WASHINGTON — After taking some time to mull over the provisions of Emergency Home Ownership and Mortgage Equity Protection Act of 2007 (H.R. 3609), CUNA has announced that it could support some "surgical" changes to the bankruptcy code as it applies to the subprime mortgage crisis.
CUNA President/CEO Dan Mica outlined for the House Judiciary Committee five points that credit unions could support:
-Permitting judges to lower the principal owed to no less than the value of the house at the time the mortgage was made;
-Permitting judges to lower interest rates to no less than current market rates for standard mortgage loans;
-Permitting judges to extend the remaining term by up to five years, but no more than 40 years;
-Permitting the cancellation of prepayment penalties; and
-Extending the authority for bankruptcy judges to modify loan terms only on loans made between Jan. 1, 2003 and the date of enactment of the bill.
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"While we have considerable concerns with any legislation that would open the Bankruptcy Code to amendment so soon after major revisions were enacted, we understand the need to be responsive to the current crisis in the subprime mortgage market," Mica wrote. "We urge the Committee to be surgical in its effort to address the current crisis through amendments to the code."
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