Rep. Brad Miller's Bankruptcy Reform is Core Element of the Helping Families Save Their Homes Act Debated in the House
Today, the U.S. House debated the Helping Families Save Their Homes Act which included legislation introduced by Rep. Brad Miller (NC-13) during the last Congress to allow bankruptcy judges to modify mortgages in an effort to prevent foreclosure of family homes.
"Whatever the reason that families may find themselves unable to pay their mortgages, the effect of foreclosure is the same: disaster for the family, for the surrounding neighborhood, and for the economy," said Rep. Miller.
Rep. Miller's portion of the bill would push lenders into helping families who have run out of options by allowing bankruptcy judges to modify the terms of a mortgage - as they currently do for vacation homes and investment properties.
According to Credit Suisse, 8.1 million families will lose their homes to foreclosure by the end of 2012, almost one mortgage in five, and perhaps as many as 10.2 million families could lose their homes to foreclosure if the recession becomes severe, a frighteningly real possibility.
But the crisis goes far beyond those families that are at risk of losing their homes. Vacant foreclosed homes are stigmatizing neighborhoods and pushing down home values, and priced-to-sell foreclosed homes are flooding real estate markets around the country.
"To fix the economy, we've got to fix housing first," said Rep. Miller
The bill also includes provisions to fix the Hope for Homeowners program by offering incentives to lenders to negotiate loans; offers a safe harbor from liability by allowing voluntarily mortgage modifications from lenders without risk of a lawsuit; and increases the FDIC insurance limit to enhance liquidity and stability to ensure available credit limit.
A vote on the Helping Families Save Their Homes Act is expected next week.