Protecting Homeowners and Foreclosure Stabilization Act of 2010 - Amends the bankruptcy code to make an exception to the requirement that the bankruptcy court grant relief from a stay, on the request of a party in interest, by terminating, annulling, modifying, or conditioning the stay for cause, including the lack of adequate protection of an interest in property of that party in interest. Excludes from mandatory relief from a stay on these grounds any stay of the foreclosure of the debtor's principal residence.
Amends Chapter 13 (Adjustment of Debts of an Individual with Regular Income) of the bankruptcy code with respect to discretionary contents of the debtor's plan for adjustments of his or her debts. Allows the plan, subject to certain conditions, to modify the rights of the holder of a claim for a loan: (1) originated before the effective date of this Act, and (2) secured by a security interest (including a subordinate security interest) in the debtor's principal residence that is the subject of a notice that a foreclosure on the loan may be commenced.
Specifies as such conditions that the plan: (1) prohibits, reduces, or delays any otherwise permissible adjustments to the interest rate applicable on and after the date of the filing of the plan; (2) modifies the terms and conditions of the loan to provide for the payment of interest accruing after the date of the order for relief at a fixed annual rate equal to a specified rate, plus a reasonable premium for risk; and (3) provides for payments of the modified loan directly to the claim holder.
Allows a claim to be reduced under this Act only on the condition that, if the debtor sells the principal residence securing the claim before receiving a discharge from debt, and receives net proceeds from that sale, then the debtor agrees to pay the claim holder 30% of the capital gains if the residence is sold within 10 years after the plan's effective date.
Extends from 14 to 30 days the deadline, under the Federal Rules of Bankruptcy Procedure, for the filing of a debtor's plan after the filing of a Chapter 13 petition, if the debtor's plan would modify the rights of a claim holder pursuant to this Act.
Exempts from the credit counseling requirement any debtor whose principal residence is the subject of a notice of foreclosure (or similar notice under state law).
Makes it one of the duties of a debtor in a voluntary case under chapter 13, in which a debt is secured by a lien on the debtor's principal residence, to certify under penalty of perjury that, before the filing of the petition, the debtor requested the holder of the claim for such debt to modify the debt.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6431 Introduced in House (IH)]
111th CONGRESS
2d Session
H. R. 6431
To amend title 11 of the United States Code to modify the application
of chapter 13 with respect to principal residences that are the subject
of foreclosure.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 18, 2010
Mr. McDermott introduced the following bill; which was referred to the
Committee on the Judiciary
_______________________________________________________________________
A BILL
To amend title 11 of the United States Code to modify the application
of chapter 13 with respect to principal residences that are the subject
of foreclosure.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protecting Homeowners and
Foreclosure Stabilization Act of 2010''.
SEC. 2. PRESERVATION OF STAY OF FORECLOSURE OF PRINCIPAL RESIDENCE.
Section 362(d) of title 11, the United States Code, is amended in
paragraph (1) by inserting ``(excluding a stay of the foreclosure of
the principal residence of the debtor)'' after ``stay'' the first place
it appears.
SEC. 3. AUTHORITY TO MODIFY CERTAIN MORTGAGES.
Section 1322 of title 11, United States Code, is amended--
(1) in subsection (b)--
(A) by redesignating paragraph (11) as paragraph
(12),
(B) in paragraph (10) by striking ``and'' at the
end, and
(C) by inserting after paragraph (10) the
following:
``(11) notwithstanding paragraph (2) and otherwise
applicable nonbankruptcy law, with respect to a claim for a
loan originated before the effective date of this paragraph and
secured by a security interest in the debtor's principal
residence that is the subject of a notice that a foreclosure
may be commenced with respect to such loan, modify the rights
of the holder of such claim (and the rights of the holder of
any claim secured by a subordinate security interest in such
residence)--
``(A) if any applicable rate of interest is
adjustable under the terms of such security interest by
prohibiting, reducing, or delaying adjustments to such
rate of interest applicable on and after the date of
filing of the plan;
``(B) by modifying the terms and conditions of such
loan to provide for the payment of interest accruing
after the date of the order for relief under this
chapter at a fixed annual rate equal to the currently
applicable average prime offer rate as of the date of
the order for relief under this chapter, corresponding
to the repayment term determined under the preceding
paragraph, as published by the Federal Financial
Institutions Examination Council in its table entitled
`Average Prime Offer Rates--Fixed', plus a reasonable
premium for risk; and
``(C) by providing for payments of such modified
loan directly to the holder of such claim; and'', and
(2) by adding at the end the following:
``(g) A claim may be reduced under subsection (b)(11)(A) only on
the condition that if the debtor sells the principal residence securing
such claim, before receiving a discharge under this chapter and
receives net proceeds from the sale of such residence, then the debtor
agrees to pay to such holder if such residence is sold in the 10-year
period beginning on the effective date of the plan, 30 percent of the
capital gains, if any, as defined in section 1001 of the Internal
Revenue Code of 1986.''.
SEC. 4. EXTENDED PERIOD FOR FILING CERTAIN CHAPTER 13 PLANS.
If the debtor's plan modifies the rights of a holder of a claim
under section 1322(b)(11), then for purposes of rule 3015(b) of the
Federal Rules of Bankruptcy Procedure a reference to ``14 days'' shall
be deemed to be a reference to ``30 days''.
SEC. 5. EXEMPTION FROM COUNSELING REQUIREMENT.
Section 109(h) of title 11, the United States Code, is amended--
(1) in paragraph (1) by striking ``(2) and (3)'' and
inserting ``(2), (3), (4), and (5)''; and
(2) by adding at the end the following:
``(5) The requirements of paragraph (1) shall not apply with
respect to a debtor whose principal residence is the subject of a
notice of foreclosure (or similar notice under State law).''.
SEC. 6. REQUIREMENT TO REQUEST MODIFICATION.
Section 521(a) of title 11, the United States Code, is amended--
(1) in paragraph (6) by striking ``and'' at the end,
(2) in paragraph (7) by striking the period at the end, and
(3) and inserting after paragraph (7) the following:
``(8) in a voluntary case under chapter 13 in which there
is a debt secured by a lien on the principal residence of the
debtor, certify under penalty of perjury that before the filing
of the petition debtor requested that the holder of the claim
for such debt modify such debt.''.
SEC. 7. RULE OF CONSTRUCTION.
Nothing in this Act or the amendments made by this Act shall be
construed to modify any obligation of the Federal Housing
Administration, the Veterans Administration, or the Department of
Agriculture under a contract that guarantees or insures the payment of
any part of a loan secured by a security interest in a principal
residence.
SEC. 8. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as provided in subsection (b), this and
the amendments made by this shall take effect on the date of the
enactment of this Act.
(b) Application of Amendments.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this Act shall apply with respect to cases
commenced under title 11 of the United States Code before, on,
or after the date of the enactment of this Act.
(2) Limitation.--Paragraph (1) shall not apply with respect
to cases closed under title 11 of the United States Code as of
the date of the enactment of this Act that are neither pending
on appeal in, nor appealable to, any court of the United
States.
<all>
Introduced in House
Introduced in House
Sponsor introductory remarks on measure. (CR E1979)
Referred to the House Committee on the Judiciary.
Referred to the Subcommittee on Commercial and Administrative Law.
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