HR 1106 RFS 
‘‘(2) debts secured or formerly secured by what 
was the debtor’s principal residence that was sold in 
foreclosure or that the debtor surrendered to the 
creditor if the value of such real property as of the 
date of the order for relief under chapter 13 was less 
than the applicable maximum amount of noncontin-
gent, liquidated, secured debts specified in this sub-
section.’’, and 
(2) by adding at the end of subsection (h) the 
following: 
‘‘(5) Notwithstanding the 180-day period speci-
fied in paragraph (1), with respect to a debtor in a 
case under chapter 13 who submits to the court a 
certification that the debtor has received notice that 
the holder of a claim secured by the debtor’s prin-
cipal residence may commence a foreclosure on the 
debtor’s principal residence, the requirements of 
paragraph (1) shall be considered to be satisfied if 
the debtor satisfies such requirements not later than 
the expiration of the 30-day period beginning on the 
date of the filing of the petition.’’. 
SEC. 102. PROHIBITING CLAIMS ARISING FROM VIOLA-
TIONS OF THE TRUTH IN LENDING ACT. 
Section 502(b) of title 11, United States Code, is 
amended— 
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(1) in paragraph (8) by striking ‘‘or’’ at the 
end, 
(2) in paragraph (9) by striking the period at 
the end and inserting ‘‘; or’’, and 
(3) by adding at the end the following: 
‘‘(10) the claim for a loan secured by a security 
interest in the debtor’s principal residence is subject 
to a remedy for rescission under the Truth in Lend-
ing Act notwithstanding the prior entry of a fore-
closure judgment, except that nothing in this para-
graph shall be construed to modify, impair, or super-
sede any other right of the debtor.’’. 
SEC. 103. AUTHORITY TO MODIFY CERTAIN MORTGAGES. 
Section 1322 of title 11, United States Code, is 
amended— 
(1) in subsection (b)— 
(A) by redesignating paragraph (11) as 
paragraph (12), 
(B) in paragraph (10) by striking ‘‘and’’ at 
the end, and 
(C) by inserting after paragraph (10) the 
following: 
‘‘(11) notwithstanding paragraph (2), with re-
spect to a claim for a loan originated before the ef-
fective date of this paragraph and secured by a secu-
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rity interest in the debtor’s principal residence that 
is the subject of a notice that a foreclosure may be 
commenced with respect to such loan, modify the 
rights of the holder of such claim (and the rights of 
the holder of any claim secured by a subordinate se-
curity interest in such residence)— 
‘‘(A) by providing for payment of the 
amount of the allowed secured claim as deter-
mined under section 506(a)(1); 
‘‘(B) if any applicable rate of interest is 
adjustable under the terms of such loan by pro-
hibiting, reducing, or delaying adjustments to 
such rate of interest applicable on and after the 
date of filing of the plan; 
‘‘(C) by modifying the terms and condi-
tions of such loan— 
‘‘(i) to extend the repayment period 
for a period that is no longer than the 
longer of 40 years (reduced by the period 
for which such loan has been outstanding) 
or the remaining term of such loan, begin-
ning on the date of the order for relief 
under this chapter; and 
‘‘(ii) to provide for the payment of in-
terest accruing after the date of the order 
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for relief under this chapter at a fixed an-
nual rate equal to the currently applicable 
average prime offer rate as of the date of 
the order for relief under this chapter, cor-
responding to the repayment term deter-
mined under the preceding paragraph, as 
published by the Federal Financial Institu-
tions Examination Council in its table enti-
tled ‘Average Prime Offer Rates—Fixed’, 
plus a reasonable premium for risk; and 
‘‘(D) by providing for payments of such 
modified loan directly to the holder of the claim 
or, at the discretion of the court, through the 
trustee during the term of the plan; and’’, and 
(2) by adding at the end the following: 
‘‘(g) A claim may be reduced under subsection 
(b)(11)(A) only on the condition that if the debtor sells 
the principal residence securing such claim, before com-
pleting all payments under the plan (or, if applicable, be-
fore receiving a discharge under section 1328(b)) and re-
ceives net proceeds from the sale of such residence, then 
the debtor agrees to pay to such holder not later than 15 
days after receiving such proceeds— 
‘‘(1) if such residence is sold in the 1st year oc-
curring after the effective date of the plan, 90 per-
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