Why Citigroup "Backs" Home Loan Bankruptcy Plan

[cyn5]

Uh, tell me about it CatsInTrouble! Both me & hubby are way over our heads in private student loan debt! Our federal doesn't bother me since our payments are somewhat reasonable and you can always get a forebearance or deferment really easily for your fed loans. Get this...last summer we decided to apply for a consolidation for our private loans with AES (for all our private loans)...girl on the phone was like you can't get one of these unless your score is over 720...well sure enough we were "approved" over the phone. Then two days later, we called to see where our paperwork was and they told us the lender had backed out of the loan! This was when lenders stopped offering private loans all together, let alone the consolidation loans. So, now you can't get these outrageous high interest rate loans consolidated into one loan with a longer payment term, and they offer none of the same protections/benefits of the federal student loans but are classified as "student loans". Rediculous. I watch the news for anything regarding changing the laws back to pre-2005 bk as well as monitor info from some of the watch dog groups regarding these types of loans.

[cyn5]

Also just saw this article about the New Mexico Attorney General proposing bk reform (for homeowners facing foreclosures).

SANTA FE, N.M. (AP) - New Mexico Attorney General Gary King is urging Congress to change the U.S. Bankruptcy Code to allow homeowners facing foreclosure to stay in their homes.

King and attorneys general in 21 other states have sent a letter to Congress requesting that losses and benefits would be shared between homeowners and investors.

King says if a federal Bankruptcy Court ordered a loan modification, the homeowner would be required to pay the loan based on the home's current value. The mortgage holder would absorb the unsecured portion of the debt that exceeds the value of the home.

King says homeowners with regular income would pay a sustainable mortgage.

And, he says, the mortgage holder receives steady income and avoids the expenses that come with a foreclosure sale.

(Copyright 2009 by The Associated Press. All Rights Reserved.)
Source: KOB TV, Albequerque, NM

http://www.msnbc.msn.com/id/28625248/

[JRScott]

With the conditions listed by Citi it basically would undermine the effectiveness of the program. For years they have refused to work with anyone, and now all of a sudden as a condition they want proof that someone tried to work it out.