Washington, DC – U.S. Representative William Jefferson (D-LA) introduced the Homeowners’ Preservation of Equity (HOPE) Act of 2006, a bill that would allow eligible homeowners to defer mortgages until March 2007 or until the owner is able to reoccupy the home.

“I am proud to introduce this legislation to address a significant problem for homeowners in my district and across the Gulf region since Hurricanes Katrina, Rita and Wilma hit our shores,” Jefferson said.  “Homeowners have been unable to meet their mortgage obligations, while, in far too many cases, required to house themselves and their family in a second residence somewhere far from home.  So, on top of everything else, their greatest asset and the foundation of their economic security have often been in danger of foreclosure.”

Under the legislation, eligible homeowners include individuals living in the Gulf Opportunity Zone whose homes were significantly damaged and/or rendered uninhabitable as a consequence of Hurricane Katrina and eligible mortgages include those securing the primary residence of eligible homeowners.  The deferment would end the later of either 60 days after the homeowner reoccupies the primary residence, the date of any sale or transfer of the property by the eligible homeowner, or March 1, 2007.

During the deferment period, the Department of Treasury would advance the amount of the monthly mortgage payment for each eligible homeowner to the lender, including principal, interest, taxes, insurance and such other amounts as might be included in the monthly payment obligation under the note.  The advance money would be secured by a subordinate second lien on the affected home and repaid to the Treasury upon any subsequent sale or transfer by the eligible homeowner.

“Both individual homeowners and financial services industry participants are victims of these devastating storms,” Jefferson said.  “Both confront business and economic realities, and we must ensure that steps are taken to maintain both the hard-earned equity of homeowners in the Gulf and the industry’s health during this difficult period.”