Thursday, October 28, 2010
RI bankruptcy court foreclosure mediation role praised
PROVIDENCE, R.I. -- For close to a year, the U.S. Bankruptcy Court in Rhode Island has overseen loan modification agreements that helped homeowners avoid foreclosure, but Deutsche Bank is now challenging the authority of the court to conduct its loss-mitigation mediation program, according to U.S. Sen. Sheldon Whitehouse, D-RI.
Whitehouse criticized the bank's action Thursday at Rhode Island Housing's downtown office, where he led a hearing of the Senate Judiciary Committee's Subcommittee on Administrative Oversight and the Courts.
Whitehouse, who last year proposed giving bankruptcy court judges the power to reduce the principal on primary residence mortgages -- an idea that "the large banks have fought against... with their full lobbying might," said that since that proposal failed, "the foreclosure crisis has not relented in Rhode Island or across the nation."
The hearing, which was also attended by U.S. Sen. Jack Reed, D-R.I., included testimony from two Rhode Island homeowners, Robert Cardullo, of Johnston, and Larry Britt, of Riverside, Judge Martin Glenn, a bankruptcy judge in the Southern District of New York, John Rao, of Newport, an lawyer with the National Consumer Law Center in Boston, and Chris Lefebvre, a Pawtucket lawyer and a member of the debtor/creditor committee of the Rhode Island Bar Association.