Today the House approved a bill (234-191) that would give bankruptcy judged authority to dictate, I mean change, the terms of the loan for home owners that are under water or upside down on their mortgages.

Simply stated, it means the borrower owes more on his home than what the current market value of the home is.

Bankruptcy judges will have the ability (assuming it passes the Senate) to wipe out the portion of the debt that is under water. For instance, if John Smith took out a 200,000 mortgage to by his home in 2005, but current market conditions now dictate that the homes value is now 140,000 the judge can adjust the mortgage, payments and interest, to reflect the current market value of 140,000.

First let me say to the 92% of Americans that pay their mortgages on time and bought homes they could afford, sorry suckers you should have have purchased bigger homes in more affluent areas.

This is wrong on so many levels I can hardly determine where to begin. First and foremost judges are just that…judges. They are not accountants, bankers or realtors. The banks that hold these mortgages can’t not realize these losses.

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Technorati Tags: Foreclosure, governement bailout, Mortgage

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