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U.S. Rep. Paul Tonko (D-Amsterdam) voted in favor of a bill today that will bring hope to families who are facing the possibility of losing their homes through foreclosure. The Helping Families Save Their Homes Act is a key piece of President Obama's Homeowner Affordability and Stability Plan.

"Keeping people in their homes and stabilizing the housing market is a big step toward our economic recovery," said Rep. Tonko. "This legislation will give families facing foreclosure a chance to save their homes, and restore fairness by giving them the same rights as investors who own multiple houses. We all stand to lose if we don't stabilize the housing market."

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 (which is 25% of homes in the country), and they cannot refinance.  Many are facing foreclosure through no fault of their own. This is an important step in helping America recover.

A study by The Center for Responsible Lending says 70,000 New Yorkers could lose their homes through foreclosure this year, including 3,171 in New York's 21st Congressional District. The study says court supervised loan modifications could save 40% of those from foreclosure.
 
The President has launched a website on his plan that also includes an eligibility quiz for homeowners struggling to make their payments: www.financialstability.gov

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