079–008 

111TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 111–23 

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 

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. 


rfrederick on PROD1PC67 with HEARING
2 

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; 


rfrederick on PROD1PC67 with HEARING
3 

‘‘(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 


rfrederick on PROD1PC67 with HEARING
4 

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.’’. 

Æ 


rfrederick on PROD1PC67 with HEARING