[House Report 111-23]
[From the U.S. Government Publishing Office]



111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     111-23

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PROVIDING FOR FURTHER CONSIDERATION OF THE BILL (H.R. 1106) TO PREVENT 
     MORTGAGE FORECLOSURES AND ENHANCE MORTGAGE CREDIT AVAILABILITY

                                _______
                                

   March 4, 2009.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

  Mr. Hastings of Florida, from the Committee on Rules, submitted the 
                               following

                              R E P O R T

                       [To accompany H. Res. 205]

    The Committee on Rules, having had under consideration 
House Resolution 25, by a non-record vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides that amendment number 1 printed in 
House Report 111-21 to be offered by Rep. John Conyers or his 
designee shall be perfected by the modification printed in this 
report.

          SUMMARY OF MODIFICATION TO BE CONSIDERED AS ADOPTED

    The modification would (1) allow a court to consider, in 
lieu of reducing mortgage principal, lowering the interest rate 
to reduce the debtor's mortgage payments according to the 
Administration's Homeowner Affordability and Stability Plan as 
implemented on March 4, 2009; (2) give the mortgage holder a 
greater proportion of the appreciation in a home on a graduated 
basis if it is sold during the 5-year period that the case is 
pending; and (3) provide that when a debtor seeks to reduce a 
mortgage's principal, the court must determine whether such 
relief is in good faith based on whether debtor was offered a 
mortgage modification under the Administration's plan and the 
debtor was able to afford payments under such plan.

            TEXT OF MODIFICATION TO BE CONSIDERED AS ADOPTED

  After the instruction amending the table of contents of the 
bill, insert the following (and make such technical and 
conforming changes as may be appropriate):

  Page 2, after line 6, insert the following (and make such 
technical and conforming changes as may be appropriate):

SEC. 100. DEFINITION.

  Section 101 of title 11, United States Code, is amended by 
inserting after paragraph (43) the following (and make such 
technical and conforming changes as may be appropriate):
          ``(43A) The term `qualified loan modification' means 
        a loan modification agreement made in accordance with 
        the guidelines of the Obama Administration's Homeowner 
        Affordability and Stability Plan as implemented March 
        4, 2009, that--
                  ``(A) reduces the debtor's payment (including 
                principal and interest, and payments for real 
                estate taxes, hazard insurance, mortgage 
                insurance premium, homeowners' association 
                dues, ground rent, and special assessments) on 
                a loan secured by a senior security interest in 
                the principal residence of the debtor, to a 
                percentage of the debtor's income in accordance 
                with such guidelines, without any period of 
                negative amortization or under which the 
                aggregate amount of the regular periodic 
                payments would not fully amortize the 
                outstanding principal amount of such loan;
                  ``(B) requires no fees or charges to be paid 
                by the debtor in order to obtain such 
                modification; and
                  ``(C) permits the debtor to continue to make 
                payments under the modification agreement 
                notwithstanding the filing of a case under this 
                title, as if such case had not been filed.''.

  Beginning on page 7, strike line 6 and all that follows 
through line 16 on page 8, and insert the following:

          ``(1) if such residence is sold in the 1st year 
        occurring after the effective date of the plan, 90 
        percent of the amount of the difference between the 
        sales price and the amount of such claim as originally 
        determined under subsection (b)(11) (plus costs of sale 
        and improvements), but not to exceed the unpaid amount 
        of the allowed secured claim determined as if such 
        claim had not been reduced under such subsection;
          ``(2) if such residence is sold in the 2d year 
        occurring after the effective date of the plan, 70 
        percent of the amount of the difference between the 
        sales price and the amount of such claim as originally 
        determined under subsection (b)(11) (plus costs of sale 
        and improvements), but not to exceed the unpaid amount 
        of the allowed secured claim determined as if such 
        claim had not been reduced under such subsection;
          ``(3) if such residence is sold in the 3d year 
        occurring after the effective date of the plan, 50 
        percent of the amount of the difference between the 
        sales price and the amount of such claim as originally 
        determined under subsection (b)(11) (plus costs of sale 
        and improvements), but not to exceed the unpaid amount 
        of the allowed secured claim determined as if such 
        claim had not been reduced under such subsection;
          ``(4) if such residence is sold in the 4th year 
        occurring after the effective date of the plan, 30 
        percent of the amount of the difference between the 
        sales price and the amount of such claim as originally 
        determined under subsection (b)(11) (plus costs of sale 
        and improvements), but not to exceed the unpaid amount 
        of the allowed secured claim determined as if such 
        claim had not been reduced under such subsection; and
          ``(5) if such residence is sold in the 5th year 
        occurring after the effective date of the plan, 10 
        percent of the amount of the difference between the 
        sales price and the amount of such claim as originally 
        determined under subsection (b)(11) (plus costs of sale 
        and improvements), but not to exceed the unpaid amount 
        of the allowed secured claim determined as if such 
        claim had not been reduced under such subsection.''.

  Strike the 1st instruction to amend page 9 of the bill and 
strike the amendment proposed to be inserted after line 19 on 
page 9 of the bill.

  Strike the instruction to amend page 11 of the bill and all 
the text that follows through the amendment to page 12 of the 
bill, and insert the following (and make such technical and 
conforming changes as may be appropriate):

  Page 11, strike lines 23 through 25, insert the following 
(and make such technical and conforming changes as may be 
appropriate):

          (1) in the matter preceding paragraph (1) strike 
        ``subsection (b)'' and insert ``subsections (b) and 
        (d)''.
          (2) in paragraph (5)--
                  (A) by inserting ``except as otherwise 
                provided in section 1322(b)(11),'' after 
                ``(5)'', and
                  (B) in subparagraph (B)(iii)(I) by inserting 
                ``(including payments of a claim modified under 
                section 1322(b)(11))'' after ``payments'' the 
                1st place it appears,

  Page 12, line 20, insert the following after ``faith'':

        (Lack of good faith exists if the debtor has no need 
        for relief under this paragraph because the debtor can 
        pay all of his or her debts and any future payment 
        increases on such debts without difficulty for the 
        foreseeable future, including the positive amortization 
        of mortgage debt. In determining whether a reduction of 
        the principal amount of loan resulting from a 
        modification made under the authority of section 
        1322(b)(11) is made in good faith, the court shall 
        consider whether the holder of such claim (or the 
        entity collecting payments on behalf of such holder) 
        has offered to the debtor a qualified loan modification 
        that would enable the debtor to pay such debts and such 
        loan without reducing such principal amount.)''.

  Page 12, after line 24, insert the following (and make such 
technical and conforming changes as may be appropriate):

  (b) Section 1325 of title 11, United States Code, is amended 
by adding at the end the following (and make such technical and 
conforming changes as may be appropriate):
  ``(d) Notwithstanding section 1322(b)(11)(C)(ii), the court, 
on request of the debtor or the holder of a claim secured by a 
senior security interest in the debtor's principal residence, 
may confirm a plan proposing a reduction in the interest rate 
on the loan secured by such security interest and that does not 
reduce the principal, provided the total monthly mortgage 
payment is reduced to a percentage of the debtor's income in 
accordance with the guidelines of the Obama Administration's 
Homeowner Affordability and Stability Plan as implemented March 
4, 2009, if, taking into account the debtor's financial 
situation, after allowance of expenses that would be permitted 
for a debtor under this chapter subject to paragraph (3) of 
subsection (b), regardless of whether the debtor is otherwise 
subject to such paragraph, and taking into account additional 
debts and fees that are to be paid in this chapter and 
thereafter, the debtor would be able to prevent foreclosure and 
pay a fully amortizing 30-year loan at such reduced interest 
rate without such reduction in principal.''.

                                  
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