Eighteen months ago, approximately 2 million foreclosures were predicted across the country. Now economists are predicting an additional 8-10 million foreclosures over the next four years. It is painfully obvious that the housing crisis is fueling the downturn in the economy and just as obvious is the Bush administration's refusal to address the problem in a swift an meaningful manner. Finally, legislation has been introduced which will alleviate the problem. The "Helping Families Save Their Homes in Bankruptcy Act of 2009" was introduced in both House and Senate yesterday and seeks to modify the bankruptcy code to allow homeowners to modify their mortgages in a bankruptcy case. Some interesting facts about the bill:

• The bill, if enacted, will be effective on the date of the enactment. Previous changes to the bankrupty code provided a 6 month waiting period.
  
• The bill would allow mortgages to be modified in several ways including fixing interest rates on adjustable rate mortgages at reasonable rate and modifying loan terms.
• The bill would not only apply to new debtors filing Chapter 13 but also to existing Chapter 13 debtors.
• The bill also deals with servicer abuses as well such as improper fees and penalties which, in my experience, can put a homeowner in foreclosure just as quickly as missing payments.

All in all the legislation is encouraging and is the best way to turn the economy around. Keeping people in their homes while at the same time providing lenders and servicers to deal fairly with homeowners sends a message of hope to those struggling in these tough times.