Foreclosure Resolution Blog

The solution du jour floating around in Congress is a proposed provision to allow mortgage cram-downs on personal residences through bankruptcy to stop foreclosure. Senator Dick Durbin has once again rolled out this proposed legislation. As usual, Democrats think it’s a stellar idea, while Republicans are outraged at the thought.There is a tremendous amount of confusion as to how this would work in practice. However, my goal here is not to write a treatise on bankruptcy cram-downs to stop foreclosure. Rather, I want to focus on how effective they would be in helping homeowners to stop foreclosure.

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Just when you thought the mortgage industry couldn’t get any more screwed up, it looks like having good credit actually makes it more difficult to stop foreclosure these days. According to just-released stats from HOPE NOW, only 26.9% of all prime workouts are loan modifications.

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