Judiciary Committee to Consider Bipartisan Subprime Mortgage Bill Compromise

House Judiciary to Consider Bipartisan Subprime Mortgage Bill Compromise

(Washington, DC)- The House Judiciary Committee will consider a substitute version of the Miller-Sánchez "Emergency Homeownership and Mortgage Equity Protection Act of 2007" during a markup TOMORROW, December 12, at 10:15 a.m. in room 2141 of the Rayburn House Office Building. The substitute reflects a compromise made with Rep. Steve Chabot (R-OH) that will help hundreds of thousands of homeowners save their homes from foreclosure while seeking bankruptcy to reorganize their debts.

"This is a major step toward providing substantive relief to combat the mortgage crisis that is occurring in communities across our nation," Conyers said. "This bipartisan compromise assists a broad category of homeowners who would not otherwise benefit from the Administration's proposal, namely those homeowners who most need assistance and are facing foreclosure."

"The impact that subprime mortgages are having on local homeowners, neighborhoods, the housing market, and the economy as a whole is staggering," said Congressman Chabot. "This legislation is a necessary compliment to the legislation passed by the House earlier this fall and to the Administration's plan announced last week. I urge members on both sides of the aisle to support relief for those families who are struggling to keep their homes."

The key features of the compromise, to be offered by House Judiciary Committee Chairman John Conyers and Rep. Chabot are as follows:

· It targets existing nontraditional (e.g., interest-only) and subprime mortgages originated after January 1, 2000 up through the legislation's date of enactment.

· It applies to debtors who file for chapter 13 bankruptcy relief (a form of bankruptcy relief by which individuals restructure their debts) who lack sufficient income after payment of specified expenses pursuant to IRS guidelines to remain current on their mortgages and cure arrears, as required by current law. Debtors who so qualify may:

· reduce exorbitant mortgage interest rates and avoid onerous prepayment penalties;

· set aside excessive and often secret fees charged by unscrupulous mortgage lenders ;

· modify the principal amount of the mortgage to reflect the home's actual value.

"Today's compromise is an important step towards safeguarding the American dream of homeownership," said Congresswoman Linda Sánchez (D-CA). "If Congress does not take robust action, the nightmare that is the sub-prime mortgage crisis will continue, with hundreds of thousands of families losing their homes and continued instability in the housing market and our economy."

"Homeowners facing foreclosure should not have to beg predatory lenders to let them keep their homes," Miller said. "If a homeowner can't pay a predatory mortgage but can pay a fair mortgage, the homeowner should have the same rights in bankruptcy that a business has."

"This legislation will let more than half a million American families escape losing their homes to foreclosure," Miller added.