNBC.
Attorneys for the California-based mortgage giant told a New Hampshire court in a filing seeking dismissal of a suit that alleges breach of good faith, fraud, negligence and misrepresentation, that modification offers are “only vague advertisements.”
That might explain why more than 860,000 homes were foreclosed on in 2008, and why most banks and their trade organizations oppose allowing bankruptcy judges to modify mortgage loans.
Congressional leaders are pushing to allow judges to modify interest rates, terms and balances of mortgages for homeowners in Chapter 13 bankruptcy.
Bankruptcy attorneys across the country have pushed for the change since the foreclosure crisis began in late 2007.
They point to the successful use of Chapter 12 bankruptcy and the modifications to farm loans that led bankers to negotiate with family farmers and slowed the rate of foreclosures in the 1980s. A Tennessee bankruptcy judge even wrote an opinion piece for the Daily Tennessean that outlined how he believed changes to Chapter 13 that would allow judges to modify first mortgages would help.
Bankruptcy law already allows judges to modify mortgage terms on business property or a second home in a Chapter 13 case. Why not allow homeowners the same option to stay in their first home?
