HR 225 IHCommentsClose CommentsPermalink

To amend title 11 of the United States Code with respect to modification of certain mortgages on principal residences, and for other purposes.CommentsClose CommentsPermalink

January 7, 2009CommentsClose CommentsPermalink

Mr. MILLER of North Carolina (for himself, Ms. LINDA T. SANCHEZ of California, Mr. FRANK of Massachusetts, Mr. WATT, Mr. ELLISON, Ms. LEE of California, Mr. COURTNEY, Mr. BLUMENAUER, Mrs. CHRISTENSEN, Ms. EDDIE BERNICE JOHNSON of Texas, Mr. BUTTERFIELD, Mr. GRIJALVA, Ms. JACKSON-LEE of Texas, Mr. SIRES, Mr. CAPUANO, Mr. HINCHEY, Mr. GEORGE MILLER of California, Mr. STARK, Mr. JOHNSON of Georgia, Mr. DAVIS of Alabama, Mr. VAN HOLLEN, Ms. WASSERMAN SCHULTZ, Mr. COHEN, Ms. EDWARDS of Maryland, and Mr. LEWIS of Georgia) introduced the following bill; which was referred to the Committee on the JudiciaryCommentsClose CommentsPermalink

To amend title 11 of the United States Code with respect to modification of certain mortgages on principal residences, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Emergency Homeownership and Equity Protection Act’.CommentsClose CommentsPermalink

SEC. 2. ELIGIBILITY FOR RELIEF.

Section 109 of title 11, United States Code, is amended--CommentsClose CommentsPermalink





(1) by adding at the end of subsection (e) the following: ‘For purposes of this subsection, the computation of debts shall not include the secured or unsecured portions of--CommentsClose CommentsPermalink





‘(1) debts secured by the debtor’s principal residence if the current value of that residence is less than the secured debt limit; orCommentsClose CommentsPermalink





‘(2) debts secured or formerly secured by real property that was the debtor’s principal residence that was sold in foreclosure or that the debtor surrendered to the creditor if the current value of such real property is less than the secured debt limit.’; andCommentsClose CommentsPermalink





(2) by adding at the end of subsection (h) the following:CommentsClose CommentsPermalink





‘(5) The requirements of paragraph (1) shall not apply in a case under chapter 13 with respect to a debtor who submits to the court a certification that the debtor 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.’.CommentsClose CommentsPermalink

SEC. 3. AUTHORITY TO MODIFY CERTAIN MORTGAGES.

Section 1322(b) of title 11, United States Code, is amended--CommentsClose CommentsPermalink





(1) by redesignating paragraph (11) as paragraph (12),CommentsClose CommentsPermalink





(2) in paragraph (10) by striking ‘and’ at the end, andCommentsClose CommentsPermalink





(3) by inserting after paragraph (10) the following:CommentsClose CommentsPermalink





‘(11) notwithstanding paragraph (2) and otherwise applicable nonbankruptcy law, with respect to a claim for a loan made before the date of the enactment of the Emergency Homeownership and Equity Protection Act secured by a security interest in the debtor’s principal residence that is the subject of a notice that a foreclosure may be commenced, modify the rights of the holder of such claim--CommentsClose CommentsPermalink





‘(A) by providing for payment of the amount of the allowed secured claim as determined under section 506(a)(1);CommentsClose CommentsPermalink





‘(B) if any applicable rate of interest is adjustable under the terms of such security interest by prohibiting, reducing, or delaying adjustments to such rate of interest applicable on and after the date of filing of the plan;CommentsClose CommentsPermalink





‘(C) by modifying the terms and conditions of such loan--CommentsClose CommentsPermalink





‘(i) to extend the repayment period for a period that is no longer than the longer of 40 years (reduced by the period for which such loan has been outstanding) or the remaining term of such loan, beginning on the date of the order for relief under this chapter; andCommentsClose CommentsPermalink





‘(ii) to provide for the payment of interest accruing after the date of the order for relief under this chapter at an annual percentage rate calculated at a fixed annual percentage rate, in an amount equal to the then most recently published annual yield on conventional mortgages published by the Board of Governors of the Federal Reserve System, as of the applicable time set forth in the rules of the Board, plus a reasonable premium for risk; andCommentsClose CommentsPermalink





‘(D) by providing for payments of such modified loan directly to the holder of the claim; and’.CommentsClose CommentsPermalink

SEC. 4. COMBATING EXCESSIVE FEES.

Section 1322(c) of title 11, the United States Code, is amended--CommentsClose CommentsPermalink





(1) in paragraph (1) by striking ‘and’ at the end,CommentsClose CommentsPermalink





(2) in paragraph (2) by striking the period at the end and inserting a semicolon, andCommentsClose CommentsPermalink





(3) by adding at the end the following:CommentsClose CommentsPermalink





‘(3) the debtor, the debtor’s property, and property of the estate are not liable for a fee, cost, or charge that is incurred while the case is pending and arises from a debt that is secured by the debtor’s principal residence except to the extent that--CommentsClose CommentsPermalink





‘(A) the holder of the claim for such debt files with the court (annually or, in order to permit filing consistent with clause (ii), at such more frequent periodicity as the court determines necessary) notice of such fee, cost, or charge before the earlier of--CommentsClose CommentsPermalink





‘(i) 1 year after such fee, cost, or charge is incurred; orCommentsClose CommentsPermalink





‘(ii) 60 days before the closing of the case; andCommentsClose CommentsPermalink





‘(B) such fee, cost, or charge--CommentsClose CommentsPermalink





‘(i) is lawful under applicable nonbankruptcy law, reasonable, and provided for in the applicable security agreement; andCommentsClose CommentsPermalink





‘(ii) is secured by property the value of which is greater than the amount of such claim, including such fee, cost, or charge;CommentsClose CommentsPermalink





‘(4) the failure of a party to give notice described in paragraph (3) shall be deemed a waiver of any claim for fees, costs, or charges described in paragraph (3) for all purposes, and any attempt to collect such fees, costs, or charges shall constitute a violation of section 524(a)(2) or, if the violation occurs before the date of discharge, of section 362(a); andCommentsClose CommentsPermalink





‘(5) a plan may provide for the waiver of any prepayment penalty on a claim secured by the debtor’s principal residence.’.CommentsClose CommentsPermalink

SEC. 5. CONFIRMATION OF PLAN.

Section 1325(a) of title 11, the United States Code, is amended--CommentsClose CommentsPermalink





(1) in paragraph (8) by striking ‘and’ at the end,CommentsClose CommentsPermalink





(2) in paragraph (9) by striking the period at the end and inserting a semicolon, andCommentsClose CommentsPermalink





(3) by inserting after paragraph (9) the following:CommentsClose CommentsPermalink





‘(10) notwithstanding subclause (I) of paragraph (5)(B)(i), the plan provides that the holder of a claim whose rights are modified pursuant to section 1322(b)(11) retain the lien until the later of--CommentsClose CommentsPermalink





‘(A) the payment of such holder’s allowed secured claim; orCommentsClose CommentsPermalink





‘(B) discharge under section 1328; andCommentsClose CommentsPermalink





‘(11) the plan modifies a claim in accordance with section 1322(b)(11), and the court finds that such modification is in good faith.’.CommentsClose CommentsPermalink

SEC. 6. DISCHARGE.

Section 1328 of title 11, the United States Code, is amended--CommentsClose CommentsPermalink





(1) in subsection (a)--CommentsClose CommentsPermalink





(A) by inserting ‘(other than payments to holders of claims whose rights are modified under section 1322(b)(11)’ after ‘paid’ the 1st place it appears, andCommentsClose CommentsPermalink





(B) in paragraph (1) by inserting ‘or, to the extent of the unpaid portion of an allowed secured claim, provided for in section 1322(b)(11)’ after ‘1322(b)(5)’, andCommentsClose CommentsPermalink





(2) in subsection (c)(1) by inserting ‘or, to the extent of the unpaid portion of an allowed secured claim, provided for in section 1322(b)(11)’ after ‘1322(b)(5)’.CommentsClose CommentsPermalink

SEC. 7. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

(a) Effective Date- Except as provided in subsection (b), this Act and the amendments made by this Act shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink





(b) Application of Amendments- The amendments made by this Act shall apply with respect to cases commenced under title 11 of the United States Code before, on, or after the date of the enactment of this Act.CommentsClose CommentsPermalink