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Bankruptcy Judges ok to discharge mortgage debt

Mortgage News > Bankruptcy Judges ok to discharge mortgage debt
Date: 01/28/2009    Bankruptcy Judges ok to discharge mortgage debt

Legislation was approved Tuesday by the House Judiciary Committee 21 to 15 providing bankruptcy judges with the power to forgive mortgage debt allowing homeowners to avoid foreclosure.

FHA loans will be taken under consideration for "cram-down mortgages"

Under the bill, profits obtained by a borrower through the selling of their home within 5 years of taking advantage of a "cramdown" must be shared with the lender.

Also included in the bill is a stipulation preventing borrowers who obtained their loans under fraudulent terms to participate in the "cram-down" program.

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