[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6431 Introduced in House (IH)]

111th CONGRESS
  2d Session
                                H. R. 6431

 To amend title 11 of the United States Code to modify the application 
of chapter 13 with respect to principal residences that are the subject 
                            of foreclosure.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 18, 2010

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

_______________________________________________________________________

                                 A BILL


 
 To amend title 11 of the United States Code to modify the application 
of chapter 13 with respect to principal residences that are the subject 
                            of foreclosure.

    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 ``Protecting Homeowners and 
Foreclosure Stabilization Act of 2010''.

SEC. 2. PRESERVATION OF STAY OF FORECLOSURE OF PRINCIPAL RESIDENCE.

    Section 362(d) of title 11, the United States Code, is amended in 
paragraph (1) by inserting ``(excluding a stay of the foreclosure of 
the principal residence of the debtor)'' after ``stay'' the first place 
it appears.

SEC. 3. AUTHORITY TO MODIFY CERTAIN MORTGAGES.

    Section 1322 of title 11, United States Code, is amended--
            (1) in subsection (b)--
                    (A) by redesignating paragraph (11) as paragraph 
                (12),
                    (B) in paragraph (10) by striking ``and'' at the 
                end, and
                    (C) by inserting after paragraph (10) the 
                following:
            ``(11) notwithstanding paragraph (2) and otherwise 
        applicable nonbankruptcy law, with respect to a claim for a 
        loan originated before the effective date of this paragraph and 
        secured by a security interest in the debtor's principal 
        residence that is the subject of a notice that a foreclosure 
        may be commenced with respect to such loan, modify the rights 
        of the holder of such claim (and the rights of the holder of 
        any claim secured by a subordinate security interest in such 
        residence)--
                    ``(A) 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;
                    ``(B) by modifying the terms and conditions of such 
                loan to provide for the payment of interest accruing 
                after the date of the order for relief under this 
                chapter at a fixed annual rate equal to the currently 
                applicable average prime offer rate as of the date of 
                the order for relief under this chapter, corresponding 
                to the repayment term determined under the preceding 
                paragraph, as published by the Federal Financial 
                Institutions Examination Council in its table entitled 
                `Average Prime Offer Rates--Fixed', plus a reasonable 
                premium for risk; and
                    ``(C) by providing for payments of such modified 
                loan directly to the holder of such claim; and'', and
            (2) by adding at the end the following:
    ``(g) A claim may be reduced under subsection (b)(11)(A) only on 
the condition that if the debtor sells the principal residence securing 
such claim, before receiving a discharge under this chapter and 
receives net proceeds from the sale of such residence, then the debtor 
agrees to pay to such holder if such residence is sold in the 10-year 
period beginning on the effective date of the plan, 30 percent of the 
capital gains, if any, as defined in section 1001 of the Internal 
Revenue Code of 1986.''.

SEC. 4. EXTENDED PERIOD FOR FILING CERTAIN CHAPTER 13 PLANS.

    If the debtor's plan modifies the rights of a holder of a claim 
under section 1322(b)(11), then for purposes of rule 3015(b) of the 
Federal Rules of Bankruptcy Procedure a reference to ``14 days'' shall 
be deemed to be a reference to ``30 days''.

SEC. 5. EXEMPTION FROM COUNSELING REQUIREMENT.

    Section 109(h) of title 11, the United States Code, is amended--
            (1) in paragraph (1) by striking ``(2) and (3)'' and 
        inserting ``(2), (3), (4), and (5)''; and
            (2) by adding at the end the following:
    ``(5) The requirements of paragraph (1) shall not apply with 
respect to a debtor whose principal residence is the subject of a 
notice of foreclosure (or similar notice under State law).''.

SEC. 6. REQUIREMENT TO REQUEST MODIFICATION.

    Section 521(a) of title 11, the United States Code, is amended--
            (1) in paragraph (6) by striking ``and'' at the end,
            (2) in paragraph (7) by striking the period at the end, and
            (3) and inserting after paragraph (7) the following:
            ``(8) in a voluntary case under chapter 13 in which there 
        is a debt secured by a lien on the principal residence of the 
        debtor, certify under penalty of perjury that before the filing 
        of the petition debtor requested that the holder of the claim 
        for such debt modify such debt.''.

SEC. 7. RULE OF CONSTRUCTION.

    Nothing in this Act or the amendments made by this Act shall be 
construed to modify any obligation of the Federal Housing 
Administration, the Veterans Administration, or the Department of 
Agriculture under a contract that guarantees or insures the payment of 
any part of a loan secured by a security interest in a principal 
residence.

SEC. 8. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

    (a) Effective Date.--Except as provided in subsection (b), this and 
the amendments made by this shall take effect on the date of the 
enactment of this Act.
    (b) Application of Amendments.--
            (1) In general.--Except as provided in paragraph (2), 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.
            (2) Limitation.--Paragraph (1) shall not apply with respect 
        to cases closed under title 11 of the United States Code as of 
        the date of the enactment of this Act that are neither pending 
        on appeal in, nor appealable to, any court of the United 
        States.
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