In a bygone era, the United States shouted “Amen!” and “Preach On!” as the International Monetary Fund scolded Latin American nations for their huge national debts. Now, the IMF has its sights set on the debt crisis in the United States. Congressman Frank Wolf has predicted (based on a Congressional Budget Office report) that “every penny of the federal budget will go to interest on the debt and entitlement spending by 2025.” The IMF has eloquently labeled this situation as “problematic”.
Can the cram-down ride to the rescue? The IMF has said “maybe”.
The cram-down applies to underwater mortgages. If you owe $300,000 on your house which is only worth $250,000, a bankruptcy court may reduce your mortgage by $50,000. Such a reduction may very well reduce your mortgage to a manageable monthly payment. Pretty much everyone agrees that a key to revving up the recovery is to keep people in their homes.
For more information on how a cram-down may affect you, call the law office of Henley and Henley for your free consultation.