Stop Foreclosures

Finally, the U.S. House has approved the bankruptcy judge empowerment proposal, one of the most significant proposals in President Barack Obama’s program to avert foreclosures. By a vote of 234 to 191, the lawmakers gave bankruptcy judges the power to reduce the mortgage loans of Americans in bankruptcy to save them from foreclosures. But the bill has to be first approved by the Senate and signed by the president before homeowners hoping for the approval of this option can rejoice.

The U.S. Congressional Oversight Panel has praised President Barack Obama’s $275-billion program to stop foreclosures, but also faulted it for not including second mortgages and for not instituting a legal framework that could facilitate loan modification. Specifically, the panel cited the lack of a scheme to help owners of second mortgages and the lack of legislation to empower judges to help bankrupt homeowners avoid foreclosures.

In her speech, delivered before participants at the American Bankers Association National Conference for Community Bankers, Federal Reserve Governor Elizabeth Duke has called on the government to reduce the costs of foreclosures as a way to prevent the rise in the number of repossessed homes.

After newly-elected US President Barack Obama’s first news conference on Monday where he laid out the new government’s plan of action against the worsening economic recession, US Treasury Secretary Timothy Geithner is now posed to release a bank-rescue plan on Tuesday.