J Thomas Black
Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization

Congratulations to our new President Obama! We all wish the best for our new President. He certainly has his work cut out for him. For example: The Associated Press reported last week that more than 2.3 million American homeowners faced foreclosure proceedings last year, an 81 percent increase from 2007. Our foreclosures here in Houston have not increased much, but that could change as the recession goes on.

Besides, if it is YOUR HOUSE that is being foreclosed on, it really doesn't matter if there are 10 or 10 million foreclosures, the one that you are concerned about is YOURS. If you have one of those "exploding ARMs" or Adjustable Rate Mortgages, you may want to request a Loan Modification from your mortgage company. I recommend that you get help with it, although many people work them out themselves.

We are beginning to request them now for clients that have adjustable rate mortgages. Unfortunately, all we can really do now, is request a modification of a mortgage, to reduce the interest rate ask for a fixed rate instead of an adjustable rate. A bill pending in Congress would give people who are in Chapter 13 bankruptcy the right to modify or change their loan to: (a) provide for a fixed rate; (b) lower the interest rate; (c) reduce the amount of the principal balance of the loan to the value of the house, if it is lower; and (d) extend the term of the mortgage out to 40 years. This would help a lot of people that are stuck with so-called "predatory" or "toxic" mortgages, and are in danger of losing their homes. President Obama is in favor of this change in the law. Hopefully with his help, this law change will happen.

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