[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3778 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3778

To authorize bankruptcy courts to take certain actions with respect to 
         mortgage loans in bankruptcy, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 9, 2007

  Mr. Chabot introduced the following bill; which was referred to the 
                       Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
To authorize bankruptcy courts to take certain actions with respect to 
         mortgage loans in bankruptcy, 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 ``Home Owners Mortgage and Equity 
Savings Act'' or ``HOMES Act''.

SEC. 2. AUTHORITY TO MODIFY CERTAIN MORTGAGES.

     Section 1322(b) of title 11, United States Code, is amended--
            (1) in paragraph (2), by inserting ``except as provided in 
        paragraph (11),'' after ``residence,'';
            (2) by redesignating paragraph (11) as paragraph (12);
            (3) in paragraph (10), by striking ``and'' at the end; and
            (4) by inserting after paragraph (10) the following:
            ``(11) with respect to a claim secured by a security 
        interest in real property initiated before September 26, 2007, 
        that is the debtor's principal residence, if the current 
        monthly income of the debtor and the debtor's spouse combined, 
        when multiplied by 12, is less than, in the case of a debtor in 
        a household of 1 person, 150 percent of the median family 
        income of the applicable State for 1 earner, in the case of a 
        debtor in a household of 2, 3, or 4 individuals, the highest 
        median family income of the applicable State for a family of 
        the same number or fewer individuals, or in the case of a 
        debtor in a household exceeding 4 individuals, the highest 
        median family income of the applicable State for a family of 4 
        or fewer individuals, plus $525 per month for each individual 
        in excess of 4--
                    ``(A) modify the rights of any holder of such claim 
                by lowering the principal amount of the loan to the 
                fair market value of the real property securing the 
                loan at the time of submission of the plan, to the 
                extent that such fair market value is less than the 
                principal amount outstanding on the loan;
                    ``(B) waive any otherwise applicable early 
                repayment or prepayment penalties; and
                    ``(C) in any case in which the applicable rate of 
                interest is adjustable under the mortgage contract, 
                modify the rights of any holder of such claim, by 
                prohibiting or delaying adjustments to the rate of 
                interest applicable to the debt on and after the date 
                of filing of the plan or voiding any such adjustments 
                that occurred during the 2-year period preceding that 
                date of filing; and''.

SEC. 3. TREATMENT OF CERTAIN INTEREST AND FEES.

     Section 548(a) of title 11, United States Code, is amended by 
adding at the end the following:
            ``(3) For purposes of chapter 13, where the court finds 
        there was a substantial failure to disclose material terms 
        regarding interest, late fees, or other fees related to a claim 
        secured by a security interest in the debtor's principal 
        residence, the court may consider such interest, late fees, or 
        other fees to be a transfer covered under paragraph (1)(B).''.

SEC. 4. DELAY OF COUNSELING REQUIREMENT WHEN HOUSES ARE IN FORECLOSURE.

     Section 109(h) of title 11, United States Code, is amended by 
adding at the end the following:
            ``(5) The requirements of paragraph (1) may be delayed 
        until after the date of filing, with respect to a debtor who 
        submits to the court a certification that the holder of a claim 
        secured by the debtor's principal residence has initiated a 
        judicial or nonjudicial foreclosure on the debtor's principal 
        residence.''.

SEC. 5. STUDY AND REPORT.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study to determine the impact of allowing bankruptcy judges 
to restructure principal residence mortgages on the secondary market 
for mortgages.
    (b) Report to Congress.--Not later than 180 days after the date of 
enactment of this Act, the Comptroller General shall submit a report to 
Congress on the results of the study required under subsection (a).

SEC. 6. SUNSET.

     This Act and the amendments made by this Act shall apply with 
respect to filings under chapter 13 of title 11, United States Code, 
occurring during the 7-year period following the date of enactment of 
this Act.
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