Banking on Reasonableness

Washington Times (02/26/08); Kittle, David G.
Mortgage Bankers Association Chairman-elect David Kittle, CMB, opposes legislation that would alter the bankruptcy code to include primary mortgage debt. He insists that primary mortgages have long been excluded from bankruptcy protection as a means of "maintaining the free flow of inexpensive mortgage credit to consumers" to help boost homeownership rates. Writing in the Washington Times, he also notes that bankruptcy should not be viewed as a "quick-fix" for homeowners facing foreclosure, as it will hurt their credit rating for the next 10 years and cost them thousands in legal fees. Additionally, the proposed legislative changes will boost interest rates by 1.5 percentage points, according to Kittle, as lenders take steps to reduce risk. Kittle concludes that homeowners would be better served by contacting their lenders directly or calling the HOPE NOW hotline to learn of available options to avoid foreclosure.