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Proposed Law to Help Homeowners

Posted on in Bankruptcy

Good news could be on the way for cash-strapped American homeowners residing in states teetering on bankruptcy, such as Illinois. In mid-September, Representative John Campbell (R–CA) introduced The Defending American Taxpayers from Abusive Government Takings Act, legislation meant “to stop reckless city and county governments from enacting profiteering schemes that seek to cash in on the plight of underwater homeowners through the arbitrary seizure of private home loans.”

An underwater homeowner is any person who holds a mortgage worth more than the current value of the home. According to the Washington Post even without the new legislation, the number of underwater mortgages has dropped 1.3 million in the past year. According to the Post, “if many of those Americans start refinancing their homes at low rates, that will constitute a substantial stimulus to the macro-economy, worth potentially hundreds of billions of dollars.”

Despite this, the proposed new law will continue to help homeowners who haven't been as lucky, and is expected to further facilitate the recovery of the American housing market. Rep. Campbell, upon introduction of the law, stated that the housing market must be fixed “in a way that does not break the law and does not enrich undeserving, politically-connected entities in cities and counties with unsustainable budget deficits.”

Illinois is one such state with an unsustainable budget deficit. According to the University of Illinois Institute of Government and Public Affairs, Illinois has the most underfunded public employee pension system in the nation. While the pension system may seem to have little connection to home ownership, one does indeed affect the other, when it comes to the funding of the state budget and taxpayer dollars. Home ownership, and the risk of foreclosure, directly correlates to risk of bankruptcy, and bankrupt residents are in no position to help a state government become financially sound.

Even with these initiatives on the table, if you or someone you know is at risk of foreclosure or subsequent bankruptcy, don't go through it alone. Contact an experienced Cook County bankruptcy attorney today.

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