[House Report 111-23]
[From the U.S. Government Publishing Office]
111th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 111-23
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PROVIDING FOR FURTHER CONSIDERATION OF THE BILL (H.R. 1106) TO PREVENT
MORTGAGE FORECLOSURES AND ENHANCE MORTGAGE CREDIT AVAILABILITY
_______
March 4, 2009.--Referred to the House Calendar and ordered to be
printed
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Mr. Hastings of Florida, from the Committee on Rules, submitted the
following
R E P O R T
[To accompany H. Res. 205]
The Committee on Rules, having had under consideration
House Resolution 25, by a non-record vote, report the same to
the House with the recommendation that the resolution be
adopted.
SUMMARY OF PROVISIONS OF THE RESOLUTION
The resolution provides that amendment number 1 printed in
House Report 111-21 to be offered by Rep. John Conyers or his
designee shall be perfected by the modification printed in this
report.
SUMMARY OF MODIFICATION TO BE CONSIDERED AS ADOPTED
The modification would (1) allow a court to consider, in
lieu of reducing mortgage principal, lowering the interest rate
to reduce the debtor's mortgage payments according to the
Administration's Homeowner Affordability and Stability Plan as
implemented on March 4, 2009; (2) give the mortgage holder a
greater proportion of the appreciation in a home on a graduated
basis if it is sold during the 5-year period that the case is
pending; and (3) provide that when a debtor seeks to reduce a
mortgage's principal, the court must determine whether such
relief is in good faith based on whether debtor was offered a
mortgage modification under the Administration's plan and the
debtor was able to afford payments under such plan.
TEXT OF MODIFICATION TO BE CONSIDERED AS ADOPTED
After the instruction amending the table of contents of the
bill, insert the following (and make such technical and
conforming changes as may be appropriate):
Page 2, after line 6, insert the following (and make such
technical and conforming changes as may be appropriate):
SEC. 100. DEFINITION.
Section 101 of title 11, United States Code, is amended by
inserting after paragraph (43) the following (and make such
technical and conforming changes as may be appropriate):
``(43A) The term `qualified loan modification' means
a loan modification agreement made in accordance with
the guidelines of the Obama Administration's Homeowner
Affordability and Stability Plan as implemented March
4, 2009, that--
``(A) reduces the debtor's payment (including
principal and interest, and payments for real
estate taxes, hazard insurance, mortgage
insurance premium, homeowners' association
dues, ground rent, and special assessments) on
a loan secured by a senior security interest in
the principal residence of the debtor, to a
percentage of the debtor's income in accordance
with such guidelines, without any period of
negative amortization or under which the
aggregate amount of the regular periodic
payments would not fully amortize the
outstanding principal amount of such loan;
``(B) requires no fees or charges to be paid
by the debtor in order to obtain such
modification; and
``(C) permits the debtor to continue to make
payments under the modification agreement
notwithstanding the filing of a case under this
title, as if such case had not been filed.''.
Beginning on page 7, strike line 6 and all that follows
through line 16 on page 8, and insert the following:
``(1) if such residence is sold in the 1st year
occurring after the effective date of the plan, 90
percent of the amount of the difference between the
sales price and the amount of such claim as originally
determined under subsection (b)(11) (plus costs of sale
and improvements), but not to exceed the unpaid amount
of the allowed secured claim determined as if such
claim had not been reduced under such subsection;
``(2) if such residence is sold in the 2d year
occurring after the effective date of the plan, 70
percent of the amount of the difference between the
sales price and the amount of such claim as originally
determined under subsection (b)(11) (plus costs of sale
and improvements), but not to exceed the unpaid amount
of the allowed secured claim determined as if such
claim had not been reduced under such subsection;
``(3) if such residence is sold in the 3d year
occurring after the effective date of the plan, 50
percent of the amount of the difference between the
sales price and the amount of such claim as originally
determined under subsection (b)(11) (plus costs of sale
and improvements), but not to exceed the unpaid amount
of the allowed secured claim determined as if such
claim had not been reduced under such subsection;
``(4) if such residence is sold in the 4th year
occurring after the effective date of the plan, 30
percent of the amount of the difference between the
sales price and the amount of such claim as originally
determined under subsection (b)(11) (plus costs of sale
and improvements), but not to exceed the unpaid amount
of the allowed secured claim determined as if such
claim had not been reduced under such subsection; and
``(5) if such residence is sold in the 5th year
occurring after the effective date of the plan, 10
percent of the amount of the difference between the
sales price and the amount of such claim as originally
determined under subsection (b)(11) (plus costs of sale
and improvements), but not to exceed the unpaid amount
of the allowed secured claim determined as if such
claim had not been reduced under such subsection.''.
Strike the 1st instruction to amend page 9 of the bill and
strike the amendment proposed to be inserted after line 19 on
page 9 of the bill.
Strike the instruction to amend page 11 of the bill and all
the text that follows through the amendment to page 12 of the
bill, and insert the following (and make such technical and
conforming changes as may be appropriate):
Page 11, strike lines 23 through 25, insert the following
(and make such technical and conforming changes as may be
appropriate):
(1) in the matter preceding paragraph (1) strike
``subsection (b)'' and insert ``subsections (b) and
(d)''.
(2) in paragraph (5)--
(A) by inserting ``except as otherwise
provided in section 1322(b)(11),'' after
``(5)'', and
(B) in subparagraph (B)(iii)(I) by inserting
``(including payments of a claim modified under
section 1322(b)(11))'' after ``payments'' the
1st place it appears,
Page 12, line 20, insert the following after ``faith'':
(Lack of good faith exists if the debtor has no need
for relief under this paragraph because the debtor can
pay all of his or her debts and any future payment
increases on such debts without difficulty for the
foreseeable future, including the positive amortization
of mortgage debt. In determining whether a reduction of
the principal amount of loan resulting from a
modification made under the authority of section
1322(b)(11) is made in good faith, the court shall
consider whether the holder of such claim (or the
entity collecting payments on behalf of such holder)
has offered to the debtor a qualified loan modification
that would enable the debtor to pay such debts and such
loan without reducing such principal amount.)''.
Page 12, after line 24, insert the following (and make such
technical and conforming changes as may be appropriate):
(b) Section 1325 of title 11, United States Code, is amended
by adding at the end the following (and make such technical and
conforming changes as may be appropriate):
``(d) Notwithstanding section 1322(b)(11)(C)(ii), the court,
on request of the debtor or the holder of a claim secured by a
senior security interest in the debtor's principal residence,
may confirm a plan proposing a reduction in the interest rate
on the loan secured by such security interest and that does not
reduce the principal, provided the total monthly mortgage
payment is reduced to a percentage of the debtor's income in
accordance with the guidelines of the Obama Administration's
Homeowner Affordability and Stability Plan as implemented March
4, 2009, if, taking into account the debtor's financial
situation, after allowance of expenses that would be permitted
for a debtor under this chapter subject to paragraph (3) of
subsection (b), regardless of whether the debtor is otherwise
subject to such paragraph, and taking into account additional
debts and fees that are to be paid in this chapter and
thereafter, the debtor would be able to prevent foreclosure and
pay a fully amortizing 30-year loan at such reduced interest
rate without such reduction in principal.''.