Congressman Cohen Statement on Legislation to Keep American Families in Their Homes

Congressman Cohen released the following statement today after the vote:

This legislation is about fairness. It is about giving families who own one home the same rights as investors and speculators who own two or three. Without spending a dime, this legislation could keep hundreds of thousands of families across the country avoid foreclosure.

As the Chairman of the Subcommittee on Commercial and Administrative Law which has jurisdiction over bankruptcy law, I strongly supported this bill. I have been fighting hard for this legislation since last year, and Speaker Pelosi and Chairman Conyers asked me to present the bill to the Democratic Caucus last week. I’ve also been educating freshman and sophomore members of the House about the importance of changing the rules for mortgage modification through bankruptcy.

H.R. 1106 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. And it spurs mortgage refinancing by fixing the Federal Housing Administration’s Hope for Homeowners Program, reducing fees and offering new incentives for lenders.

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. By keeping families in their homes, we help preserve neighborhoods because foreclosures often result in the deterioration of property and an influx in crime. Stopping foreclosures also helps state and local governments by keeping homes on the tax rolls.

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.

Additionally, H.R. 1106 makes permanent the raise in the maximum federal deposit insurance coverage from the FDIC from $100,000 to $250,000. This was a key provision during negotiations on the TARP legislation in October. The idea for raising FDIC limits first arose when I introduced H.R. 6986 on September 22, 2008. I’m pleased that the Helping Families Save Their Homes Act would make the temporary increases in FDIC coverage that were included in the TARP bill permanent.

Congressman Cohen spoke in favor of H.R. 1106 during debate last week on the House Floor. The video is available here: https://www.youtube.com/watch?v=fZp8Hgk4XDI.

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Marilyn Dillihay, Press Secretary, 202-225-3265
Charlie Gerber, Communications Assistant, 202-225-3265