Citigroup and Bankrutcy Judges Join Forces to Save Homeowners from Foreclosure

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News came out today that may help many homeowners who are facing problems with their mortgage.  Letting your house go because the home is upside down and you need help start with my free report and if that only wets the appetite then move on to my free video series on Refinancing an Upside Down Mortgage

Democratic lawmakers reached an agreement with Citigroup Inc. on a plan to let bankruptcy judges alter loans in an effort to prevent homes from going into foreclosure. Other lenders are expected to follow suit.

Known as “cramdown,” the rewrite would let bankruptcy court judges erase some mortgage debt to help bankrupt homeowners better handle their payments, subject to strict conditions.

The legal reform would help “millions of families save their homes,” said senators Richard Durbin of Illinois, Charles Schumer of New York and Christopher Dodd of Connecticut.

Michigan Democratic Rep. John Conyers has introduced the mortgage bankruptcy measure in the House of Representatives.

Under the terms of the reform as agreed, only mortgages entered into prior to the date of enactment of the bill would be eligible for the treatment, the senators said.

Homeowners would have to certify that they have tried to contact their lender before filing for bankruptcy, they said.

Only major violations of the “Truth in Lending Act” would invalidate creditor claims on bankruptcy, they said.

Schumer said his office has contacted top bankers nationwide and some said they would be supportive.

Officials at other top banks — including Wells Fargo (WFC.N), Bank of America (BAC.N), SunTrust (STI.N) and JPMorgan Chase & Co (JPM.N) — were contacted by Reuters but had no comment.

This latest adjustment to Bankruptcy law will help homeowners avoid any possible foreclosure and allow for someone other than the bank to make adjustments to the toxic mortgages that have plagued homeowners facing foreclosure.

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