Press Releases

Washington, D.C. – Congressman Donald M. Payne voted in favor of legislation today that brings fairness and hope to families who are facing home foreclosure.  A record 5.4 million homeowners were either behind on payments or in foreclosure at the end of last year, according to an industry survey. It is vitally important that we address our nation’s housing crisis. The Helping Families Save Their Homes Act, HR 1106, will put in place a key first piece of President Obama’s comprehensive Homeowner Affordability and Stability Plan.  The President announced details of his plan yesterday, including a website, www.financialstability.gov, with an eligibility quiz for homeowners struggling to make their payments.

“This legislation is about fairness.  It is about giving families who own one home the same rights to keep their home when they face bankruptcy as the investors and speculators who own two or three,” said Payne.  “Without spending one federal dollar, this legislation could keep hundreds of thousands of families across the country from facing foreclosure and losing their home.”

The Helping Families Save Their Homes Act gives bankruptcy judges the ability to modify existing mortgages for families who file for Chapter 13 bankruptcy as an incentive to spur lenders into voluntarily modifying loans.  It gives lenders the confidence to modify loans by protecting them from some lawsuits.  It also spurs mortgage refinancing by fixing the Federal Housing Administration’s Hope for Homeowners Program, reducing fees and offering new incentives for lenders.

Chapter 13 bankruptcy filing is a last resort for many families who are unable to make ends meet in the midst of this recession.  It is a strict and intrusive process that forces a family to open their finances up to the scrutiny and management of the courts for up to five years. 

This legislation is critical to the overall recovery of our economy.  Home prices dropped 18 percent in the last quarter of 2008.  More than 14 million homeowners owe more on their mortgage than their home is worth, and they cannot refinance.  Many are facing foreclosure through no fault of their own. This is an important step in helping America recover.

Payne said, “Stabilizing the housing market is central to restoring the American economy.  We all stand to lose if we do not stop the steep decline in home prices. In fact, each foreclosed home reduces nearby property values by as much as 9 percent.  I am proud to support this legislation that offers a fair approach to our housing crisis—and work with the President to help 7 to 9 million American families from losing their homes, and their neighbors from losing value in their homes.”

###