WashingtonWatch.com - H.R. 200, The Helping Families Save Their Homes in Bankruptcy Act of 2009

Comment by Dana - MN (March 31, 2009, 01:00:00)

Tue, 31 Mar 2009 00:00:00 EDT

In September of 2008, I proposed a very simple solution to state and national government 'officials' that would have: 1) Elimated need for much of the current legislation 2) Reduced the speed and amount home price reductions 3) Reduced the amount of money banks have tied up in fear and reserves 4) Reduced the number of people entering foreclosure 5) Elimated the need for much of or all of the mortgage related bail out money being thrown away to all of the short sighted and mismanged lenders 6) Reduced the need for government intervention in the housing market 7) Encouraged and make possible more new loans 8) Relax underwriting guidelines to allow borrowers that qualify for repayment to actually obtain loans Neither Republicans or Democrats wanted anything to do with it. Democrats slowest in responding or in the case of MN Rep Jeremy Kahlin, did not respond to my dozen attempts to contact him....

Comment by Dana - MN (March 31, 2009, 01:00:00)

Tue, 31 Mar 2009 00:00:00 EDT

How do we the people protect our homes values from lenders that are dumping inventory at 50% of the price they told us it was worth not 3 years ago? I have only purchase money into my home. I pulled nothing out of it, the banks are shorting my value and being reimbursed for this irresponsible action at my expense! H.R. 200 better pass WITHOUT excessive compromise or you Americans that defend the corperate protectionism are bigger idiots than the French have indicated, think about it!...

Comment by Jim C (March 31, 2009, 01:00:00)

Tue, 31 Mar 2009 00:00:00 EDT

The only thing that needs to be done is to remove the exception which unduly allows privilege to lenders making bad and predatory loans which are not modifiable at present. There is no benefit in watering down this legislation into ineffectiveness by adding undue complications and exceptions to a law which could have been simply accomplished by removing the exception that is presently leading to unmodifiable loans and the great amount of foreclosures....

Revision by webmaster (March 16, 2009, 01:00:00)

Mon, 16 Mar 2009 00:00:00 EDT

H.R. 200 would amend title 11 of the United States Code with respect to modification of certain mortgages on principal residences.

Detailed Summary

Helping Families Save their Homes in Bankruptcy Act of 2009 - (Sec. 1) 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 a 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.

(Sec. 2) 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.

(Sec. 3) Requires the court to disallow a claim for a loan secured by a security interest in the debtor's principal residence that is subject to remedy for damages or rescission due to violations of the Truth in Lending Act, notwithstanding prior entry of a foreclosure judgment. Prohibits construction of such disallowance to modify, impair, or supersede any other right of the debtor.

(Sec. 4) Allows modification of claim holders' rights in connection with a foreclosure notice for a chapter 13 debtor whose loan originated before the effective date of this Act. Allows changing an adjustable rate of interest to a fixed rate, and extending the repayment period.

Prescribes conditions for reducing a claim under this Act if the debtor receives net proceeds from the sale of the principal residence before receiving a discharge in bankruptcy.

Establishes requirements for modification of other kinds of claims for a loan secured by a security interest in the debtor's principal residence.

(Sec. 5) 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.

(Sec. 6) Adds to conditions for court confirmation of a plan in bankruptcy that: (1) the holder of a claim for a loan 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 and the court finds that the debtor did not obtain the modified claim by the debtor's material misrepresentation, false pretenses, or actual fraud.

(Sec. 7) 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.

(Sec. 8) Prohibits the construction of this Act to modify any obligation of the Federal Housing Administration (FHA), the Veterans Administration (VA), or the Department of Agriculture under a contract that guarantees or insures payment of a loan secured by a security interest in a principal residence.

Status of the Legislation

Latest Major Action: 2/24/2009: Placed on the Union Calendar, Calendar No. 7.

Points in Favor

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Points Against

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Comment by Sydney (March 6, 2009, 01:00:00)

Fri, 06 Mar 2009 00:00:00 EST

Yeah, i am I agree with you Thomas that this bill does not reduce profitability of the repayment of the loans. It simply reduces the negative impact that those who feel that contractual conditions outweigh the basic true meaning of the country. The aim is to promote a better life for many to obtain from hard work. Not reward those who simply intended to rake in excessive profits off the backs of Americans. A fair loan which provides cash flow instead of a failing loan which clogs out courts with judgments, foreclosures, lob losses and the collapse of world economies could be reversed by allowing Americans to pay fair prices back to recover principal and also bring back reasonable interest returns. Great post i look forward to reading more Sydney Real Estate Search...

Comment by Jim (March 5, 2009, 01:00:00)

Thu, 05 Mar 2009 00:00:00 EST

Right now another bill HR 1106 is being pushed through congress. The initial legislation is pretty much as this bill except it also has incentives for servicers regarding protection from investor lawsuits along with partial payments to lenders for modified loans to offset the reduction. The negative thing about the new bill is an ammendment 1 which adds all sorts of obstacles to the bill. It is proposed by the author of this bill. It is similar in disabling true kelp as this bill is with the ing amendment. If it passes, you will have to prove that you attempted to unsuccessfully pursue a modification with your present lender at least 30 days before filing. Additional obstacles are also proposed by the diluting amendment. ...

Comment by Jim (March 3, 2009, 01:00:00)

Tue, 03 Mar 2009 00:00:00 EST

I agree with you Thomas that this bill does not reduce profitability of the repayment of the loans. It simply reduces the negative impact that those who feel that contractual conditions outweigh the basic true meaning of the country. The aim is to promote a better life for many to obtain from hard work. Not reward those who simply intended to rake in excessive profits off the backs of Americans. A fair loan which provides cash flow instead of a failing loan which clogs out courts with judgments, foreclosures, lob losses and the collapse of world economies could be reversed by allowing Americans to pay fair prices back to recover principal and also bring back reasonable interest returns....

Comment by Monica MacGregor (March 3, 2009, 01:00:00)

Tue, 03 Mar 2009 00:00:00 EST

I hope this bill passes. It would a dream come true for me. Does anybody know where it stands now....

Comment by shelly (March 2, 2009, 01:00:00)

Mon, 02 Mar 2009 00:00:00 EST

Sabrina, I totally agree and hope it will be this week. Does anyone know for sure? I am following so many diffrent blogs I have no idea when they are suppose to vote...

Comment by thomas alund (February 28, 2009, 01:00:00)

Sat, 28 Feb 2009 00:00:00 EST

the banks will sill earn interest on this bill. No one is telling them to not make any money off the loan.All this bill is saying is, that the homeowner is going to pay back the loan with a reasonable amount of interest.Only greed would be a motive for them to be against this! Doesn't anyone else agree with this?...

Comment by Sabrina (February 28, 2009, 01:00:00)

Sat, 28 Feb 2009 00:00:00 EST

For so many families in California, like mine, impacted by the resetting of loans, the devaluation of family homes by 50%, and throw in a job loss or some other family crisis, chpater 13 is the ONLY viable choice to retain family homes. PASS THIS BILL!! I hope and pray for enough support for this to be passed soon.......

Comment by Lar (February 27, 2009, 01:00:00)

Fri, 27 Feb 2009 00:00:00 EST

Plain and simple... Pass this Bill ! Lets give families a real reason to save their homes and get this economy back and running. The sooner we fix these problems...the sooner we get out of them. Doing nothing gets nothing done !...

Comment by Jim (February 25, 2009, 01:00:00)

Wed, 25 Feb 2009 00:00:00 EST

HR 1106 will be addressed the 26th in the house. It contains HR 200 without the King flaw and also addresses a few other homeowner help measures which should help those trying to get modifications through their servicer. A safe Harbor for the servicers should give no excuses why servicers cannot modify the loan terms since they will be protected from investor lawsuits....

Revision by webmaster (February 25, 2009, 01:00:00)

Wed, 25 Feb 2009 00:00:00 EST

H.R. 200 would amend title 11 of the United States Code with respect to modification of certain mortgages on principal residences.

Detailed Summary

Helping Families Save their Homes in Bankruptcy Act of 2009 - 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.

Requires the court to disallow a claim that is subject to any remedy for damages or rescission due to violations of state or federal consumer protection law, including the Truth in Lending Act, notwithstanding the prior entry of a foreclosure judgment.

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: 2/24/2009: Placed on the Union Calendar, Calendar No. 7.

Points in Favor

(Log in to edit the wiki and be the first to show why the bill should pass!)

Points Against

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Comment by Terrence (February 24, 2009, 01:00:00)

Tue, 24 Feb 2009 00:00:00 EST

The bill needs to pass! Most homeowners who unfortunately purchased at the wrong time during a solid market now have no options (unless they were speculators) whom cashed in. The reality is that most folks are beyond 5% UPSIDE down and if you happen to be on an INTEREST ONLY loan, you'll never get out of the problem; hence when the loan reset after the fixed period, such as 5-10 years, the loan would end up in default anyways, because the lending guidelines of 80% LTV won't be met, the value may have subsided some, but the RESET will still happen! LETS GET THIS BILL PASSED AND MOVE ON WITH OUR LOSSES BESIDES JUST THE BANKS GETTING OUR FUNDS!!!...

Status as of February 24, 2009

Tue, 24 Feb 2009 00:00:00 EST

2/24/2009: Placed on the Union Calendar, Calendar No. 7.

Comment by jeff (February 20, 2009, 01:00:00)

Fri, 20 Feb 2009 00:00:00 EST

The reality is the lenders do not want a judge to see these inproper truth in lending abuses, when the judges see this .law suits , could very well take place...

Comment by cline (February 18, 2009, 01:00:00)

Wed, 18 Feb 2009 00:00:00 EST

thank god! Lets get this bill pass and change foreclosures into performing loans!...

Comment by Shelly (February 18, 2009, 01:00:00)

Wed, 18 Feb 2009 00:00:00 EST

I will believe the modifications when i see them....Like I said before I have been trying for 4 months to get my loan info straightened out. I don't believe these banks will modify the loans like they should and people will be forced into chpt 13 bankruptcy like myself. I would wish this upon no one...Letters to 3 state reps. and no response...hopefully a judge will be able to help me. Can it get any worse?...

Comment by Jim (February 11, 2009, 01:00:00)

Wed, 11 Feb 2009 00:00:00 EST

I agree that most of the loans which were based on income that did not exist initially already have failed and losses were already accounted for. Most of the loans which people are having trouble with now are after reset increases which usually amount to many hundreds of dollar increases which overshoot the person's income capability. Interesting account for the BK judges decision related to the stated income loan....

Comment by Jim (February 10, 2009, 01:00:00)

Tue, 10 Feb 2009 00:00:00 EST

As a note, I heard that some amendments are being proposed which would disadvantage homeowners but keep lenders in the clear on some stated income loans. Most loans are not stated I imagine and if they were, no amendment needs added if the income still was not enough to afford the home with a modification. The clowns in DC always muddy legislation to the point of ineffectiveness. Laws should be written to serve a purpose and not canceled by amendments....

Comment by Glenn Calsada, Esq. (February 10, 2009, 01:00:00)

Tue, 10 Feb 2009 00:00:00 EST

Recently, I read a bankruptcy judge\'s opinion denying a \"stated income\" lender an exception to discharge based on the borrower\'s fraud in obtaining the loan. The judge ruled that the lender in that case never bothered to verify the borrower\'s income and relied solely on the home\'s equity in deciding to lend. In this sense, a fraud exception from the cram down provisions would be a windfall for \"no doc\" or \"low doc\" lenders who relied primarily on the home\'s equity in their lending decisions. In any event, the adjustable rates mortgages were never tied to the borrower\'s income at the time of the loan transaction and that is often the cause for an inability to pay. I would venture to say that little to no \"first payment default\" borrowers are left anyway, having lost their homes to foreclosure by now....

Comment by Jim (February 9, 2009, 01:00:00)

Mon, 09 Feb 2009 00:00:00 EST

Shelly, I wonder what the delay is also. The reason for the delay pre-november 2008 was an unwilling Administration and a marginal majority in Congress for the 110th Congress. HR 3609 was stalled back from late 2007. Now on Feb 9th 2009 the legislation was introduced in January but put aside for HR 1 which does not even address the problem causing our economy from faltering. Many that have attempted to work with modifying their loans realize that it is not an easily obtained and sometimes only a stalling tactic to collect fees before foreclosure. Without allowing judges the ability to modify the loans, lenders/servicers will continue to fade our municipalities and economy along with the major problem of displacing homeowners from their places to raise families....

Comment by shelly (February 8, 2009, 01:00:00)

Sun, 08 Feb 2009 00:00:00 EST

Why are the banks letting it come to this. As a homeowner, I have found myself in a situation I have tryed and tryed to get the bank to work with me. Information they have does not match mine. Lived in same home for 15yrs, FIRST time ever fell behind. Cannot even get to a supervisor. I have sent notorized bank statements and letters and these are still ignored??? Allowing a Judge the ability to help me modify my loan, sounds like a gift from God. Maybe these banks will actually try to work with customers. What are they waiting for.....can't wait for this to pass....

Comment by Jim (February 4, 2009, 01:00:00)

Wed, 04 Feb 2009 00:00:00 EST

Glenn, I agree with most of what you say about housing and chapter 13. The secured car loans require full payment because of a law referred to as 910, (2.5 years) Allowing judges the ability to modify the home loans is far more important than the 2005 BAPCPA fiasco which messes up car loans. The loans will be safer since lenders will now have no protection against marketing loans to people that lead to overall insolvency. The last action on this bill was awhile back. Did Congress go home already? Passing this legislation would do more to give incentive to servicers and lenders to actually modify loans instead of stalling them into foreclosure. Also it would help those in chapter 13 plans to meet the five year obligation of all disposable income would go to pay off the unsecured portion of the debt alongside the other unsecured creditors....