Saturday, October 1, 2011

Conyers Introduces Legislation Providing Real Relief for Homeowners Facing Foreclosure

Contact: Nicole Triplett, 202-226-5543                                                                                  

Conyers Introduces Legislation Providing Real Relief for Homeowners Facing Foreclosure
Puts Bankruptcy Judges – Instead of Lenders – In Charge of Modifying Mortgages

(Washington)—Today, House Judiciary Committee Ranking Member John Conyers, Jr. (D-Mich.) introduced the “Home Foreclosure Reduction Act of 2011,” a bill that would allow certain home mortgages to be modified by a bankruptcy judge.

“I believe this bill offers the only real solution to the ongoing home mortgage foreclosure crisis,” said Conyers.  “Since the foreclosure crisis began nearly four years ago, every program and legislative initiative to date has relied on the lender’s willingness to modify the terms of a mortgage.  These are the very same lenders who are largely to blame for causing this crisis through their profligate lending practices.  And, they are responsible for exacerbating the crisis by filing fraudulent documents in their efforts to force through foreclosures.”
“It’s therefore not the least bit surprising that these voluntary programs and initiatives have largely failed.  But my legislation provides a straightforward and meaningful solution.”       

“Where a homeowner is facing foreclosure on his or her principal residence, the bill allows a bankruptcy judge to modify the mortgage if the homeowner meets specified criteria. Under current law, virtually every other secured claim – except a home mortgage – may be judicially modified, including claims secured by vacation homes, family farms, and investment properties in a bankruptcy case.”

The bill corrects these problems by:
·         allowing the principal amount of an underwater mortgage to be adjusted to the fair market value of the home, which will encourage homeowners to make their mortgage payments and help stop the endless cycle of foreclosures further depressing home values; 
·         permitting the mortgage’s repayment period to be extended so that monthly mortgage payments are more affordable;    
·         allowing exorbitant mortgage interest rates to be reduced to a level that will keep the mortgage affordable over the long-term;
·         waiving of prepayment penalties and excessive fees;
·         eliminating hidden fees and unauthorized costs to be eliminated.   

“This legislation is identical to provisions included in H.R. 1106, the ‘Helping Families Save Their Homes Act,’ that the House passed in March 2009.”

“Detroit homeowners in financial distress know all too well that relying on the industry to fix the foreclosure crisis is not the solution.  The time for meaningful action is now.  I hope you will join me in supporting the Home Foreclosure Reduction Act of 2011.” 

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