at the start of the GWBush presidency home mortgage lenders had to assume the loss of the value of the collateral. NOW under the Bankruptcy reform act, the homestead mortgage can not be stripped into secured and unsecured portions. Lenders know this and thus they have set themselves up for an all or nothing fall.
That said, the new move (among the bankrupt with the finacial income to fight it) is to challenge the home mortgage docuemnts and move the entire mortgage into the unsecured pile of debt.
The article is a slimy misrepresentation of ecconomics and law.
Don’t forget the cries from the professional victims groups to extend credit to more and more people (who weren’t credit worthy). Then the gov’t comes back and blames the lenders, or the victims groups cry again that the terms are too high.
And let’s not forget, also, that the friendly IRS sees any debt that you have written off under foreclosure as “INCOME” on which you have to pay taxes.