Congress is debating HR 1106 “Helping families save their home Act.” This law will allow the bankruptcy courts to modify or “cram down” mortgages to the current value of the debtor’s primary residence.

As many of you may have heard, Congress is debating HR 1106 “Helping families save their home Act.” This law will allow the bankruptcy courts to modify or “cram down” mortgages to the current value of the debtor’s primary residence. Currently, bankruptcy judges are already given this authority to modify borrowers’ mortgages on second homes, investment properties, and commercial properties, but they have not been permitted to modify the first mortgage on primary residences. Lenders argue that, if passed, the law will lead to higher interest rates, but consumer advocates argue that it’s a great method to help homeowners stay in their homes by allowing everyone that is upside down to become right side up again. We will continue to monitor this bill as it makes its way through Congress, and we urge everyone involved in the real estate investing and lending industries to pay close attention to it as well and contact Congressional representatives and Senators to relay their support or opposition to this bill.

On another note, there are many provisions of the American Recovery and Reinvestment Act of 2009 that touch entrepreneurs’ business lives. One important provision will allow business owners to carry back losses from 2008 and apply those losses to prior years’ taxes for potential refunds of taxes paid on past profits. The new law also provides favorable equipment deduction and depreciation provisions as well as shorter holding periods for S-Corporations. The best summary we have found about this new law is from the National Association of REALTORs at http://www.realtor.org/government_affairs/gapublic/american_recovery_reinvestment_act_home?lid=ronav0019 and http://www.realtor.org/RMODaily.nsf/pages/News2009022401?OpenDocument . We suggest that clients and friends review this summary to see how this law will affect their business and personal lives.