[Congressional Record (Bound Edition), Volume 155 (2009), Part 5]
[House]
[Pages 6370-6371]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          HELP FOR HOMEOWNERS

  (Mr. CONNOLLY of Virginia asked and was given permission to address 
the House for 1 minute and to revise and extend his remarks.)
  Mr. CONNOLLY of Virginia. Mr. Speaker, this week the House is 
scheduled to take up H.R. 1106, the Helping Families Save Their Homes 
Act of 2009. While much of the controversy over this bill is focused on 
the title I provisions, the provisions in title II will provide safe 
harbor for lenders willing to modify mortgages and improve the HOPE for 
Homeowners program.
  Allow me to dispel a few of the myths surrounding this legislation.
  Myth: The bill only benefits a small number of homeowners.
  Fact: This bill will actually help all homeowners by protecting their 
neighborhoods from the negative effects of foreclosure. Every 
foreclosure brings down the value of nearby homes, further eroding the 
equity of homeowners who are up to date on their mortgages. Millions of 
middle class families are just one sickness or one layoff away from a 
possible foreclosure.
  Myth: The bill rewards bad behavior.
  Fact: This bill requires homeowners to negotiate with their lenders 
in good faith before they can even consider applying for judicial 
modification of their home loan through bankruptcy.
  Myth: The bill is a dramatic change in the Bankruptcy Code.
  Fact: This bill equalizes the rules by treating residential 
bankruptcies the same as corporate, farm and vacation home 
bankruptcies.
  Mr. Speaker, I urge my colleagues to support this legislation.
  I'd like to remind my colleagues that while much of the controversy 
over this bill has focused on the Title I provisions, the provisions in 
Title II will help thousands of homeowners and enjoy broad support. 
Providing safe harbor for lenders willing to modify mortgages and 
improving the HOPE for Homeowners program are much-needed reforms that 
will help stem the tide of foreclosures and protect our neighborhoods. 
I would like to take a few moments to dispel some of the myths 
surrounding the legislation that could also be referred to as the 
Neighborhood Protection Act.
  Myth: This bill only benefits a small number of low income homeowners 
or homeowners who bought more house than they could afford.
  Fact: H.R. 1106 will actually help all homeowners by protecting their 
neighborhoods from the negative effects of foreclosure. Every 
foreclosure in a neighborhood brings down the value of nearby homes, 
further eroding the equity of homeowners who are up to date on their 
mortgages. Furthermore, the foreclosure crisis has spread beyond 
victims of the sub-prime crisis or individuals who purchased more home 
than they could afford. As President Obama noted in his address to this 
body, millions of middle-class families are just one sickness or one 
layoff away from possible foreclosure. Without the ability to sell or 
refinance a home with a current value lower than the mortgage value, 
these families are out of options.
  Myth: The bill rewards bad behavior.
  Fact: H.R. 1106 requires homeowners to negotiate with their lenders 
in good faith before they can even consider applying for a judicial 
modification of their home loan through bankruptcy. And the bill 
prevents judges from modifying loans for homeowners who have the 
ability to make their payments or make other bad faith efforts to game 
the system. The specious argument that the bill rewards bad behavior is 
being promoted by the banks, who themselves were rewarded for their bad 
behavior by the previous Administration. After receiving hundreds of 
billions of dollars in taxpayer bailouts, the banks should be the last 
to complain. This bill is designed to help families who have worked 
hard and played by the rules, but are trapped by declining property 
values and escalating job losses.
  Myth: The bill enables homeowners to avoid their financial 
responsibilities.
  Fact: H.R. 1106 allows judges to modify a mortgage only in those 
cases where it is truly not affordable for the homeowner and even then 
judges can only reduce the mortgage to the fair market value of the 
property. Lenders are able to recoup the fair market value of the 
house, plus interest, which is much better than they usually secure in 
a foreclosure sale.
  Myth: The bill is a dramatic change in the bankruptcy code.
  Fact: H.R. 1106 equalizes bankruptcy rules by treating residential 
bankruptcies the same as corporate, farm, and vacation home 
bankruptcies. H.R. 1106 will give struggling families or individuals 
the same right to modify the loans on their primary homes as wealthy 
investors have to modify the loans on their second or third properties.
  Myth: The bill will dramatically increase bankruptcies.
  Fact: Bankruptcy proceedings are unpleasant and scar one's credit 
record for years. No one looks forward to bankruptcy. And this bill 
provides stringent conditions, with a series of

[[Page 6371]]

interim steps and requirements, so bankruptcy proceedings are only used 
as a last resort after exhausting all other options to save a home.
  Myth: This bill is another bailout for the banks and will cost 
taxpayers tens of billions.
  Fact: H.R. 1106 actually redirects existing TARP funds from the banks 
to homeowners. It also will make sure the TARP funds are spent on 
economic recovery and neighborhood stabilization rather than salted 
away in some bank vault or paid to bank shareholders as dividends. This 
bill does exactly what the American people have asked for; it helps 
homeowners rather than banks and big business.
  Mr. Speaker, H.R. 1106 is not a perfect bill, but it is one more 
piece in the mosaic of positive efforts we are making to turn our 
economy around. It is good for homeowners. It is good for the future 
stability of our neighborhoods. It is good for our nation's economy.
  That is why I ask my colleagues to join me later today in supporting 
H.R. 1106.

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