|
|
 |
|
News Room
News Releases
|
|
Home
|
Specter Introduces Bill To Combat Home Mortgage Crisis
HOMES Act provides bankruptcy relief to homeowners
Washington, D.C.
Wednesday, October 3, 2007 -
Today U.S. Senator Arlen Specter (R-Pa.), ranking member of the Senate Judiciary Committee, introduced the Home Owners’ Mortgage and Equity Savings (HOMES) Act. The legislation takes aim at the housing crisis by providing relief to homeowners who are in bankruptcy because they can no longer afford to pay their mortgages.
From 1994 to 2004, interest rates were at historic lows, spurring a housing boom the United States. Lenders offered new types of mortgages to borrowers who would not have previously qualified. However, those mortgages, which included adjustable rates mortgages (ARMs), subprime mortgages, no-down-payment or interest-only mortgages, frequently featured low ”teaser” rates that later reset to much higher rates.
“With the era of easy money and low interest rates over, a crisis looms. Many borrowers with adjustable rate, interest-only or no-down-payment mortgages have been unable to keep up with their monthly mortgage payments,” stated Specter in his floor statement. “In the past year the number of homeowners with adjustable rate mortgages who are seriously delinquent has nearly doubled.”
Recognizing that many of those facing foreclosure will seek relief in bankruptcy, the HOMES Act seeks to provide relief to low and moderate income homeowners who are caught in the current crisis. The Act does the following:
1. Allows bankruptcy judges to delay, prohibit or roll back increases in mortgage interest rates.
2. Allows bankruptcy judges to waive early repayment penalties which prevent or discourage homeowners from refinancing and obtaining more suitable mortgages.
3. Allows bankruptcy judges to recover interest, fees and penalties when the creditor committed fraud or failed to disclose material loan terms.
4. Allows judges to write down principal on a mortgage when lenders and borrowers agree.
5. Delays credit counseling until after filing when foreclosure is imminent.
 |
You will need to have Real One Player installed on your computer to be able to listen or watch the clips above. Real One Player is free software that lets you play audio and video files. Download Real One Player |
|
|
Audio
Video