Date: 2009-03-05
Speaker: ZOE LOFGREN (democrat)
Chamber: H
State: California

Mr. Chairman. this important bill gives families whose home mortgages are in distress a better opportunity to come to terms with their lender. to bring their mortgage payments in line with prevailing lending rates in the lending market and with prevailing values in the housing market. This is the same opportunity that owners of vacation homes. investment properties. private jets. and luxury yachts have long enjoyed. I think its only fair that we offer it now to average families as well. The economic crisis engulfing this country and the world had its start in the housing foreclosure crisis. The Helping Families Save Their Homes Act will begin to address this underlying cause. and it will provide meaningful relief to struggling homeowners. In developing this legislation. we have benefited at every step of the way from constructive engagement from members on and off the. Judiciary Committee. from lenders and brokers. from consumer groups. from bankruptcy judges and trustees. With their help. weve reached consensus on a series of significant changes culminating in the managers amendment before us today. I should note that the amendment is the LofgrenTauscherCardoza amendment. and the changes that it encompasses make this a much better bill. Under the managers amendment. the homeowner must notify the lender. submit financial records and work in good faith for at least 30 days to try to modify a mortgage outside of the bankruptcy using the Obama mortgage modification plan outlined yesterday. We provide also that. should those efforts not prove fruitful and as a last resort an individual ends up in Chapter 13 proceedings. the court should utilize the Obama mortgage modification plan as a guideline for the court in reviewing and in helping a homeowner to meet obligations. We also have required that bankruptcy courts will use the FHA appraisal guidelines. repayment plans. and for equal monthly mortgage payments. If a homeowner sells a home while still under a Chapter 13 payment plan. the lender is going to share in the profit. and thats only fair. The closer in time of the mortgage modification. the greater the lenders share. and the managers amendment actually further increases the lenders share at each point over the period.. Homeowners who engage in bad faith. such as filing for bankruptcy when they could really afford to pay their mortgages. will be disqualified for assistance in chapter 13. and a special Justice Department task force is set up to investigate reports of possible mortgage fraud. These are in addition to improvements already made at earlier stages. The changes are all described in greater detail in a summary that was sent to all of your offices today. I have brought copies of a summary with me today. In short. we have sought to respond in a reasonable manner to every single concern brought to our attention. Weve achieved a balanced reform that will bring meaningful help to families in genuine need without costing taxpayers a dime. The bill is not going to usher in a rash of bankruptcy filings. In fact. by setting up a homeownerlender negotiating process that begins well before bankruptcy. it is designed to keep more families out of bankruptcy and out of foreclosure. The number of new chapter 13 mortgage modifications that may result will be far less than the number of foreclosures that will be prevented. and preventing foreclosures is the key. That will benefit not only homeowners and their families but also neighborhoods. their communities. their lenders. and the entire American economy. Its worth noting that any time there is a foreclosure. the average decline of property values for neighboring property is 9 percent. so this is importantto every American to avert these foreclosures. I thank Mrs. TAUSCHER. Mr. CARDOZA.