Helping Families Save Their Homes in Bankruptcy Act of 2007

A bill to address the treatment of primary mortgages in bankruptcy, and for other purposes.

7/29/2008--Reported to Senate amended. Helping Families Save Their Homes in Bankruptcy Act of 2008 - Title I: Minimizing Foreclosures -
(Sec. 102) Amends federal bankruptcy law to permit a bankruptcy plan to:
(1) modify a loan secured by a nontraditional mortgage, or a subprime mortgage, and any lien subordinate to such claim, on the principal residence (mortgage) of a chapter 13 debtor (individual with regular income); and
(2) provide for payment of such loan, at a fixed annual percentage rate of interest, for a period that is the longer of 30 years (reduced by the period for which the loan has been outstanding) or the remaining term of such loan, beginning on the date of the order for relief. Provides that, if a claim has been modified to an amount below the original principal of the loan, and the debtor's principal residence is sold during the term of the plan, the holder of the claim shall be entitled to receive, in addition to the unpaid portion of the allowed secured claim, the net proceeds of the sale, or the amount of the holder's allowed unsecured claim, whichever is less.
(Sec. 103) Exempts a chapter 13 debtor from the requirement for credit counseling if the court receives certification that debtor's principal residence has been scheduled for a foreclosure sale. Title II: Providing Other Debtor Protections -
(Sec. 201) Declares that the plan need not provide for the payment of, and the debtor, the debtor's property, and property of the estate shall not be liable for, any fee, cost, or charge that arises in connection with a claim secured by the debtor's principal residence, if the event that gives rise to the fee, cost, or charge occurs while the case is pending but before the discharge order, except to the extent that:
(1) notice to the court is filed within a specified deadline; and
(2) such fees, costs, or charges are lawful, reasonable, and provided for in the agreement under which such claim or security interest arose. Permits a bankruptcy plan to provide for waiver of any prepayment penalty contained on a claim secured by debtor's principal residence.

(Sec. 202) Authorizes the trustee in bankruptcy to request joinder or substitution for the debtor as the real party in interest in any action in state or federal court regarding a claim or defense asserted by an individual debtor that was not scheduled in the debtor's petition. Permits the debtor to proceed as the real party in interest if the trustee does not make such a request.

(Sec. 203) Amends the judicial code to authorize the court in any core proceeding under bankruptcy law to hear and determine a proceeding in lieu of referral to arbitration if the case involves an individual debtor whose debts are primarily consumer debts.

(Sec. 204) Exempts from the estate in bankruptcy up to $75,000 of the debtor's aggregate interest in real property used as debtor's principal residence if the debtor is age 55 or older (homestead exemption).

(Sec. 205) Prohibits the court from allowing a claim that is subject to any remedy for damages or rescission due to failure to comply with the Truth in Lending Act or any other state or federal consumer protection law.


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Sponsor

• Sen. Richard Durbin [D, IL]
• and 13 Co-Sponsors
  • Sen. Joseph Biden [D, DE]
  • Sen. Barbara Boxer [D, CA]
  • Sen. Sherrod Brown [D, OH]
  • Sen. Hillary Clinton [D, NY]
  • Sen. Christopher Dodd [D, CT]
  • Sen. Dianne Feinstein [D, CA]
  • Sen. Thomas Harkin [D, IA]
  • Sen. John Kerry [D, MA]
  • Sen. Robert Menéndez [D, NJ]
  • Barack Obama
  • Sen. John Reed [D, RI]
  • Sen. Charles Schumer [D, NY]
  • Sen. Sheldon Whitehouse [D, RI]
  close

Committees

• Senate Judiciary

Amendments

This bill has no amendments.

Amendments to S.2136

Number	Status	Purpose

Bill Status

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Introduced		Voted on by Senate		Voted on by House		Considered By President		Bill Becomes Law
October 03, 2007

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All Bill Actions

• Sep 26, 2008: By Senator Leahy from Committee on the Judiciary filed written report. Report No. 110-514. Minority views filed.
• Jul 29, 2008: Committee on the Judiciary. Reported by Senator Leahy with an amendment in the nature of a substitute. Without written report.
• Added to calendar on Jul 29, 2008: Placed on Senate Legislative Calendar under General Orders. Calendar No. 911..
• Apr 03, 2008: Committee on the Judiciary. Date of scheduled consideration. SD-226. 10:00 a.m.
• Added to calendar on Apr 03, 2008: Committee on the Judiciary. Ordered to be reported with an amendment favorably..
• Apr 03, 2008: Committee on the Judiciary. Ordered to be reported with an amendment favorably.
• Mar 06, 2008: Committee on the Judiciary. Date of scheduled consideration. SD-226. 10:00 a.m.
• Feb 14, 2008: Committee on the Judiciary. Date of scheduled consideration. SD-226. 10:00 a.m.
• Dec 05, 2007: Committee on the Judiciary. Hearings held.
• Oct 03, 2007: Sponsor introductory remarks on measure. (CR S12536-12537)
• Oct 03, 2007: Read twice and referred to the Committee on the Judiciary.
• Introduced on Oct 03, 2007.

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Related Bills:

• S.2636

Related Issue Areas:

• Finance
• Actions and defenses
• Bankruptcy
• Bankruptcy courts
• 13 more
• Consumer credit
• Consumers
• Counseling
• Damages
• Debtor and creditor
• Foreclosure
• Housing
• Law
• Mortgage interest rates
• Mortgages
• Parties to actions
• Social services
• Trusts and trustees

Data from the Congressional Research Service

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In the News

January 06, 2009 And So It Begins ...

...guy and superanalyst Pete Davis tell me: Senate Majority Whip Dick Durbin (D-IL) plans to introduce his bill from last year, S.2136, and a similar bill is expected to be introduced in the House.  It would allow non-traditional and subprime first mortga

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Source: U.S. News & World Report

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January 29, 2008 Alliance To End The Foreclosure Crisis Launched

... supports HR3609 (The Emergency Home Ownership and Mortgage Equity Protection Act) and S.2136 (The Helping Families Save Their Homes in Bankruptcy Act). ...

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Source: Mortgageorb, CT

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December 15, 2007 Helping borrowers will help neighborhoods

S. 2133 and S. 2136 would permit modification of mortgages under Chapter 13 of the federal bankruptcy code. One notable House effort is HR 3609 A key ...

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Source: Milwaukee Journal Sentinel (subscription), WI

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Blog Coverage

December 20, 2008 RE: Note to Senator Specter_News-About-Adobe-Flex_Adobe Flex Developer

Or consideration could have been given to Senator Durbin’s proposed legislation, S.2136, which would have authorized the bankruptcy courts to reset the principal balance depending on the value of the home. I opposed that bill because I ...

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Source: Adobe Flex Developer

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December 08, 2008 the crustybastard: The crustybadgering continues, unabated.

I write to ask your support of S. 2136: Helping Families Save Their Homes in Bankruptcy Act of 2008. Only homeowners declaring bankruptcy who are in imminent danger of foreclosure are eligible for mortgage modifications. ...

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Source: the crustybastard

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December 08, 2008 BankruptcyProf Blog: Senator Richard J. Durbin Press Conference

Assuming this new legislation is the same as the bill he offered in October, 2008, it is Senate Bill S.2136. 1. Attend the press conference. If you are in DC, or a member of an organization that is headquartered in DC, PLEASE ATTEND OR ...

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