WASHINGTON — The House Subcommittee on Commercial and Administrative Law approved a bill that would allow judges some latitude to adjust the terms of mortgages in Chapter 13 bankruptcy filings.
The Emergency Home Ownership and Mortgage Equity Protection Act of 2007 (H.R. 3609) passed, five Democrats for and four Republicans against. CUNA and NAFCU have not adopted an official position on the bill, but during a precursory hearing the Financial Services Roundtable testified against it.
"We have concerns about this legislation," NAFCU Director of Legislative Affairs Brad Thaler said. "We haven't officially weighed in with the committee about it yet but I've been talking with staff about it. We have concerns about the impact that it'll have both on secured lending and disruptions in the credit market and how that cost must be passed onto consumers."
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He continued, H.R. 3609, as is, "is going to add risk to the system, it's going to impact the pricing. It can affect the ability to sell mortgages on the secondary market. So it has the potential to throw a lot of uncertainty into the system which could cause more disruptions."
The full committee markup on the bill is expected shortly. Thaler said it could very well pass long party lines again, which "raises the question that if something ever got to the president, would the president sign it or veto it and send it back?" Thaler said.
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