HOUSE COMMITTEE TO CONSIDER ALLOWING MORTGAGE CHANGES

December 12, 2007

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The House Judiciary Committee will hold a mark-up hearing today on a bill that would allow bankruptcy judges to modify certain home mortgages and on legislation addressing a judicial pay raise. The committee yesterday reached an agreement on H.R. 3609, the “Emergency Home Ownership and Mortgage Equity Protection Act of 2007,” to limit the bill to subprime or nontraditional loans that are in foreclosure or at least 60 days overdue and would also give a bankruptcy judge the discretion to determine whether the debtor has insufficient income to pay the mortgage and if a loan modification should be made.

If this bill is ultimately passed by Congress and becomes law, people with problem mortgages such as adjustable rate mortgages will have real relief available to them under Chapter 13; a bankruptcy judge would be able to change the interest rate, make an adjustable loan into a fixed rate loan, and extend the term. This is what the U.S. needs to help us make it through this “subprime crisis.”

House Committee To Consider Allowing Mortgage Changes