Riddell Law Group - Sarasota | Venice | Lakewood Ranch
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Riddell Law Group - Sarasota | Venice | Lakewood Ranch
Contact Our Law Office 941-366-1300
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Riddell Law Group - Sarasota | Venice | Lakewood Ranch
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HAMP is not working…

| Jul 30, 2015 | Uncategorized

Should congress reconsider legislation that would allow bankruptcy judges to cramdown first position purchase money mortgages on a Chapter 13 debtor’s primary residence?Months ago, I addressed the initiative known as the Durbin Amendment proposed in the last legislative session which was ultimately defeated. This initiative proposed an amendment to the bankruptcy code which would allow congress to enable bankruptcy judges to write down or “cramdown” a debtor’s principal residence purchase money mortgage to the current fair market value of the real estate.This is often referred to as judicial cramdown. This would allow for the purchase money mortgage in first position to be secured up to the current value of the real estate and the remaining balance of the mortgage obligation would be treated as a general unsecured debt through a debtor’s Chapter 13 plan. Unfortunately this initiative was defeated during the congressional session. However, as the foreclosure rates continue to rise while real estate values decline and government programs such as HAMP (Home Affordable Modification Program) over promise and under deliver there are murmurs of another push to revisit judicial cramdown in Chapter 13 bankruptcy.