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House vote expected today on mortgage modification legislationUnder current law, bankruptcy judges can order the modification of a mortgage on a vacation home or a boat, but are not able to do so if the home is the primary residence of the person filing. Consumer advocacy organizations, such as Consumer Action, U.S. PIRG, and the Center for Responsible Lending, have been calling for this change for some time. It will require no taxpayer funding and they believe it will help stabilize home values. While many banking groups oppose the legislation, Citigroup has indicated support for such a measure. In addition to the bankruptcy modification measure, the legislation would shield lenders who modify loans from lawsuits by investors. This protection is considered key to any large scale efforts to modify mortgages since many loans have been packaged and resold to investors. Voluntary efforts to modify loans have largely failed in part due to the lack of flexibility lenders have to change the terms of these securitized loans. The Center for Responsible Lending, which publishes foreclosure statistics, estimates there are 6,600 new foreclosures a day — or one every 13 seconds.
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