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Mortgage modification in a declining market

By Cathy Moran

I’m giddy at the prospect of modifying mortgages in Chapter 13 as an alternative to Truth in Lending suits.  While I’m finding lots of violations, and they give me levers against the lenders,  the TILA statute contemplates that the wronged borrower return the difference between their damages and the original loan to the lender.

In this credit market, I am fearful that many borrowers, particularly the older and the lower income homeowners, won’t be able to get a loan to tender back to the lender.

With the prospect of  mortgage modification, I expect that in a number of my cases, modification of the existing loan, especially if we can reduce principal to the current value of the property, will produce a better result for the client and one that does not require a new loan.

Pretty heady stuff.

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About Cathy Moran

I'm a veteran bankruptcy lawyer and consumer advocate in California's Silicon Valley. I write, teach, and speak in the hopes of expanding understanding of how bankruptcy can make life better in a family's future.

Chapter 13 available to more

About The Soapbox

You've arrived at the Bankruptcy Soapbox, a resource of bankruptcy information and consumer law.

Soapbox is a companion site to Bankruptcy in Brief, where I try to be largely explanatory and even handed (Note I said "try").

Here, I allow myself to tell stories and express strong opinions on how I think law should work for the consumer and small businesses when it comes to debt.

Moran Law Group
Bankruptcy specialists for individuals and small businesses in the San Francisco Bay Area

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