More than 8,000 homes are being foreclosed everyday. New legislation will likely be passed this week to give bankruptcy judges the authority to cut interest rates and principal on troubled mortgages.
The hotly-contested provision rewriting the bankruptcy code, opponents say, would allow borrowers to effectively rewrite their mortgage contracts and would prompt lenders to tighten their standards and raise interest rates.
Part of the new legislation would also give states more than $4 billion to buy up and refurbish foreclosed homes. Also, the government is brewing the idea of offering a $15,000 tax credit to individuals who buy foreclosed home. I feel that this will give some incentive for people to buy foreclosed homes, instead of building or buying something else. This could also help eliminated a portion of the trouble mortgage problem within the United States.
