You can read a summary (and then the original Op Ed) regarding how home foreclosures lack comparable protection here. While what Jack Kemp is advocating sounds like good policy, I’m also interested in how this situation came to be - how is it that home loans (secured by homes) are treated differently than other secured loans?
I don’t know, but I’d be interested if this is an (unintended or intended) result of the “new bankruptcy law” that no longer provides much protection from creditor home seizure. When you had that protection, a court (as opposed to a lender) fiddling with interest rates would seem moot. Lenders then had incentive to work with homeowners. Now, especially with the change to bundling mortgages into securities, creditors may have less incentive - because instead of a single bank owning your mortgage (and standing to gain or lose), it’s owned by numerous investors (see prior explanatory link).
I’m just an outside observer to the mortgage mess. I’d be interested if anyone has a more educated take on the topic.
Post a Comment