Testimony of David G. Kittle

Statement of David G. Kittle, CMB

Chairman-Elect, Mortgage Bankers Association

Before the Subcommittee on Commercial and Administrative Law

Committee on Judiciary

United States House of Representatives

January 29, 2008

Madam Chairwoman, Ranking Member Cannon and members of the Committee, I am David G. Kittle, CMB, President and Chief Executive Officer of Principle Wholesale Lending, Inc. in Louisville, Kentucky and Chairman-Elect of the Mortgage Bankers Association (MBA).1 I appreciate the opportunity to appear before you today to testify on behalf of MBA and the mortgage industry concerning the situation in today’s market, to help identify solutions and to dispel the myths about legislation that would alter the treatment of home mortgages under Chapter 13 of the Bankruptcy Code.

The myths most in need of dispelling concern H.R. 3609, the ‘‘Emergency Home Ownership and Mortgage Equity Protection Act of 2007,’’ introduced by Representative Brad Miller and Chairwoman Linda Sanchez and amended by Representative Steve Chabot in the full Judiciary Committee. The amended bill makes key changes to Chapter 13 of the Bankruptcy Code including allowing the following changes for seven years:

  • modification of “subprime” and “non-traditional” mortgages secured by principal residences (“home mortgages”) originated between 2000 and the date of enactment of the bill;
  • allowing home loans to be repaid beyond the term of the Chapter 13 plan, which today cannot exceed three to five years;
  • eliminating the requirement to obtain credit counseling before the debtor can file for bankruptcy when the lender has notified the debtor that it may foreclose the loan; and
  • requiring that fees and charges, accruing during the bankruptcy proceeding be filed with the court and that such fees do not exceed the value of the property.

If these provisions are enacted, there will be significant consequences for future borrowers, mortgage servicers, investors, pension funds and other global investors in mortgage-backed securities (MBS), as well as, the entire American economy. For these and other reasons, MBA opposes H.R. 3609.

Click here to read full testimony

Date published: Jan 29, 2008

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