Dear NACBA Member,

YOUR ACTION IS NEEDED NOW! Later this week, key members of the House of Representatives will offer an amendment to the financial services regulatory overhaul bill that would incorporate the substance of H.R. 1106, approved earlier this year by the House of Representatives. You will recall that H.R. 1106 provided for mortgage modification of principal residences in bankruptcy. This latest effort to pass cramdown legislation is due in large part to the continuing focus by the NACBA Board, membership, our legislative team in Washington, and our allies on the failed efforts to stem the home foreclosure crisis.

We have been keeping a spotlight on the complete failure of the banks to offer meaningful loan modifications across the country, as well as the dismal results to date for families trying to save their homes under the Treasury Department’s modification programs. No one has a better knowledge of those failures than you do as a bankruptcy attorney. And no one better understands the huge impact that this legislation would have in saving families’ homes and stabilizing neighborhoods and communities. That is why we need your help today!

H.R. 4173, the Wall Street Reform and Consumer Protection Act (details at http://financialservices.house.gov/Key_Issues/Financial_Regulatory_Reform/Financial_Regulatory_Reform.html) will be considered by the full House of Representatives beginning this Wednesday, December 9th. The amendment providing for mortgage modification in bankruptcy is being offered by a bipartisan group of Members, including Representatives Conyers (D, MI), Turner (R, OH), Lofgren (D, CA), Marshall (D, GA), Cohen (D, TN), Miller (D, NC), Nadler (D, NY), Delahunt (D, MA) and Waters (D, CA).

In order to be successful in passing the amendment, we need every NACBA member to:

1. Identify your Member of Congress. If you don’t know who it is, go to www.house.gov and fill in your zip code in the box provided on the left hand side of the page. You will learn who your member is. For the contact information for your Member, go to the same Web site and look for your representative. The web page for individual members will include contact information. Alternatively, you can find the DC phone number for your representative by going to http://clerk.house.gov/member_info/mcapdir.html.

2. Know how that Member voted on H.R. 1106 when it was before the House of Representatives this year. That vote may be found at http://clerk.house.gov/evs/2009/roll104.xml.

3. Call your Representative and ask to speak with the staff person who is handling H.R. 4173, the Wall Street Reform and Consumer Protection Act. Identify yourself as being a constituent.

4. Here are some key messages for speaking with the staff person or leaving a voice mail message:

Urge Rep. __________ to support an amendment to H.R. 4173 being offered by Reps. Conyers, Turner, Lofgren, Marshall and others that will help financially distressed families avoid foreclosure.
The number of homes in foreclosure continues to rise dramatically, with up to 3 million new foreclosure starts this year alone. This continued foreclosure crisis undermines the prospect for any kind of economic recovery. (Add any local examples or flavor that you can.)
The latest adjustments by the Obama Administration to its nine-month old foreclosure program do little but highlight the continued failure of the lenders’ voluntary efforts to stop the foreclosure crisis. Lenders have insisted for almost 3 years now that they will voluntarily address the foreclosure crisis. But the record is abundantly clear that the voluntary programs have not worked.
For those Members who voted yes on HR 1106: This amendment is identical to H.R. 1106, a bill Rep. _______supported when it came up for a vote earlier in the year.
For those Members who voted no on HR 1106: I understand that Rep. __________ had concerns about a similar bill when it passed the House earlier this year. What you should know is that in the intervening months, the foreclosure crisis has gotten worse, not better. If our economy is to recover, we need the housing market to stabilize first.
Additional Background information that you might want to use:

The amendment that will be offered on the floor would empower bankruptcy judges to modify mortgages on primary residences as the “stick” that financially-strapped homeowners desperately need to get their lenders to work with them to prevent avoidable foreclosures.
This narrowly-tailored change to the bankruptcy code would not cost the U.S. taxpayer one penny for stopping foreclosures and stabilizing the economy by providing homeowners access to court-supervised mortgage modifications.
The amendment will not excuse families from paying their mortgage or encourage a rush to bankruptcy court. Rather, it will give judges the authority to modify unaffordable loans for families who are facing foreclosure and cannot obtain a voluntary modification.
The clear objective of the amendment is to encourage the servicers of troubled homeowners to offer aggressive loan modifications that would help keep families in their homes, which, when compared to foreclosure, is more profitable to banks, more secure for the families, and more stable for the surrounding neighborhood and community.
Calls to your Representative should be made tomorrow (Tuesday) and Wednesday. If you have questions, want an email address for a staffer, or need more information, please contact Maureen Thompson, NACBA’s legislative director, (mthompson@hastingsgroup.com, 703-276-3251) or Alex Grodin in her office (agrodin@hastingsgroup.com, 703-276-3254).

Sincerely,

Carey Ebert Ike Shulman

NACBA President NACBA Legislative Chair

Resources:

Why Treasury Needs a Plan B for Mortgages, New York Times, December 6, 2009

http://www.nytimes.com/2009/12/06/business/economy/06gret.html?em

The Continuing Foreclosure Crisis