Archive for August, 2015

Why are we protecting home lenders?

August 21, 2015

The more I research the provision of §1321(b)(2) in the Bankruptcy code that prohibits modification of mortgages on primary homes, the more I think it should be changed.  The justification that is keeps the supply of money for home loans available seems to me to be part of the problem.  Lenders have no incentive to really know what the value of the homes they are lending on because they are protected.   This little know part of the law played a big part in the housing bubble, but it is getting almost no attention.  If you want to clean up the foreclosure crises in a hurry and prevent another one from coming along, then changing this provision should  be item one.

August 12, 2015

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Just getting back into this now that the posting is a bit easier.  It has been 18 years since I last had a Chapter 11 case in the office. I have two going right now.  Motions under §506 have not changed all that much.  They are still a powerful tool and can be very helpful for debtors.  In my next few posts, I hope to look at some of the issues with this type of motion and how debtors can use them to write down secured debt or to divide claims in to secured and unsecured portions.

I am also going to make this blog a bit more personal and talk about some issues that are not legal in nature.   Right now I am trying to figure out what to do with the 18 pounds of tomatoes the garden produced yesterday and the several more pounds it will produce today.