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Housing Recent legislation in the 111th Congress Since our housing market began to slow in early 2006, there has been a significant rise in late mortgage payments, foreclosures, and bankruptcies nationwide. Lenders may voluntarily agree to adjust mortgage terms in order to help troubled borrowers continue to stay in their homes. However, there are a number of obstacles that may discourage mortgage servicers and creditors from performing loan modifications, even in situations in which a modification would be the most economically beneficial outcome for both the servicer and borrower. These obstacles include potential contract liability, tax regulations, accounting standards, and payment schemes. However, like many of my colleagues, I believe that allowing bankruptcy courts to modify debts secured by the debtor's primary residence could be a way of encouraging the modification of mortgages before default or delinquency and ensuring that the value of the home is preserved for both the lender and the homeowner. H.R. 1106 corrects an anomaly under current bankruptcy law that allows judges to modify virtually every other type of loan—for cars, RVs, vacation homes, investment properties—except a mortgage on a primary residence. This bill levels the playing field for average Americans, by giving them the same option for saving their homes that wealthy investors and speculators have long had for all different kinds of property. Specifically, the Fraud Enforcement and Recovery Act ensures that mortgage lenders make loans that benefit the consumer and prohibits them from steering borrowers into higher cost loans. It will, in effect, prevent borrowers from deliberately misstating their income to qualify for a loan. For the first time ever, it holds accountable all of those who originate, sell and buy loans, including those on Wall Street who buy up and bundle mortgages for profit. The legislation goes further toward reforming our financial system and demanding accountability by establishing standards for all home loans. Institutions will be required to ensure that borrowers can repay the loans they are sold. It also requires that all mortgage refinancing loans benefit the consumer and encourages the market to move back toward fully documented loans.
Press Releases
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El Paso Credit Union Affordable Housing Receives a $98K Grant
8.8.2012
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