New NC Mortgage Rules to Reduce Foreclosures Approved by Rules Review Commission

The North Carolina Office of the Commissioner of Banks (NCCOB) announced that the mortgage rules adopted in March 2010 to reduce foreclosures have been approved by the Rules Review Commission and will take effect for licensed mortgage servicers on June 1, 2010.

NCCOB first proposed the rules in November 2009 due to its concerns that homeowners often face foreclosure when alternative solutions exist that would benefit both the homeowner and the mortgage company. The rules were adopted by the Commissioner and approved by the North Carolina State Banking Commission on March 17, and the Rules Review Commission approved these rules on April 16th at its regularly scheduled meeting.

NCCOB says new requirements contained in the new rules will improve opportunities for homeowners to avoid foreclosure:

• Require a mortgage servicer to stop foreclosure efforts pending the consideration of a request by the homeowner for assistance (Rule 703). Currently, most mortgage servicers continue to advance foreclosure proceedings, even when they are in the process of modifying the delinquent loan. This adds significant costs and confusion for homeowners trying to work-out their loan. Given the unprecedented number of homeowners requesting assistance, some servicers have struggled to qualify them for assistance in a timely fashion, which has led to some losing their home when they would have been eligible for existing foreclosure prevention programs.

• Require a mortgage servicer to respond promptly and clearly to homeowner requests for assistance (Rule 702). As noted above, mortgage servicers have struggled to respond promptly to borrowers with concise and needed information regarding their qualification for foreclosure prevention assistance. Homeowner frustration caused by inefficiencies in the loan modification process, such as poor communication, the need to send documents multiple times, and repeated calls to check on the status of the request, have resulted in unnecessary foreclosures. Rule 702 provides a timeline for communications to homeowners and specifies the required content of communications to increase the reliability, transparency, and efficiency of the foreclosure prevention process.

The final rules apply to non-bank mortgage servicers regulated by NCCOB under the NC SAFE Mortgage Licensing Act and do not apply to bank servicers. NCCOB hopes that bank servicers with large numbers of delinquent mortgage loans will consider adopting similar procedures to reduce the potential of unnecessary foreclosures.

State Home Foreclosure Prevention Project assists 4,000th homeowner in avoiding foreclosure

In addition to the rules, NCCOB has been working with its partners to help homeowners fight foreclosure through the State Home Foreclosure Prevention Project (SHFPP). To date, SHFPP has helped over 4,000 North Carolina homeowners avoid foreclosure. In addition, more than 10,000 other homeowners have met with non-profit housing counselors to get free advice and assistance in dealing with their finances and mortgage problems.

NCCOB estimates the impact of avoiding foreclosures on these homes has prevented almost $350 million in neighboring property value declines and financial system losses. Utilizing 34 local non-profit counseling agencies across the state and one national non-profit phone counseling agency, the program has prevented foreclosures in all 100 counties in North Carolina. SHFPP involves a network of State agencies, HUD-certified counselors, legal service providers and non-profit organizations working together to help homeowners avoid foreclosure.

Homeowners seeking help from SHFPP can receive free assistance over the phone by calling toll-free, 1-866-234-4857 (8:00 a.m.-9:00 p.m., Mon.-Fri.; 8:00 a.m.-5:00 p.m., Sat.). In addition, homeowners may wish to meet with a local counselor directly. A full list of these counselors and additional information can be found at

The final mortgage rules are available at

NCCOB regulates state-chartered banks, thrifts, savings and loans, trust companies, and more than 600 mortgage lenders/servicers/brokers and 6,000 mortgage loan originators, as well as numerous consumer finance companies, check-cashers, and other financial services. NCCOB is funded by industry fees and assessments and not taxpayer dollars.

NC Homeowners have two new regulations to help them fight foreclosure

North Carolina state regulators have ruled that once a homeowner asks for a loan modification, any foreclosure actions must be halted. Previously, lenders pursued foreclosures at the same time they were working with homeowners to make their loan payments more manageable. That puts homeowners up against the clock.

”We believe that the mortgage industry has failed to prevent as many foreclosures as they could have, and that there are some significant flaws in the system," said Mark Pearce, North Carolina Deputy Commissioner of Banks.  "We think the new rules that we adopted … will help homeowners have a better chance of avoiding foreclosure when they have the ability to stay in the home."

The second new regulation requires mortgage servicers to respond clearly and promptly when homeowners ask for mortgage assistance. Often times, a breakdown in communication can lead to foreclosure.

The regulations take effect June 1, 2010. They apply to mortgage brokers and other lenders that account for about three-quarters of the mortgages in the State of North Carolina. The rules do not apply to banks or savings and loans.

Community banks and other state-chartered banks haven’t been much of a problem on the foreclosure front, Pearce said. The commission doesn’t have authority over federally chartered banks such as Bank of America and Wells Fargo.

The regulations were approved by the North Carolina Banking Commission and Joe Smith, the NC Commissioner of Banks.

NC residents now have new protections from foreclosure and unfair debt collectors

North Carolina Attorney General Cooper backed new law to save homes and communities, stop harassment from debt buyers

North Carolinians who face the loss of their homes through foreclosure or harassment from unfair debt collectors now have new protections under the law, according to NC Attorney General Roy Cooper.

The Consumer Economic Protection Act of 2009 (CEPA), which Cooper worked with state legislators to enact, will ensure that homeowners and their mortgage lenders have the chance to voluntarily resolve foreclosures. The new law, which started October 1, 2009, will also protect consumers from an aggressive new breed of debt collectors called debt buyers.

“Losing a home should be a last resort because foreclosures hurt the whole economy,” Cooper said. “With this new law, homeowners and lenders get more time to rework mortgages so that more families can afford to stay in their homes.”

Court records show that nearly 40,000 North Carolina homes have gone into foreclosure so far in 2009. According to the Center for Responsible Lending, more than 2.2 million North Carolina homeowners will see their property values decline over the next three years because of foreclosures in their neighborhood. Foreclosures hurt lenders as well, costing them an estimated 40 percent of the loan value.

Not all foreclosures can be prevented, but some homeowners are able to work out repayment plans and loan modifications with their mortgage lender or servicer. CEPA requires lenders to explain in detail their efforts to resolve delinquent home loans without resorting to foreclosure. Clerks of Court presiding over a foreclosure hearing now have the authority to ask what steps have been taken to prevent foreclosure and to continue the hearing for up to 60 days to allow homeowners and lenders more time to negotiate a solution.

To give homeowners a fair opportunity to appeal foreclosure orders, CEPA also standardizes the amount of bond required at one percent of the balance due on the loan. Previously, some homeowners were asked to put up a bond worth the entire value of the loan balance in order to be able to appeal their foreclosure.

For free counseling on options to avoid foreclosure, North Carolina homeowners can call a toll-free hotline set up by the NC Commissioner of Banks’ Office. The hotline, 1-866-234-4857, is available from 8:00 AM to 9:00 PM Monday through Friday, and from 8:00 AM to 5:00 PM on Saturdays.

The new law also protects North Carolina consumers from unfair debt collection practices by debt buyers, a new type of debt collector that pursues old debts even when the debts have already been settled or paid.

For example, a debt buyer sued a 65-year-old North Carolina woman, producing billing statements supposedly sent to her at an address in Greensboro. But the consumer, who has lived in the same house for more than 30 years, had never lived in Greensboro.

In another case, a 73-year-old North Carolinian received daily calls from a debt buyer, telling her that she would never be able to buy anything if she didn’t pay them. The account the debt buyer was trying to collect was opened in Ohio, and the woman had never set foot in Ohio. A criminal had stolen her identity years before and been prosecuted and convicted for it, but the debt buyer still filed suit against her over the debt that wasn’t hers.

Under the new law, debt buyers must now prove that they have the right to enforce the debt and be able to verify the amount owed. Debt buyers are also prohibited from filing or threatening to file suit when barred by the statute of limitations.

“Whether you’re a senior on a fixed income or a working family trying to make ends meet, the last thing you need is someone hounding you to pay a debt that you don’t really owe,” Cooper said.

A provision in the original legislation that would have clarified the Attorney General’s Office’s enforcement over investment scams involving securities will be pursued in the next legislative session.

Consumer tips on home loans, debt collectors and many other topics are available from the Attorney General’s Consumer Protection Division at

NC Governor Signs Bill to Protect Consumers from Home Foreclosures

Senate Bill 974 will save North Carolina communities and protect against unfair debt collectors

RALEIGH – Last week, North Carolina Governor Bev Perdue signed Senate Bill 974, The Consumer Economic Protection Act Of 2009 (CEPA),which will help homeowners facing foreclosure, preserve communities, and protect consumers from unfair debt collectors.

“When a home is foreclosed — it’s bad for our families, it’s bad for our communities, it’s bad for our businesses and it’s bad for North Carolina,” said Gov. Perdue. “This bill makes it easier for homeowners to work out a deal with their lenders and avoid foreclosure.”

Court records show that nearly 40,000 North Carolina homes have gone into foreclosure so far in 2009. According to the Center for Responsible Lending, more than 2.2 million North Carolina homeowners will see their property values decline over the next three years because of foreclosures in their neighborhood. Foreclosures hurt lenders as well, costing them an estimated 40 percent of the loan value.

“Everybody loses when a foreclosure happens,” NC Attorney General Roy Cooper said. “Giving homeowners and lenders more time to find solutions can save homes, neighborhoods and money.”

Not all foreclosures can be prevented, but some homeowners are able to work out repayment plans and loan modifications with their mortgage lender or servicer. The bill, sponsored by Senator Tony Rand and Representatives Deborah Ross, Larry Hall, Grier Martin, and Dan Blue, will ensure that homeowners and their mortgage lenders have the chance to voluntarily resolve foreclosures.

SB 974 empowers the Clerk of Court presiding over a foreclosure hearing to ask what steps have been taken to prevent foreclosure and to continue the hearing for up to 60 days to allow homeowners and lenders more time to negotiate a solution.

To give homeowners a fair opportunity to appeal foreclosure orders, the bill also standardizes the amount of bond required at one percent of the balance due on the loan. Previously, some homeowners were asked to put up a bond worth the entire value of the loan balance in order to be able to appeal their foreclosure.

The bill also protects North Carolina consumers from unfair debt collection practices by debt buyers, a new breed of debt collectors that purchase old debts and aggressively file lawsuits to collect on them. In some cases, the debts have already been settled or paid. Debt buyers must now prove that they have the right to enforce the debt and be able to verify the amount owed. The new law also prohibits debt buyers from filing or threatening to file suit when barred by the statute of limitations.

Consumer tips on home loans, debt collectors and many other topics are available from the Attorney General’s Consumer Protection Division at


Banks are quietly changing the terms of millions of credit card accounts as they brace for a tough new law that will limit rate hikes, according to a recent commentary in the Los Angeles Times.

The Credit Card Accountability, Responsibility and Disclosure Act (P.L. 111-24), which President Obama signed in May, will be phased in between August and February. The law would restrict interest rate increases unless a credit card has a variable rate.

Two major lenders have already switched their cards with fixed rates to variable rates. Bank of America has notified some customers that "as a result of a change in our business practices, your annual percentage rate will use a variable rate formula based on the U.S. prime rate."

JPMorgan Chase is also swapping variable rates for cardholders’ fixed rates. Representatives of Wells Fargo, Citibank and American Express said that each company had no plans at the moment to change fixed-rate accounts to variable accounts, but didn’t rule it out down the road.

In response to the news about credit card companies changing their practices, Senate Banking Chairman Christopher Dodd (D-Conn.) wrote to federal banking regulators urging them to warn credit card issuers that they will be accountable for any unfair interest rate increases on consumers prior to new legislation going into effect Feb. 22.

Dodd asked Federal Reserve Chairman Bernanke and four other regulators to prevent issuers from raising interest rates on existing balances without justification. Dodd wrote that the new law requires that all interest rate increases that took place this year be subject to a mandatory six-month review by regulators. "I ask you to immediately notify all credit card companies under your respective jurisdictions that they will be held accountable for all interest rate increases during this time period and will be subject to the review requirement once it takes effect," Dodd wrote.

Obama Set to Approve New Rules for Credit Cards

New rules for the credit card industry that are designed to protect consumers from surprise charges, such as over-the-limit fees and costs for paying a bill by phone, are part of a bill President Obama is set to sign into law today, the Associated Press reported today. 

Obama plans to sign an overhaul of credit card regulations that he blames in part for the economic downturn.

Despite opposition from financial companies, the bill cleared Congress with broad support.

The new rules, which would go into effect in nine months, would prohibit credit card companies from giving cards to people under 21 unless they can prove they have the means to pay the debt or a parent or guardian co-signs for the card.

Under the bill, a customer would have to be more than 60 days behind on a payment before seeing a rate increase on an existing balance. Even then, the lender would be required to restore the previous, lower rate if the cardholder pays the minimum balance on time for six months.

Consumers also would have to receive 45 days’ notice and an explanation before their interest rates increased.

Congress Passes Anti-Foreclosure Bill

Congress yesterday sent the president legislation that encourages banks to spare homeowners from foreclosure, after the industry helped scuttle a tougher measure that would have forced lenders to reduce monthly payments of owners in bankruptcy, the Associated Press reported yesterday.

The House voted 367-54 to pass the Helping Families Save Their Homes Act. The Senate had previously voted 91-5 in favor of the bill and approved the final version by unanimous consent.

The bill would expand an existing $300 billion program that encourages lenders to write down an individual’s mortgage if the homeowner agrees to pay an insurance premium.

The program, set to expire in 2011, would swap out a homeowner’s high-interest rate for a 30-year fixed loan backed by the Federal Housing Administration.

In addition, the bill extends through 2013 an increase in deposit insurance by the FDIC from $100,000 to $250,000.

A Fight Rages Over a Tool Called “Cram Down”

by Matt Renner, Truthout:

Washington, DC – A fight on Capitol Hill rages over a tool called "cram down." Proponents say the proposal is essential to fixing the foreclosure crisis and empowering homeowners to negotiate with the banks that hold their mortgages. Opponents say it will make lending riskier and raise interest rates. The battle lines are drawn, pitting Democrats against Democrats.

At the heart of the meltdown on Wall Street are piles and piles of mortgage loans for houses, which have been losing value for years as the housing bubble deflates. Many of these mortgages are "underwater," meaning the house is worth less than the amount owed on the mortgage. Many of these loans are the notorious Adjustable Rate Mortgages, which began at a lower interest rate and has now increased, driving up monthly payments. At the same time, millions of people across the country have lost their jobs or had their wages cut as a result of the contracting economy.

The situation has led to record foreclosure rates – almost 700,000 this year, or one every 13 seconds, according to the consumer group Center for Responsible Lending (CRL).

Economists and consumer advocates say that the foreclosure crisis is the root of the banking crisis and must be fixed in order to save the economy. But there is a collective action problem – renegotiating mortgages posses risks to the banks that own them and the middlemen (known as loan servicers), who manage the loans. The borrowers are at the mercy of the lenders and have no leverage to force them to negotiate.

This is where Congress comes in. Under current law, bankruptcy judges do not have the power to change the terms of a mortgage on a consumer’s primary residence during bankruptcy proceedings. With the support of the Obama administration, Democrats in Congress have introduced the Helping Families Save Their Homes in Bankruptcy Act of 2009. One provision of the act would grant bankruptcy judges the power to alter troubled mortgages. This proposal has been a priority for powerful Democrats and has been near the top of their legislative agenda since the beginning of the year.

The CRL has been monitoring national foreclosure rates and policy plans to address the problem. In an interview with Truthout, CRL spokesperson Kathleen Day said the "cram down" provision is a vital piece of the overall solution and compliments the incentives offered to lenders, loan servicers and homeowners under the Obama administration’s homeowner rescue package.

A plan passed under the Bush administration meant to help people refinance, known as HOPE for Homeowners, did not include the threat of "cram down," and was also missing key incentives for the lenders and loan servicers. The program allocated $300 billion and was supposed to help up to 400,000 people avoid foreclosure, according to the Congressional Budget Office.

More than six months later, only one homeowner has successfully made it through the entire process and refinanced their mortgage under the program, according to the Federal Housing Administration.

"Bankruptcy is the stick. Bankruptcy is the only leverage consumers have. They would be able to say to the lender ‘look, either you work with me or a judge is going to do it down the line,’" Day said, adding "What the industry is going bananas over is giving bankruptcy judges the ability to modify a mortgage on a person’s primary residence the way they can currently modify every other kind of contract. It’s ridiculous, a judge can’t touch a mortgage on a person’s primary residence but they can modify [a loan] on a person’s vacation home or their yacht or anything else."

"Most Americans today, in trouble, are desperately trying to hold onto their primary residence," said a proponent of the "cram down" power, Senate Banking Committee Chairman Chris Dodd (D-Connecticut) in January, adding "The notion here is to create the environment for negotiation so that those who are holding the mortgages will not wait until bankruptcy, that they’ll sit down ahead of time with the prospects that they’re going to have this mortgage rewritten in bankruptcy and say, ‘Let’s see if we can do it before they go to bankruptcy court.’ It creates a more positive negotiating environment."

Not all Democrats agree with Senator Dodd. A handful of self-labeled "moderate" Democrats stand in the way of giving judges the power to reduce or "cram down" mortgages during bankruptcy.

According to multiple press reports, the Democratic opposition to the bankruptcy power know as "cram down," has been led by Sen. Evan Bayh (D-Indiana). Indiana has the 13th highest foreclosure rate in the country, according to Realty Trac.

Senator Bayh currently leads a group of 16 so-called "moderate" Democrats, who have become increasingly powerful as they represent the deciding votes in the Senate.

The 16-member coalition known as the Moderate Dems Working Group was announced in a press release on March 18.

At this time, it is unclear where the members of the Moderate Dems Working Group stand on the "cram down" legislation. Only three of the 16 senators returned calls inquiring about their stance on granting judges the power to adjust mortgages in bankruptcy.

The three responses were evenly split. A spokesperson for Sen. Ben Nelson said that he opposed the provision because it would raise interest rates on other borrowers and further destabilize the mortgage industry. A spokesperson for Sen. Kay Hagan (D-North Carolina) said that Senator Hagan "had reservations about the bill and is currently considering changes and discussing it with her colleagues." A spokesperson for Sen. Bill Nelson (D-Florida) said that Senator Nelson has supported "cram down" in the past and continues to support it in some form.

The senators from the Moderate Dems Working Group who failed to return multiple phone calls inquiring about their stance on the bankruptcy provision were: Evan Bayh (D-Indiana), Tom Carper (D-Delaware), Blanch Lincoln (D-Arkansas), Herb Kohl (D-Wisconsin), Mary Landrieu (D-Louisiana), Joe Lieberman (I-Connecticut), Claire McCaskill (D-Missouri), Mark Pryor (D-Arkansas), Jeanne Shaheen (D-New Hampshire), Mark Warner (D-Virginia), Mark Begich (D-Alaska), Mark Udall (D-Colorado) and Michael Bennet (D-Colorado).

Corporate special interest groups have been lobbying aggressively against the "cram down" legislation. The Mortgage Bankers Association and banks like JP Morgan Chase, Bank of America, and others have initiated an all-out effort to prevent it. Industry representatives argue that the bankruptcy reform legislation would further destabilize the already fragile mortgage market by adding unpredictable risks and making the value of mortgaged-backed securities harder to establish.

The lobbying effort succeeded in delaying consideration of the legislation and may have derailed it entirely. Jim Manley, Senate majority leader Harry Reid’s spokesman, originally said that the bill would be brought up for a vote before the April recess. After a handful of Democrats jumped ship in March, Manley revised his estimate, saying that the bill would be delayed until after the recess.

It has been reported that the Democrats do not have 60 votes in favor of the "cram down" provision. However, what is often left out is the fact that Democrats only need 60 votes to break a Republican filibuster. The Democrats need a simple majority to pass the bill and could bring the bill to the floor for a vote and challenge Republicans to stand and filibuster, a move that would be dangerous in the current political climate where republicans have been criticized for being the party of "no."

Congress is scheduled to reconvene on Monday, April 20.

Mortgage Bankers Coming to the Goat Man for Wool!

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.

NACBA Statement on Obama Foreclosure Plan


WASHINGTON, D.C. — The following statement was issued on behalf of the 3,500-member National Association of Consumer Bankruptcy Attorneys (NACBA) by bankruptcy attorney and NACBA president Carey Ebert of Fort Worth, TX:

“At a time when an estimated 6,600 American families are losing their homes to foreclosure every day, we welcome the Obama Administration’s support for changes to existing bankruptcy laws that will allow for judicial modification of home mortgages. The Obama Administration is the latest major player in this national debate to recognize the fact that judicial modification must be part of the solution to today’s worsening home mortgage foreclosure crisis.

It is painfully clear that the continuing, and indeed worsening, foreclosure crisis is perhaps the single largest impediment to this country’s economic recovery. We call on the banking industry to impose a moratorium on foreclosures until the Obama housing plan, including and in particular bankruptcy reform, has been fully implemented.

Just as important as forbearance by the banking industry is the need for action by Congress NOW. We agree with consumer advocates and others who say that Congress and the Administration should move with the same sense of urgency on curtailing this threat as they did with the economic recovery bill just signed into law.

Ever since the mortgage foreclosure crisis erupted into the public view in 2007, a broad array of consumer, civil rights, housing, community, labor and other organizations, as well as economists, have advocated judicial mortgage modification relief as an effective approach to stemming the growing tide of foreclosures – a solution that, unlike every other solution being considered in Washington, comes at absolutely NO cost to U.S. taxpayers. This is one solution we know will work. The infrastructure already is in place. It is something the bankruptcy courts do every day with other assets. And, estimates are that this solution alone could cut foreclosures by at least 20 percent.

Data released by NACBA and others make it very clear that the foreclosure crisis will not be resolved through top-down voluntary efforts on the part of the financial services industry alone, no matter how many carrots or incentives are given. Judicial mortgage modification cuts through the impediments to sustainable mortgages. Courts must be empowered to implement economically rational loan modifications where the parties are unwilling or unable to do so on their own.”


To email your Congressional representatives (it only takes about 30 seconds):

To phone your Congressional representatives:

TOLL FREE LINE: 877.354.4958


The National Association of Consumer Bankruptcy Attorneys ( is the only national organization dedicated to serving the needs of consumer bankruptcy attorneys and protecting the rights of consumer debtors in bankruptcy. Formed in 1992, NACBA now has more than 3,500 members located in all 50 states and Puerto Rico.