LINDA SÁNCHEZ APPLAUDS JUDICIARY COMMITTEE PASSAGE OF MORTGAGE BANKRUPTCY BILL
December 12, 2007
WASHINGTON, DC -- Congresswoman Linda Sánchez (D-Lakewood) applauded the passage today of H.R. 3609, the “Emergency Home Ownership and Mortgage Protection Act,” by the House Judiciary Committee. H.R. 3609, sponsored by Reps. Sánchez and Brad Miller (D-NC), would give bankruptcy judges the ability to restructure home mortgage debt in chapter 13 bankruptcy cases, a form of bankruptcy relief whereby individuals can restructure their debts.
“Today we acted in a bipartisan manner to find relief for families being crushed by the mortgage meltdown,” Congresswoman Linda Sánchez said. “We’re providing a way for families to stay in their homes during bankruptcy, that will preserve neighborhood home values, protect the American dream of homeownership, and ensure our Nation’s economic stability.”
Today’s action by the Committee included the adoption of compromise provisions that resulted from negotiations between Judiciary Committee Chairman John Conyers (D-Mich.), Rep. Steve Chabot (R-Ohio), and Rep. Sánchez. The compromise provisions narrowed the scope of the legislation to make it expire after seven years and ensure that it provides relief to those homeowners most in need.
“This legislation will help hundreds of thousands of families facing foreclosure,” Rep. Sánchez said. “To prevent anyone from gaming the system, we’ve targeted this bill to subprime and non-traditional loans and included other safeguards to ensure that we’re helping those who need it, not people who just bought too much house.”
The bill passed by the House Judiciary Committee today will only apply to subprime and nontraditional home loans, such as interest-only loans, that were originated between 2000 and the enactment of the bill. It gives bankruptcy judges in chapter 13 cases the authority to restructure home mortgage debt by extending the repayment period, setting aside excessive fees charged by unscrupulous mortgage lenders, modifying the principal amount of the mortgage to reflect the home’s actual value, and reducing exorbitant mortgage interest rates.
“Today we acted in a bipartisan manner to find relief for families being crushed by the mortgage meltdown,” Congresswoman Linda Sánchez said. “We’re providing a way for families to stay in their homes during bankruptcy, that will preserve neighborhood home values, protect the American dream of homeownership, and ensure our Nation’s economic stability.”
Today’s action by the Committee included the adoption of compromise provisions that resulted from negotiations between Judiciary Committee Chairman John Conyers (D-Mich.), Rep. Steve Chabot (R-Ohio), and Rep. Sánchez. The compromise provisions narrowed the scope of the legislation to make it expire after seven years and ensure that it provides relief to those homeowners most in need.
“This legislation will help hundreds of thousands of families facing foreclosure,” Rep. Sánchez said. “To prevent anyone from gaming the system, we’ve targeted this bill to subprime and non-traditional loans and included other safeguards to ensure that we’re helping those who need it, not people who just bought too much house.”
The bill passed by the House Judiciary Committee today will only apply to subprime and nontraditional home loans, such as interest-only loans, that were originated between 2000 and the enactment of the bill. It gives bankruptcy judges in chapter 13 cases the authority to restructure home mortgage debt by extending the repayment period, setting aside excessive fees charged by unscrupulous mortgage lenders, modifying the principal amount of the mortgage to reflect the home’s actual value, and reducing exorbitant mortgage interest rates.