Mr. CONYERS. Mr. Speaker, the ``Home Foreclosure Reduction Act of 2013,'' permits a bankruptcy judge to reduce the principal amount of an underwater mortgage to the fair market value of the home, which will encourage homeowners to make their mortgage payments and help stop the endless cycle of foreclosures which further depresses home values. It also authorizes the mortgage's repayment period to be extended so that monthly mortgage payments are more affordable. In addition, the bill permits exorbitant mortgage interest rates to be reduced to a level that will keep the mortgage affordable over the long-term. And, it authorizes the waiver of prepayment penalties and excessive fees. Further, the bill would allow hidden fees and unauthorized costs to be eliminated.
This bill addresses the fundamental problem with every privately-sponsored and government program that has previously been developed to deal with the home foreclosure crisis. Unlike every other government program, this legislation empowers a homeowner to force the lender to modify the terms of the mortgage by allowing the principal amount of the mortgage to be reduced to the home's fair market value, which numerous economists and housing experts agree is the most effective way to respond to the foreclosure crisis. And, unlike every other government program, the implementation of this measure will not cost taxpayers a single penny.
This legislation is identical to H.R. 1587, which was introduced in the 112th Congress, and contains similar provisions included in H.R. 1106, which the House passed nearly three years ago. Unfortunately, those provisions were taken out in the Senate and not included in the final version of the bill that was subsequently enacted into law.
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