S.Res. 340Senate109th Congress (2005-2007)In Committee

A resolution expressing the sense of the Senate that lenders holding mortgages on homes in communities of Louisiana devastated by Hurricanes Katrina and Rita should extend current mortgage payment forbearance periods and not foreclose on properties in those communities until such time that Congress can consider legislation to provide relief to those homeowners.

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SenateIntro Referral Latest Action

Referred to the Committee on Banking, Housing, and Urban Affairs. (text of measure as introduced: CR S14187)

Banking, Housing, and Urban Affairs Committee

December 20, 2005

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SenateIntro Referral

Introduced in Senate

December 20, 2005

SenateIntro Referral

Sponsor introductory remarks on measure. (CR S14187)

December 20, 2005

SenateIntro Referral

Referred to the Committee on Banking, Housing, and Urban Affairs. (text of measure as introduced: CR S14187)

Banking, Housing, and Urban Affairs Committee

December 20, 2005

Floor Debate

1 member

What members said about S.Res. 340 on the floor

1 Democrat

Sen. Mary L. LandrieuD-LA · Dec 20, 2005

Mr. President, right after Katrina hit the financial services industry responded with compassion to their customers in Louisiana. Every bank, credit union, mortgage broker, and other mortgage holders instituted a 90 day forbearance period during which they did not collect mortgage payments. They deserve to be commended for this policy. They gave peace of mind to the thousands of families who lost their homes to Katrina and Rita, or whose homes were damaged by the storms.

Many of these forbearance periods have now ended, most effective December 1st. I have heard from homeowners throughout the state who are now being told by their lenders that in addition to making December's mortgage payment, they now also have to come up with a lump sum payment for the payments they missed. A lot of these people were under the impression that their loans would be restructured to add the three months on to the end of the loan term. Instead, they are getting a bill for thousands of dollars.

Can you imagine what it must be like for a person in New Orleans or St. Bernard Parish to get this notice from their lender? Their home is gone. Their community has been wiped out. We have lost over 200,000 homes in Louisiana to these storms and more than 18,000 businesses have been destroyed. Personal income in Louisiana has fallen by more than 25 percent in the third quarter of 2005. And now these homeowners--in this kind of situation--face foreclosure.

People in Louisiana are hard working and want to pay what they owe. Most lenders have reported that even with the forbearance period, close to 80 percent of borrowers continued to make their mortgage payments. People who have called my office have said that they can make the monthly payment, but the balloon payment is out of reach and will be for some time.

I was hoping that Congress could pass legislation before we adjourned to establish a Louisiana Recovery Corporation that would bring some stability and guide the redevelopment of the state after these storms. It would create an entity that will give homeowners the opportunity to sell destroyed properties if they feel that it would be in their best interest. The bill that we were working on with the leaders of the Senate Banking Committee--Chairman Shelby and Ranking Member Sarbanes-- as well as Congressman Baker in the House of Representatives, still needed a lot of work. We simply were not going to have time to complete the bill before the holidays. It will be one of my top priorities when we return in the Second Session.

In the meantime, homeowners in Louisiana need more time before they can begin making mortgage payments. Today I am submitting a sense of the Senate Resolution calling on mortgage lenders to continue their forbearance periods through March 31, 2006. This will give the Congress more time to consider and develop legislation to restore peace of mind to our homeowners.

It is my hope that this resolution will prompt the Senate to make passing legislation to give our homeowners peace of mind a priority when we return next year.

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Introduced in SenateIssued December 20, 2005

III

109th CONGRESS

1st Session

S. RES. 340

IN THE SENATE OF THE UNITED STATES

December 20, 2005

Ms. Landrieu submitted the following resolution; which was referred to the Committee on Banking, Housing, and Urban Affairs

RESOLUTION

Expressing the sense of the Senate that lenders holding mortgages on homes in communities of Louisiana devastated by Hurricanes Katrina and Rita should extend current mortgage payment forbearance periods and not foreclose on properties in those communities until such time that Congress can consider legislation to provide relief to those homeowners.

Whereas the Gulf Coast of the United States has experienced one of the worst hurricane seasons on record;

Whereas Hurricane Katrina and multiple levee breaks destroyed an estimated 205,330 homes in Louisiana;

Whereas 18,752 businesses in Louisiana, 41 percent of the overall number of businesses in the State, sustained catastrophic damage from Hurricane Katrina and Hurricane Rita;

Whereas according to the Bureau of Economic Analysis at the Department of Commerce, personal income has fallen more than 25 percent in Louisiana in the third quarter of 2005;

Whereas in the time since Hurricanes Katrina and Rita, the Small Business Administration has only approved 20 percent of disaster loan applications for homeowners in Louisiana and has a backlog of more than 101,400 applications for this assistance as of December 20, 2005;

Whereas of the 11,644 homeowner disaster loan applications that have been approved in Louisiana by the Small Business Administration, only 835 have been fully disbursed;

Whereas, in response to these circumstances, commercial banks, mortgage banks, credit unions, and other mortgage lenders instituted 90-day loan forbearance periods after Hurricane Katrina and did not require home owners in Louisiana to make mortgage payments until on or about December 1, 2005;

Whereas after the termination of the 90-day forbearance period, many home and business owners have received notice from their lenders that they face foreclosure unless they make a lump sum balloon payment in the amount of the mortgage payments previously subject to forbearance; and

Whereas foreclosure on homes and businesses in Louisiana will have a detrimental impact on the economy of the State, will deprive property owners of their equity at a time when they can least afford it, and will have a negative impact on lenders who will be holding properties that may not be readily saleable on the open market: Now, therefore, be it

That it is the sense of the Senate that—

(1)

Congress should consider legislation to provide relief to homeowners in Louisiana whose properties were devastated by Hurricanes Katrina and Rita; and

(2)

commercial banks, mortgage banks, credit unions, and other mortgage lenders should extend mortgage payment forbearance to March 31, 2006, in order to allow Congress the time to consider such legislation.