March 20, 2008

• Will Congress Empower Bankruptcy Judges to Modify the Terms of Mortgage Loans?

  Will Congress give bankruptcy judges the power to modify the terms of mortgage loans?  Scripps News reports that several bills have been introduced in Congress to do just that.  These bills would limit relief to homeowners who didn't earn enough income to afford mortgage payments, had a subprime or nontraditional loan or faced imminent foreclosure.  Bankruptcy judges would be required to set commercially reasonable interest rates on modified mortgages and not reduce loan balances to less than the market value of the property. (…)