Helping Families Save Their Homes Act

February 26, 2009

Yesterday, CBO released acost estimate ofH.R. 1106, the Helping Families Save Their Homes Act, as introduced on February 23, 2008. CBO estimates that enacting H.R. 1106 would increase direct spending by about $8 billion over the 2009-2014 period, and would reduce direct spending by about $15 billion over the 2009-2019 period. Enacting H.R 1106 would increase revenues by $19 million over the 2009-2014 period and by $23 million over the 2009-2019 period.

The Helping Families Save Their Homes Act would:

  • Authorize bankruptcy courts to modify the terms of some mortgages on principal residences during Chapter 13 bankruptcy proceedings;
  • Allow the Federal Housing Administration and the Rural Housing Service to pay claims on losses stemming from the judicial modification of mortgage loans that they insure;
  • Modify the Hope for Homeowners loan-guarantee program authorized by the Housing and Economic Recovery Act of 2008;
  • Permanently increase the amount of deposits insured by the Federal Deposit Insurance Corporationand the National Credit Union Administration from $100,000 to $250,000 and modify other terms of both deposit insurance programs; and
  • Protect mortgage servicers from legal liability if they perform loan modifications according to specific criteria established under the legislation.

CBO has completed several cost estimates since January 2009 for bills with provisions similar to those in the Helping Families Save Their Homes act, which provide more detail on CBO's analysis of various provisions of this bill. Thosecost estimatesinclude:

  • H.R. 200, the Helping Families Save Their Homes in Bankruptcy Act, as ordered reported by the House Committee on the Judiciary on January 27, 2009;
  • H.R. 786, a bill to make permanent the temporary increase in deposit insurance coverage, as ordered reported by the House Committee on Financial Services on February 4, 2009;
  • H.R. 787, a bill to make improvements in the Hope for Homeowners program, as ordered reported by the House Committee on Financial Services on February 4, 2009; and
  • H.R. 788, a bill to provide safe harbor for mortgage servicers who engage in specified mortgage loan modifications, as ordered reported by the Committee on Financial Services on February 4, 2009.