From Rep. John Conyers: Easing Homeowners’ Debt

To the Editor:

Re “Homeowners Need Help” (editorial, Aug. 22):

John Conyers, Jr.

You are right that the federal government could do much more to help homeowners climb out from underwater mortgages, and that banks have done far less than they can for homeowners seeking relief.

The key to unlocking the mortgage foreclosure crisis is the passage of a federal law allowing homeowners to reduce their mortgage debt to no more than the current value of their property.

Homeowners and the federal government have not had much leverage to get banks to stop the mortgage crisis. Current law discourages banks from voluntarily making loan adjustments that homeowners need. Giving homeowners the right to reduce their debt through recognized legal processes would no doubt provide additional incentives for lenders to work with borrowers.

This is neither a new nor a radical proposal. In 1986, Congress passed a law that allowed family farmers to modify their mortgages in response to a similar foreclosure crisis. It was so successful that in 2005, with bipartisan support, it was made permanent law. If only we could do for struggling homeowners today what we did for family farmers 25 years ago.

Last Congress, legislation that would have provided such a remedy to homeowners passed the House but died in the Senate. The bill was reintroduced, and it is my hope that Congress will take up this essential legislation soon.

JOHN CONYERS Jr.
Washington, Aug. 29, 2011

The writer is the ranking Democrat on the House Judiciary Committee.