Personal bankruptcy

Helping Families Save Their Homes in Bankruptcy Amendment of 2008

hmoroz — Fri, 04 Apr 2008 13:47:08 -0400

Legislation

The middle class

Opposes

Video Summary

Injustice Facts

Percentage of securitized subprime loans from the fourth quarter of 2006 that are projected to end in foreclosure: 50

Percentage increase of foreclosure filings from February 2007 to February 2008: 60

Estimated number of foreclosures that a mortgage restructuring provision for primary residences would prevent: 600,000

Number of homes that will experience devaluation because of subprime foreclosures that take place nearby: 40.6 million

Average decline in property values for homeowners living near foreclosed properties, in dollars: 5,000

Amount of wealth the Center for Responsible Lending estimates would be saved by similar legislation that would otherwise be lost because of foreclosures of neighboring properties, in dollars: 72.5 billion

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports the Durbin Amendment and Opposes this vote to kill the amendment. The federal government and the mortgage industry’s failure to address the subprime mortgage and foreclosure crisis adequately could result in as many as 1.9 million Americans losing their homes in 2008 and 2009. Despite national awareness of the dire situation throughout 2007, foreclosure filings increased 60% from February 2007 to February 2008. Extending the same bankruptcy protections to primary residences that currently apply to luxury yachts and vacation homes is not only fair, but would prevent 600,000 families from losing their homes to foreclosure. Strengthened bankruptcy protection is also beneficial to middle-class families who are not themselves facing foreclosure: protecting these 600,000 families from foreclosure would save neighbors of foreclosed properties $72.5 billion in wealth that would otherwise be lost to reduced property values. Because the Helping Families Save Their Homes in Bankruptcy Amendment restricts eligibility for bankruptcy mortgage restructuring to homeowners who are unable to afford currently existing mortgages, mortgage interest rates should not increase: only homes in danger of foreclosure will qualify and the risk of foreclosure is already calculated into current interest rates. The “homestead floor” of $75,000 for homeowners over the age of 55 who are in bankruptcy allows older middle-class Americans to protect a minimum amount of investments they have made in their homes, while preventing wealthy Americans from using large estates to shelter money from creditors.

Quotes from Experts

Beyond this Bill

Additional Resources

Testimony of Mark Zandi, Chief Economist of Moody’s Economy.com, before the Senate Judiciary Committee

Center for Responsible Lending on Court-Supervised Loan Modifications

Harvard Law Professor Elizabeth Warren on Bankruptcy Reform and the Housing Crisis

Foreclosure Prevention Act of 2008

hmoroz — Thu, 06 Mar 2008 10:53:38 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Percentage of securitized subprime loans from the fourth quarter of 2006 that are projected to end in foreclosure: 50

Percentage increase of foreclosure filings from January 2007 to January 2008: 57

Estimated number of foreclosures that the mortgage restructuring provision in the Foreclosure Prevention Act would prevent: 600,000

Number of homes that will experience devaluation because of subprime foreclosures that take place nearby: 40.6 million

Average decline in property values for homeowners living near foreclosed properties, in dollars: 5,000

Amount of wealth saved by the Foreclosure Prevention Act that would otherwise be lost because of foreclosures of neighboring properties, in dollars: 72.5 billion

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports. The federal government and the mortgage industry’s failure to address the subprime mortgage and foreclosure crisis adequately could result in as many as 1.9 million Americans losing their homes in 2008 and 2009. Despite national awareness of the dire situation throughout 2007, foreclosure filings increased 57% from January 2007 to January 2008. Extending the same bankruptcy protections to primary residences that currently apply to luxury yachts and vacation homes is not only fair, but would prevent approximately 600,000 families from losing their homes to foreclosure. Strengthened bankruptcy protection is also beneficial to families who are not themselves facing foreclosure: protecting these 600,000 families from foreclosure would save neighbors of foreclosed properties $72.5 billion in wealth that would otherwise be lost to reduced property values. Because the Foreclosure Prevention Act restricts eligibility for bankruptcy mortgage restructuring to homeowners who are unable to afford their current mortgages, mortgage interest rates should not increase: only homes in danger of foreclosure will qualify and the risk of foreclosure is already calculated into current interest rates. Funds for counseling services would further reduce the potential for foreclosure, while resources for redevelopment of abandoned and foreclosed homes would mitigate the decline of property value that weakens the financial stability of homeowners and shrinks the revenues of state and local governments. The Foreclosure Prevention Act is an important next step to assist cash-strapped middle-class Americans after the economic stimulus package signed into law in February of 2008.

Quotes from Experts

Beyond this Bill

Additional Resources

Testimony of Mark Zandi, Chief Economist of Moody’s Economy.com, before the Senate Judiciary Committee

Center for Responsible Lending on the Foreclosure Prevention Act of 2008

Harvard Law Professor Elizabeth Warren on Bankruptcy Reform and the Housing Crisis

Home Ownership and Mortgage Equity Protection Act of 2008

atraub — Mon, 03 Mar 2008 16:27:35 -0500

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Bankruptcy Abuse Prevention And Consumer Protection Act Of 2003

atraub — Tue, 25 Sep 2007 16:03:31 -0400

Legislation

The middle class

Opposes

Video Summary

Injustice Facts

Number of American households deemed “credit worthy” by the leading industry: 8 in 10
Number of middle-class American families that filed for bankruptcy in 2003: 1.3 million
Number of Americans that “always or sometimes worry about money”: 4 in 10
Average amount of debt held by American credit card holders: $2,294

Overview/Summary

Middle Class Position Analysis

The Middle Class Opposes: In 2003, 1.3 million middle-class American families buckled under the crushing weight of increased healthcare, childcare, and other fixed costs, and filed for bankruptcy. Today, bankruptcy filings are more prevalent than filings for divorce, and more numerous than deaths from heart attacks. This bill creates a windfall for unregulated credit counseling agencies, many of which are under civil and criminal investigation. It also empowers the credit card industry to saddle middle-class families with unreasonable interest rates and payment agreements by expanding their ability to re-evaluate and terminate debtor agreements without the consent of a court. And, it would limit Americans’ ability to receive federal bankruptcy protection when they lose their jobs, incur uninsured medical bills or when a wage-earning spouse leaves.

Quotes from Experts

Beyond this Bill

Additional Resources

Bankruptcy Abuse Prevention And Consumer Protection Act Of 2004

atraub — Mon, 24 Sep 2007 16:11:47 -0400

Legislation

The middle class

Opposes

Video Summary

Injustice Facts

Number of middle-class American families that filed for bankruptcy in 2003: 1.3 million
Number of credit card solicitations sent to American families annually: 5 billion
Rank of job loss among the causes of personal bankruptcy: 1
Percentage increase in the rate of medical-related bankruptcies between 1981 and 2001: 2,200
Percentage of Americans with medical debt in a recent study who said they went without food before resorting to bankruptcy: 22
Percent who had a utility shut off: 30

Overview/Summary

Middle Class Position Analysis

The Middle Class Opposes. In 2004, 1.58 million American households, the majority of them middle-class families with children, were overwhelmed by job losses, massive unexpected medical bills or the devastating break-up of their families and were forced to declare personal bankruptcy. The leading cause of bankruptcy was not irresponsible consumer spending, but the loss of a job. Medical crisis was the second leading cause of bankruptcy. This bill is a windfall for the credit card industry, boosting the profits of credit issuers by making it easier for them to collect from the most financially distressed families. It empowers the credit card industry to saddle middle-class families with unreasonable interest rates and payment agreements by expanding their ability to reevaluate and terminate debtor agreements unilaterally. The bill also creates a windfall for unregulated credit counseling agencies, many of which are under civil and criminal investigation. And it would limit Americans' ability to receive legitimate federal bankruptcy protection when they lose their jobs, incur uncovered medical bills or when a wage-earning spouse leaves.

Quotes from Experts

Beyond this Bill

Additional Resources

Bankruptcy Abuse Prevention And Consumer Protection Act Of 2005

atraub — Wed, 19 Sep 2007 14:16:00 -0400

Legislation

The middle class

Opposes

Video Summary

Injustice Facts

Number of middle class American families that filed for bankruptcy in 2003: 1.3 million
Number of credit card solicitations sent to American families annually: 5 billion
Percentage increase in the rate of medical-related bankruptcies between 1981 and 2001: 2,200%
Percentage of Americans with medical debt in a recent study who said they went without food before resorting to bankruptcy: 22
Percent who had a utility shut off: 30

Overview/Summary

Middle Class Position Analysis

The middle class opposes. In 2005, a record 2 million American households were forced to declare personal bankruptcy. Studies suggest that the majority were middle-class families with children, who were pushed to insolvency by job losses, massive unexpected medical bills, or the devastating break-up of their families. In recent years the leading cause of bankruptcy has not been irresponsible consumer spending, but the loss of a job. Medical crisis is the second leading cause of bankruptcy. This bill would limit Americans’ ability to receive federal bankruptcy protection when they lose their jobs, incur uninsured uncovered medical bills or when a wage-earning spouse leaves. The legislation, which has been introduced every session since 1998 but never passed before, enacts the wish list of the credit card industry, boosting the profits of credit issuers by making it easier for them to collect from even the most financially distressed families. It empowers the credit card industry to saddle middle-class families with unreasonable interest rates and payment agreements by expanding their ability to re-evaluate and terminate debtor agreements without the consent of a court. The bill also creates a windfall for unregulated credit counseling agencies, many of which are under civil and criminal investigation.

Amendments that would have allowed the elderly to hold onto their homes and would have shielded veterans and active duty military from the most punitive parts of the bill did not pass the Senate. An amendment that would have protected employees’ earnings and retirement savings when their employer files for bankruptcy was also rejected.

Personal bankruptcy

Helping Families Save Their Homes in Bankruptcy Amendment of 2008

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

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Beyond this Bill

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Additional Resources

Foreclosure Prevention Act of 2008

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

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Home Ownership and Mortgage Equity Protection Act of 2008

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The middle class

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The middle class

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Overview/Summary

Middle Class Position Analysis

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Bankruptcy Abuse Prevention And Consumer Protection Act Of 2004

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Bankruptcy Abuse Prevention And Consumer Protection Act Of 2005

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources