Congressman Jerrold Nadler (NY-08), Chair of the Judiciary Subcommittee on the Constitution, Civil Rights and Civil Liberties, pledged his support for H. R. 1106, the Helping Families Save Their Homes Act of 2009, which is under consideration today in the House of Representatives. This vital economic recovery legislation would finally be directed at the people who need it most – those struggling to pay their mortgages. The result of years of effort by Rep. Nadler, Judiciary Chairman John Conyers and others, this bill would allow judicial modification of distressed mortgages, a provision which would help hundreds of thousands of Americans to renegotiate their mortgage terms, save their homes and extricate themselves from massive debt. Thus far, banks have been allowed to voluntarily modify such mortgages and have, in large part, refused to act.

“This vital legislation couldn’t arrive soon enough,” said Rep. Nadler. “I have long advocated for bankruptcy reform which would allow homeowners to restructure their home mortgages, just as corporations and the wealthy can do with their assets. Passage of this housing bill is a crucial move toward economic solvency and fairness for homeowners. Despite the billions of taxpayers dollars that banks have received to keep the industry afloat, the banks have failed to save troubled homeowners; we must not.”

Rep. Nadler delivered the following statement on the floor of the House during debate on the bill:

“Mr. Speaker, this legislation is an opportunity for Members to help families who are about to lose their homes thanks to a terrible combination of job loss, spiraling health costs, declining home values, and predatory lending practices. It will, among other things, correct a 30-year-old anomaly in the bankruptcy code.

“If you're a family farmer, you're allowed to use bankruptcy to modify your mortgage. We enacted that law in 1986 during the farm foreclosure crisis. It was a success, and we made it permanent 3 years ago. If you're a real estate speculator or if you own 5 or 20 or 50 homes, you can modify your mortgage in bankruptcy. If you're a major corporation, you can modify all of your loans and contracts in bankruptcy. The only exception is the family home. Yet, while millions of middle class families are on the verge of losing their homes, much of the banking industry and some Members of this House are still opposed to providing the same relief to the middle class that is now enjoyed by farmers, speculators, the wealthy and major corporations.

“Lenders warn that we can't save the family home because it will increase borrowing costs for everyone else. This is the same industry that in 2005 told us that making bankruptcy more onerous would reduce people's interest costs by $400 per year on their credit cards. Nothing of the sort happened, of course.

“The banks have received billions of dollars from the taxpayers to keep the industry afloat, but they scream at the thought of our helping a few thousand families. I have nothing against Wall Street. In fact, it's in my district. But it is time we did something for the middle class homeowner. We tried the voluntary modification route without success. Maybe the programs in this bill will all work this time, but families getting thrown out of their homes shouldn't have to wait for Congress to figure out how to get banks to save the middle class. The banks have failed to save troubled homeowners. We must not fail. For every day we delay, the crisis deepens. People's lives hang in the balance. It is time we put American families first.

“I urge my colleagues to support the rule, to support this legislation and to end this anomaly in the bankruptcy code that affects only homeowners. Let them enjoy the same rights as everyone else.”