Emergency Homeownership and Equity Protection Act - Amends federal bankruptcy law governing a Chapter 13 debtor (adjustment of debts of an individual with regular income). Excludes from computation of debts the secured or unsecured portions of: (1) debts secured by the debtor's principal residence if the current value of that residence is less than the secured debt limit; or (2) debts secured or formerly secured by debtor's principal residence that was either sold in foreclosure or surrendered to the creditor if the current value of such real property is less than the secured debt limit.
Declares the credit counseling requirement inapplicable to a Chapter 13 debtor who certifies that he or she has received notice that the holder of a claim secured by the debtor's principal residence may commence a foreclosure on the debtor's principal residence.
Allows modification of the rights of claim holders, in the event of a foreclosure notice for a chapter 13 debtor, among other means by: (1) reducing a claim to equal the value of the debtor's interest in the residence securing such claim, and any adjustments to a related adjustable rate of interest; (2) waiving early repayment or prepayment penalties; and (3) extending the repayment period.
Denies debtor liability for certain fees and charges incurred while the bankruptcy case is pending and arising from a debt secured by the debtor's principal residence, unless the claim holder observes specified requirements.
Adds to conditions for court confirmation of a plan in bankruptcy that: (1) the holder of a claim secured by the debtor's principal residence retain the lien securing the claim until the later of the payment of such claim as reduced and modified or the discharge of a debtor from all debts; and (2) the plan modifies the claim in good faith.
Excludes from final discharge of a debtor from all debts: (1) any payments to claim holders whose rights are modified under this Act; and (2) any unpaid portion of a claim as reduced.
[Congressional Bills 111th Congress]
[From the U.S. Government Printing Office]
[H.R. 225 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 225
To amend title 11 of the United States Code with respect to
modification of certain mortgages on principal residences, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 7, 2009
Mr. Miller of North Carolina (for himself, Ms. Linda T. Sanchez of
California, Mr. Frank of Massachusetts, Mr. Watt, Mr. Ellison, Ms. Lee
of California, Mr. Courtney, Mr. Blumenauer, Mrs. Christensen, Ms.
Eddie Bernice Johnson of Texas, Mr. Butterfield, Mr. Grijalva, Ms.
Jackson-Lee of Texas, Mr. Sires, Mr. Capuano, Mr. Hinchey, Mr. George
Miller of California, Mr. Stark, Mr. Johnson of Georgia, Mr. Davis of
Alabama, Mr. Van Hollen, Ms. Wasserman Schultz, Mr. Cohen, Ms. Edwards
of Maryland, and Mr. Lewis of Georgia) introduced the following bill;
which was referred to the Committee on the Judiciary
_______________________________________________________________________
A BILL
To amend title 11 of the United States Code with respect to
modification of certain mortgages on principal residences, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Emergency Homeownership and Equity
Protection Act''.
SEC. 2. ELIGIBILITY FOR RELIEF.
Section 109 of title 11, United States Code, is amended--
(1) by adding at the end of subsection (e) the following:
``For purposes of this subsection, the computation of debts
shall not include the secured or unsecured portions of--
``(1) debts secured by the debtor's principal residence if
the current value of that residence is less than the secured
debt limit; or
``(2) debts secured or formerly secured by real property
that was the debtor's principal residence that was sold in
foreclosure or that the debtor surrendered to the creditor if
the current value of such real property is less than the
secured debt limit.''; and
(2) by adding at the end of subsection (h) the following:
``(5) The requirements of paragraph (1) shall not apply in a case
under chapter 13 with respect to a debtor who submits to the court a
certification that the debtor has received notice that the holder of a
claim secured by the debtor's principal residence may commence a
foreclosure on the debtor's principal residence.''.
SEC. 3. AUTHORITY TO MODIFY CERTAIN MORTGAGES.
Section 1322(b) of title 11, United States Code, is amended--
(1) by redesignating paragraph (11) as paragraph (12),
(2) in paragraph (10) by striking ``and'' at the end, and
(3) by inserting after paragraph (10) the following:
``(11) notwithstanding paragraph (2) and otherwise
applicable nonbankruptcy law, with respect to a claim for a
loan made before the date of the enactment of the Emergency
Homeownership and Equity Protection Act secured by a security
interest in the debtor's principal residence that is the
subject of a notice that a foreclosure may be commenced, modify
the rights of the holder of such claim--
``(A) by providing for payment of the amount of the
allowed secured claim as determined under section
506(a)(1);
``(B) if any applicable rate of interest is
adjustable under the terms of such security interest by
prohibiting, 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 conditions 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, beginning on the date of the
order for relief under this chapter; and
``(ii) to provide for the payment of
interest accruing after the date of the order
for relief under this chapter at an annual
percentage rate calculated at a fixed annual
percentage rate, in an amount equal to the then
most recently published annual yield on
conventional mortgages published by the Board
of Governors of the Federal Reserve System, as
of the applicable time set forth in the rules
of the Board, plus a reasonable premium for
risk; and
``(D) by providing for payments of such modified
loan directly to the holder of the claim; and''.
SEC. 4. COMBATING EXCESSIVE FEES.
Section 1322(c) of title 11, the United States Code, is amended--
(1) in paragraph (1) by striking ``and'' at the end,
(2) in paragraph (2) by striking the period at the end and
inserting a semicolon, and
(3) by adding at the end the following:
``(3) the debtor, the debtor's property, and property of
the estate are not liable for a fee, cost, or charge that is
incurred while the case is pending and arises from a debt that
is secured by the debtor's principal residence except to the
extent that--
``(A) the holder of the claim for such debt files
with the court (annually or, in order to permit filing
consistent with clause (ii), at such more frequent
periodicity as the court determines necessary) notice
of such fee, cost, or charge before the earlier of--
``(i) 1 year after such fee, cost, or
charge is incurred; or
``(ii) 60 days before the closing of the
case; and
``(B) such fee, cost, or charge--
``(i) is lawful under applicable
nonbankruptcy law, reasonable, and provided for
in the applicable security agreement; and
``(ii) is secured by property the value of
which is greater than the amount of such claim,
including such fee, cost, or charge;
``(4) the failure of a party to give notice described in
paragraph (3) shall be deemed a waiver of any claim for fees,
costs, or charges described in paragraph (3) for all purposes,
and any attempt to collect such fees, costs, or charges shall
constitute a violation of section 524(a)(2) or, if the
violation occurs before the date of discharge, of section
362(a); and
``(5) a plan may provide for the waiver of any prepayment
penalty on a claim secured by the debtor's principal
residence.''.
SEC. 5. CONFIRMATION OF PLAN.
Section 1325(a) of title 11, the United States Code, is amended--
(1) in paragraph (8) by striking ``and'' at the end,
(2) in paragraph (9) by striking the period at the end and
inserting a semicolon, and
(3) by inserting after paragraph (9) the following:
``(10) notwithstanding subclause (I) of paragraph
(5)(B)(i), the plan provides that the holder of a claim whose
rights are modified pursuant to section 1322(b)(11) retain the
lien until the later of--
``(A) the payment of such holder's allowed secured
claim; or
``(B) discharge under section 1328; and
``(11) the plan modifies a claim in accordance with section
1322(b)(11), and the court finds that such modification is in
good faith.''.
SEC. 6. DISCHARGE.
Section 1328 of title 11, the United States Code, is amended--
(1) in subsection (a)--
(A) by inserting ``(other than payments to holders
of claims whose rights are modified under section
1322(b)(11)'' after ``paid'' the 1st place it appears,
and
(B) in paragraph (1) by inserting ``or, to the
extent of the unpaid portion of an allowed secured
claim, provided for in section 1322(b)(11)'' after
``1322(b)(5)'', and
(2) in subsection (c)(1) by inserting ``or, to the extent
of the unpaid portion of an allowed secured claim, provided for
in section 1322(b)(11)'' after ``1322(b)(5)''.
SEC. 7. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as provided in subsection (b), this Act
and the amendments made by this Act shall take effect on the date of
the enactment of this Act.
(b) Application of Amendments.--The amendments made by this Act
shall apply with respect to cases commenced under title 11 of the
United States Code before, on, or after the date of the enactment of
this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on the Judiciary.
Committee Hearings Held.
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