Bankruptcy Mortgage Modifications
By O. Max Gardner III
Last Thursday, the U.S. House of Representatives passed by an overwhelming majority (234 to 191) the Helping Families Save Their Homes Act of 2009 (HR 1106). The Bill was co-sponsored by our own NC Representative Brad Miller and is strongly supported by the North Carolina Center for Responsible Lending and the North Carolina State Employees Credit Union. It is also supported by CitiGroup, the largest mortgage lender in America.
This Act will allow Bankruptcy Judges in limited cases to modify first mortgage loans down to the current value of the home, to change the terms of the note, and to adjust the interest rate so as to make the mortgage payment both affordable and sustainable. The Bill now goes to the Senate and is strongly supported by our President, Barack Obama.
President Obama is taking aggressive actions on many fronts to deal with the massive foreclosure crisis that threatens every single American family. In fact, the current financial crisis is so bad that we are only a few steps away from a Second Great Depression.
Every day, in America, more than 6,600 families are losing their homes to foreclosure. We will not get to the end of the current financial crisis until we solve the foreclosure problem. This Bill is the first step toward such a resolution.
And, the hundreds of thousands of vacant homes are lowering the values of every home in every county, creating new venues for crime and other illegal activities, and imposing severe financial burdens on every city, town and county in the land. The Bankruptcy Modification Act would allow at least 1 million Americans to save their homes in the next year. The current foreclosure crisis has already erased more than $2.4 trillion dollars in home equity for all American homeowners, not just those in foreclosure. This is you and me folks. This is our money. This was our equity. We must act to stop the bleeding before the patient dies!
The Mortgage Bankers of America, who have received Billions and Billions of dollars in Federal taxpayer assistance, are pulling out all stops to defeat this Bill in the Senate. It seems ironic that they are using our tax dollars to defeat legislation that would benefit us. But, that is exactly what they are doing.
You see, the Mortgage Bankers know that this legislation is essential to force them to implement the voluntary mortgage modification programs now being offered by the Obama Administration. As President Obama said, the Bankruptcy Bill is the “stick” to force the mortgage bankers and mortgage servicers to eat the carrots we have offered them. And, trust me, they will not eat the “carrots” unless we have the sticks to force feed them! The Congressional Budget Office has estimated that the Bill will not substantially increase the number of new bankruptcy cases but in fact will save the Government more than 26 million dollars.
I have been a consumer bankruptcy attorney in Shelby for 35 years and during this time I have sued virtually thousands of mortgage companies and mortgage servicers. I can state without any reservation or hesitation that the only thing these “Bankers” understand is “legal leverage.” We need this Bankruptcy Mortgage Modification Bill to give us that leverage to negotiate voluntary modifications without having to file for bankruptcy relief. This Bill will not impose any costs or fees on the U.S. Taxpayers but will make those pay that created this mess in the first place.
After taking Billions of our hard-earned tax dollars, it seems absurd that the Bankers are now “crying” to the Senate that this Bill should be defeated because it will help the consumer homeowners and might cost them a few bucks! Please, give me a break. As our late Bankruptcy Judge, Marvin R. Wooten, would say, I think the US Senate should tell the Mortgage Bankers: “Gentlemen, we are very sorry but we are not going to follow your wishes because you have come to the goat man for wool.”
This Bill is coming up for a vote in the Senate this week. So, act now. Call Senator Kay Hagan (202-224-6342) and Senator Richard Burr (202-224-3154) today and urge them to vote yes for Helping Families Save Their Homes Act of 2009. And, tell them that the Bankers have come to the Goat Man for Wool!
O. Max Gardner III
O. Max Gardner III is the grandson of former N.C. Governor, Undersecretary of the US Treasury, and Ambassador to Great Britain, O. Max Gardner. His Great Uncle, Clyde R. Hoey, was also Governor of N.C. and a member of the US Senate for almost 15 years. Max and his nephew, William S. Gardner, operate a consumer bankruptcy law practice in Shelby, North Carolina, under the name of the Law Offices of O. Max Gardner III, PLLC.