Tuesday, January 27, 2009

House Judiciary Committee Approves Chapter 13 Bankruptcy Mortgage Modification Bill

It was announced late today that the House Judiciary Committee approved an amended version of H.R. 200 (the "Helping Families Save their Homes in Bankruptcy Act of 2009") which would permit bankruptcy courts to modify mortgages on principal residences in Chapter 13 bankruptcy. The bill will now move to the full House where leaders hope to move the bill quickly.

Amendments to the bill were adopted to exempt FHA and VA loans from modification. A provision was also added to provide for a measure (decreasing with each year) of shared subsequent increase in value with modified mortgage lenders if the home is sold before the Chapter 13 case is discharged.
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