H.R. 225 would amend title 11 of the United States Code with respect to modification of certain mortgages on principal residences.
Detailed Summary
Emergency Homeownership and Equity Protection Act - Amends federal bankruptcy law governing a Chapter 13 debtor (adjustment of debts of an individual with regular income). Excludes from computation of debts the secured or unsecured portions of: (1) debts secured by the debtor's principal residence if the current value of that residence is less than the secured debt limit; or (2) debts secured or formerly secured by debtor's principal residence that was either sold in foreclosure or surrendered to the creditor if the current value of such real property is less than the secured debt limit.
Declares the credit counseling requirement inapplicable to a Chapter 13 debtor who certifies that he or she has received notice that the holder of a claim secured by the debtor's principal residence may commence a foreclosure on the debtor's principal residence.
Allows modification of the rights of claim holders, in the event of a foreclosure notice for a chapter 13 debtor, among other means by: (1) reducing a claim to equal the value of the debtor's interest in the residence securing such claim, and any adjustments to a related adjustable rate of interest; (2) waiving early repayment or prepayment penalties; and (3) extending the repayment period.
Denies debtor liability for certain fees and charges incurred while the bankruptcy case is pending and arising from a debt secured by the debtor's principal residence, unless the claim holder observes specified requirements.
Adds to conditions for court confirmation of a plan in bankruptcy that: (1) the holder of a claim secured by the debtor's principal residence retain the lien securing the claim until the later of the payment of such claim as reduced and modified or the discharge of a debtor from all debts; and (2) the plan modifies the claim in good faith.
Excludes from final discharge of a debtor from all debts: (1) any payments to claim holders whose rights are modified under this Act; and (2) any unpaid portion of a claim as reduced.
Status of the Legislation
Latest Major Action: 1/22/2009: House committee/subcommittee actions. Status: Committee Hearings Held.
Points in Favor
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Points Against
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Visitor Comments
Jim
January 11, 2009, 12:05pm (report abuse)Not knowing the text of the bill, but reading the straightforward proposal presented by HR 3609 by Brad Miller, I trust this legislation will actually help consumers and also prevent future lender abuse by removing the anti-modification clause in title 11 which encouraged bad lending practices, since their was no possibility of modifying the original loan conditions in cases of chapter 13.
lea
January 26, 2009, 9:58pm (report abuse)this is exactly what needs to happen to kepp families in their homes. this is a step in stopping the foreclosure crisis!!!!!!!!
Jason Thompson
January 27, 2009, 11:44pm (report abuse)Finally we are heading down the right road!
Jim
January 28, 2009, 10:10pm (report abuse)Hopefully the influence of PACs buying off politicians can be prevented and this legislation becomes public law quickly.
This legislation needs top priority and quickly submitted to the full house for approval.
shb
February 4, 2009, 10:34pm (report abuse)We were forced in to CH 13 by the lender to stop foreclosure and keep our home. The lender refused to work with us then and continue to consider a workout plan, modification or refi. It makes no senss. Our only hope to survival is a reprieve if the Amendemnt is passed.
Jim
February 10, 2009, 5:38pm (report abuse)Brad, please keep the mud out of this version of the law revision to allow homeowners to modify loans in BK.
Apparently the other version is getting amended to reduce the effectiveness of the addressing the anti-modification provision in title 11 which keeps the housing problem tumbling downward.
Jim
(logged in user) February 25, 2009, 7:58pm (report abuse)HR 1106 goes for a vote tomorrow which has bsically HR 200 without the king flaw. Brad Miller is co-sponsoring the bill also. It reads better than this version or HR 200 in my view. Hopefully HR 1106 passes quickly.
Jim
(logged in user) March 5, 2009, 11:31pm (report abuse)HR 1106 was left as unfinished business for the next day event. Also HR 1106 has a lengthy amendment added to it which basically takes away any effectual help from the original proposal. In fact, the amendment is probably longer than the actual proposal. The King Amendment on HR 200 is similar in destruction as the amendment Conyers is trying to or did add to HR 1106. HR 225 does not have such a cancelling provision onto it and is the best means to help people to successfully complete their plans. The home loans that caused insolvency not being negotiable in BK and the unwillingness of servicers/investors to voluntarily modify loans outside of BK are perpetuating the negative slide to our economies around the world.
Also the loans would be modified to current market rates with a risk premium. The balance of principal that will not be secured by the home will be treated as unsecured debt in the plans.
Also the presense of an alternative to unwilling modifications as presently reverses
Jim C
March 31, 2009, 8:59pm (report abuse)Finally a set of laws which will help our economy recover. This positive change in title 11 will help remove bad loan conditions that usually lead to foreclosure and may cause plans submitted for recovery from causing further insolvent conditions when rates increase in the predatory loans. HR 1728 should reduce these problematic loans from being marketed originally. The author is tremendous, a real person representing the people.