Relief through voluntary mortgage modification is largely an illusion, fostered by the mortgage industry to prevent real reform.
Judicial mortgage modification refers to changing Chapter 13 law to allow a bankruptcy judge to re-write the first mortgage on a residence, by lowering the balance on the mortgage to the value of the home.
That is all the mortgage company can get, if they foreclose, take the house back, and re-sell it.
And that process takes months and cost money.
So why does the finance industry fight this proposal tooth and nail?
Hey, if you or I were getting the taxpayer to cover all of our losses, we would fight any other proposal too.
So far, the mortgage companies and banks have gotten us, the taxpayer, to cover trillions of dollars of their losses, largely caused by the bad mortgages they wrote and the risky securities they peddled backed by those very mortgages.
Wall Street was stupid enough to buy this junk themselves.
Though maybe not so stupid, as they are still raking it in, being too big to fail.
Not like you and me, we are plenty small enough to fail.
Judicial Mortgage Modification, Second Chance?
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