Judges May Be Illegally Modifying Mortgages
May 3rd, 2011
These days, if you file bankruptcy you could end up with a modified mortgage if the judge is willing to do it. However, that new mortgage payment could go up in smoke since Congress considered, but never authorized, giving judges authority to “cram-down” mortgages in bankruptcy cases[1]. The Helping Families Save Their Homes Act of 2009 was intended, in part, to amend federal bankruptcy law so that judges could alter terms on mortgages in primary residences. However, the provision drew so much fire it was dropped from the bill. Historically bankruptcy judges have had the option of modifying mortgage terms on investment properties and vacation homes, but not primary residences.
According to research firm DBRS, however, judges have been modifying primary residence mortgages anyway, in some cases all the way down to the terms of the dropped provision – fair market value of the property with a reduced interest rate, an extended term, waived prepayment penalties and prohibition of adjustable rates. Despite the fact that this was never authorized, DBRS believes that the practice will spread as more people become aware of it and that as a result there will likely be an increase in personal bankruptcies in 2011.
Do you think that judges should be allowed to continue making these rulings?
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[1] http://www.dsnews.com/articles/mortgage-cram-downs-by-bankruptcy-judges-are-taking-place-dbrs-2011-05-02
May 3rd, 2011 at 6:13 AM
No, more illegal activity by activist judges.
May 3rd, 2011 at 7:15 AM
No modifications and no principle forgiveness. These same people have $2000 tv’s, new cars, vacations, etc. but they can’t pay their mortgage? To bad. The banks should take it in the shorts. They made bad loans, period the end. No one will bail me out. Now I can’t get a loan even though I have business making money, 818 credit score, cash on hand. The banks and these individuals should take the hit.
May 3rd, 2011 at 7:42 AM
Yes
May 3rd, 2011 at 12:31 PM
YES. I believe that everyones situation is different. I think that something needs to be done. I have been trying for three years to modify our mortage. My husband was in a hit and run which he missed alot of work and we fell behind in our house payment. So many lies told to us by WellsFargo. I have just hired our 2nd Attorney because first Attorney did nothing. We have made 5 or 6 attemps to do it ourself. One time we were approved(after I asked for Senator Bill Nelson for help) then we were lied to about making the payment. I made 1 payment and then no more because of a lie reguarding making the payment that a employee from the so called Presidents office of WellFargo said to us. Now we are trying again with the help of another attorney. I can not begin to tell you how much money we have spent on faxes, overnighting documents WellsFargo requested. Not to mention the Attorneys. We are not asking for our mortage to be disolved. We are just asking that the payment be made affordable so we can stay in our home. I am on disability. My bathroon is set up to acomodate my needs. It was not my husbands fault that he was injured that day in 2007. He works everyday with a perminent injury. He was never paid any monies due to his injury from the Post Office like alot of other employees are paid when they have accident and are injured. All we want is to keep our home and have some peace and stability in our lives again. Thank you. Linda
May 3rd, 2011 at 2:26 PM
Yes, since the US Congress has considered, and Obama reconsidered or mentioned it in HAMP why not let the Federal Judges finishing it with Ch 13 filing as an alternative along with or without repayment plan. After all if the debtor/homeowner will not able to finish the loan mod payments, or confirmed repayments plan the lender stil has rights to foreclose the defaulted property any way.
May 3rd, 2011 at 2:48 PM
yes Let the banks suffer this time , they were greedy and created this mess, they were then bailed out by the feds, they have been caught in a web of deceit [forging documents etc. . they tell families you cannot get any help , they stall when asked to process short sales . the list goes on and on. The banks need to know how it feels . If they would work with homeowners this wouldn’t be necessary.
May 5th, 2011 at 10:00 AM
Yes, the judges should be allowed to step in becasue the banks are not interested in modifying when it is proven that they make more money by foreclosing. Wells farto is the arm pit of the universe in terms of their lies, bigger lies and even larger lies that they tell us. They make you jump through hoops for no reason and they are laughing in our faces. THey should be made to see how we all feel and not everyone in trouble has big screen tv’s and fancy cars. I know I don’t and I don’t even have cable, haven’t bought new clothes in 3 years, had no insurance for 4 years, the list goes on and the banks refuse to modify my loan after 2 years of trying. They say I don’t earn enough?
May 5th, 2011 at 10:20 AM
Banks use the court system and the unsigned mortgage note to collect and foreclose on homeowners. Lenders enjoyed Billions of dollars of bailout money for “bad loans”. Wall street made trillions on these loans as well. Why can’t the homeowner use the court system to fight. If TILA was violated (have 3 years on a refinance) then file Ch 13, and the loan COULD become unsecured. Plenty of info on this online. In addition. Banks who foreclosed on folks, who are NOT paying to maintain empty house ( mostly in urban areas) and are facing fines from City departments are now starting to claim that they do NOT own the note.
May 5th, 2011 at 10:41 AM
Bankruptcy judges should not use a cram down in bankruptcy court without legal authority (legislation or current case law upon which to rely). As to existing BK orders the parties’ do have the right to appeal(BAP,District Court, Circuit Court of Appeals etc.) What all judges should be doing is enforcing the fraud, forgery, perjury and other violations, if proven, to the fullest extent-i.e. fines PLUS Jail/Prison time if applicable. Fines alone, even at the 100 million dollar+ level on a “without admitting or denying any wrongdoing” basis are not even a slap on the wrist for individuals/entities with the amount of “wealth” these individuals/entities have accumulated. Perhaps a RICO forfeiture action might send them a message that they too must be held accountable. If not, this mess will continue to be the norm for now and the foreseeable future.
May 5th, 2011 at 11:20 AM
Yes let the banks take some of the risk for the loans they awarded to people.. Its not fare that the banks are bailed out and the homeowner gets no help at all and congress is to blame for this.. But then they are no losing their homes now are they>??
May 5th, 2011 at 2:27 PM
Yes. Absolutely. Since our politicians are doing nothing I am glad the Judges are making the decisions.
May 5th, 2011 at 7:40 PM
I agree with the Judge even as a guy who buys defaulted Mortgages. I understand her. The banks took advantage of the country and still are.
May 5th, 2011 at 11:03 PM
Let’s see, 1000′s of falsified beyond ridiculous mortgage applications including falsifications that wouldn’t have helped the homeowner get the loan in the 1st. place, non transference of the notes and mortgages into the trusts (that were still sold to investors as if they had been), trusts crammed with “crappy loans” that were almost guaranteed to fail, and then insurance bought on those very same trusts by the entity’s who created them in the first place… resulting in over 10,000,000 people being kicked out of their homes with many losing their entire life savings (and retirement) an all accomplished through massive and absolutely proven without a shadow of a doubt fraud & forgeries (in at the very least 100′s of thousands of cases) with many being sanctified by unwitting and now red faced and embarrassed Judges Nationwide… and you think it’s even a question if the judges should rule against the Lenders?
Have you seen the tent cities yet?
Have you any idea how hard (spelled impossible) to find a job when you have no address?
Have you any idea at all what would happen to the average citizen if he was caught doin just any one of these criminal acts?
We should hang these criminals… shut down these to big to fail criminal enterprises and create laws and a Govt. with gonads enough to enforce them to the letter.
This Country has been turned into a partial 3rd world nation by these scumbag criminals.
Let them pay what it costs to make everybody whole again with their outrageous bonuses, their mansions, Ferrari’s, Rolex’s and the rest of their stolen wealth. And when thats all gone, with their organs.
Let me eat McDonalds?
I say Off With Their Heads!!!
The French got that one right.
May 6th, 2011 at 8:23 AM
Yes the banks should have to readjust terms of the loans to reflect real value of the home. We were preyed upon by Bank, given high interest rate because of self-employment,falsely high estimate of home value, changed fixed rate to ARM after head-on collision(under-insured kid on OUR side of the road) forced us both out of work. And no documentation to prove ownership of note. My question is why the whole mortgage industry has not been razed and forced to do away with system that charges outrageous interest that would be illegal in a sane world! I agree… Off with their greedy Heads!