Senator Dick Durbin (D, IL) introduced S. 61, the " Helping Families Save Their Homes in Bankruptcy Act " to congress this week. Other congressman such as Rep. John Conyers (D, MI), chairman of the House Judiciary Committee and Rep. Brad Miller (D, NC) will also introduce legislation to congress supporting loan modification in bankruptcy early this year.
With an estimated 8-10 million additional foreclosures predicted in the next four years, legislators are desperately searching for feasible and sustainable systems that will stem the tide of foreclosures. One tactic being used is attaching bankruptcy reform legislation allowing mortgage loan modifications to any new economic recovery plans being drafted by Congress and the new Obama administration. Supporters of bankruptcy reform are gaining allies in all sectors, including 23 state attorney generals who sent a letter to congress personally endorsing mortgage loan modification in bankruptcy.
The time to act against the foreclosure crisis is now. Rising foreclosures are affecting every area of the economy and threaten to bankrupt many businesses and financial institutions. Individuals who are facing financial difficulties and even those who are financially sound need to reach out to congress and let them know that they support bankruptcy reform that allows mortgage loan modification. Also, congress needs to make sure that any loan modification is an improvement on existing loans not a simply a change for homeowners facing foreclosures. We want to stop the foreclosures facing homeowners not simply delay them by replacing one bad loan with another.