Senator Durbin Advocates Change Of Foreclosure Laws

Posted in Foreclosure, February 19th, 2008 |

The situation here is far worse than the national foreclosure picture. Carol Thomas is 69 years old. She has just been handed a foreclosure notice and wonders how long she can brew coffee in her own kitchen. She had fallen into a trap laid by a scammer who kept promising that things would work out fine. Today that person is in jail and Carol continues to boil in the hot foreclosure soup without any hope of reprieve. On the other hand she had lost precious time and money trying to work out a deal with a scammer. The con artist is now in Prison but that does not help Carol right now. Her mortgage payments have trebled because of ARM’s. From 6.4% it skyrocketed to 9.4% and there is no surety that it is going to stop there. There are hints that again it will go up in May.

Carol is just one among the many in the Foreclosure soup tureen. According to recent reports Peoria and Tazewell County foreclosure figures are far above the national average. This has led to a phenomenal rise in counseling related to house matters. There are many lagging behind in payments – 30 days to 120 days. President Bush has just given his nod to another fund for counseling services amounting to $180 million.

The fact that many will not be facing foreclosures does not mean that the problem is solved. Foreclosed houses sell at a low price and bring down the general real estate market. This in turn affects the tax kitty. Thus there is very little left for police and fire protection. Yet these last two are the two important pillars of a government.

Senator Dick Durbin says that it has a ‘negative ripple effect’ going down and down. He has come forward with some suggestions People in bankruptcy should also be allowed to refinance loans. So far this has not been allowed. The law does not allow modification of loans on the primary residence but only on vacation houses and farms. Durbin wants to change that law also.
Counselors feel that the best thing is to put a halt on foreclosures and find out ways for refinancing. If this is not done then thousands of houses will have ‘For Sale’ signs pasted on them – all because of foreclosures. It bodes ill for the socio-economic structure of the entire nation.