The Mortgage Bankruptcy Bill was recently signed off by U.S. House Judiciary which tries to help bankrupt homeowners keep their homes. According to this bill, terms of existing mortgages can be changed by bankruptcy courts to help homeowners.
This proposed legislation is only applicable for sub prime mortgages & other non traditional mortgage loans like optional payment & interest only mortgage loans. In addition these loans should have been taken after
Those who support the bill have figured out the number of homeowners who will get help because of the legislation will be around one-half million.
Through this legislation courts will be able to:
- Cancel excessive & most often secret fees charged by unfair lenders.
- To reflect actual value of the house, modify mortgage’s principal amount.
- Remove harsh prepayment penalties and
- Bring down very high interest rates on the mortgage.
