Short title

This Act may be cited as the

Home Owners Mortgage and Equity Savings Act

HOMES Act

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

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).

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.

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).

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.