S 896

 
A bill to prevent mortgage foreclosures and enhance mortgage credit availability.
Sponsor: Christopher J. Dodd (D) CT
 
Status: Passed
 
Govit Voted No 83%
H600400M
Gov Voted Yes 87%
H600400G
 
 
 
 
 
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Summary:
4/27/2009--Introduced.Helping Families Save Their Homes Act of 2009 - Amends the National Housing Act to authorize the Secretary of Housing and Urban Development (HUD) to implement a program solely to encourage loan modifications for eligible delinquent mortgages through the payment of insurance benefits and assignment of the mortgage to the Secretary and the subsequent modification of the terms of the mortgage according to a loan modification approved by the mortgagee.Requires the Comptroller General to report to certain congressional committees on the volume of mortgage modifications reported to the Office of the Comptroller of the Currency and the Office of Thrift Supervision (OTS), under the mortgage metrics program of each such Office, during the previous quarter.Shields servicers from liability for implementing mortgage loan modifications or loss mitigation plans if they are in compliance with fiduciary duties required by the Truth in Lending Act (including any refinancing undertaken pursuant to standard loan modification, sale, or disposition guidelines issued by the Secretary of the Treasury). Amends the National Housing Act to modify the HOPE for Homeowners Program (HOPE).Requires mortgagor certification to HUD that the mortgagor has neither intentionally defaulted on an existing mortgage, nor provided false information, nor (as under existing law) been convicted for fraud during the 10-year period ending upon the insurance of the mortgage under this Act.Authorizes the Secretary of Housing and Urban Development (HUD) to permit the establishment of a second lien on a property under an eligible mortgage to be insured, for the purpose of facilitating payment of closing or refinancing costs by a state or locality using funds provided: (1) under the HOME Investment Partnerships program; (2) under the community development block grants program under the Housing and Community Development Act of 1974; or (3) by a state or local housing finance agency.Authorizes HUD to provide exceptions to primary residence and exclusive present ownership interest requirements for any mortgagor who has inherited a property or has relocated to a new jurisdiction, and is in the process of trying to sell such property or has been unable to sell it due to adverse market conditions.Bans from the HOPE program mortgagors whose net worth exceeds $1 million.Authorizes the Secretary to establish a payment of up to $1,000 per insured loan to the loan servicer of the existing senior mortgage for every loan insured under HOPE.Directs the Secretary to establish, if feasible, an auction to refinance eligible mortgages on a wholesale or bulk basis.Reduces by $2.316 billion the $700 billion limit on the Secretary of the Treasury's authority to purchase troubled assets under the Troubled Asset Relief Program (TARP) (in order to offset the costs of program changes).Limits participation in the origination of an FHA-insured loan to a person or entity approved by the Secretary as a mortgagee, unless the Secretary otherwise authorizes such participation.Prohibits approval as a mortgagee of any applicant any of whose officers, partners, directors, principals, managers, supervisors, loan processors, loan underwriters, or loan originators is currently suspended, debarred, otherwise restricted, indicted or convicted of certain offenses, engaged in nonconforming business practices, or subject to unresolved findings of a HUD audit, investigation, or review.Requires an approved mortgagee to notify the Secretary immediately of any such sanctions applied to it or any of its personnel, including revocation of a state-issued mortgage loan originator license or similar declaration of ineligibility under state law.Directs the Secretary to: (1) expand the existing process for reviewing new applicants for participation in FHA-insured mortgages on one- to four-family residences in order to identify applicants who represent a high risk to the Mutual Mortgage Insurance Fund (MMIF); and (2) implement procedures that, for mortgagees approved during the 12 months before enactment of this Act, expand the number of mortgages originated by such mortgagees reviewed for compliance with laws, regulations, and policies, including a process for random reviews and one for reviews based on volume of such mortgages.Amends the Federal Deposit Insurance Act (FDIA) and the Federal Credit Union Act (FCUA) to: (1) increase deposit insurance coverage permanently to $250,000; and (2) increase the borrowing authority of the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA).Amends the FDIA to: (1) extend to eight years the time period applicable to a Deposit Insurance Fund (DIF) restoration plan; and (2) revise requirements for special assessments to recover the loss to the DIF arising from actions taken to contain systemic risk with respect to certain insured depository institutions.Amends the FCUA to direct the NCUA Board to establish a National Credit Union Share Insurance Fund Restoration Plan whenever the Board projects that the equity ratio of the National Credit Union Share Insurance Fund will fall below a minimum designated equity ratio.Requires the Secretary of the Treasury, when using certain funds under the Emergency Economic Stabilization Act of 2008 (EESA) to prevent and mitigate foreclosures on residential properties (including mortgage modifications), to provide that the limitation on the maximum original principal obligation of a mortgage that may be assisted shall not be less than the dollar amount limitation on the maximum original principal obligation of a mortgage that may be purchased by the Federal Home Loan Mortgage Corporation (Freddie Mac) for the area in which the property involved in the transaction is located.Amends the National Housing Act with respect to insurance of home equity conversion mortgages for the elderly. Redefines a mortgage on the alternative kind of leasehold under such insurance program as one that has a term that ends no earlier than the minimum number of years, as specified by HUD, beyond the actuarial life expectancy of the mortgagor or comortgagor, whichever is the later date. (Currently, a lease having a period of not less than 10 years to run beyond the mortgage maturity date.)Expresses the sense of Congress that the Secretary of the Treasury should use amounts made available in this Act to purchase mortgage revenue bonds for single-family housing issued through state housing finance agencies and through local governments and their agencies.Nationwide Mortgage Fraud Task Force Act of 2009 - Establishes in the Department of Justice the Nationwide Mortgage Fraud Task Force to address mortgage fraud in the United States.Requires the Task Force to: (1) establish federal, state, and local coordinating entities to organize initiatives to address mortgage fraud; (2) provide training to federal, state, and local law enforcement and prosecutorial agencies with respect to mortgage fraud; (3) collect and disseminate data with respect to mortgage fraud; and (4) perform other functions determined by the Attorney General to enhance the detection of, prevention of, and response to mortgage fraud in the United States.Authorizes the Task Force to: (1) initiate and coordinate federal mortgage fraud investigations and, through the coordinating entities, state and local investigations; (2) establish a toll-free hotline for reporting mortgage fraud and providing the public with access to related information and resources; (3) create a database about suspensions and revocations of mortgage industry licenses and certifications to facilitate the sharing of such information by states; and (4) make recommendations and propose federal, state, and local government legislation.Expresses the sense of Congress that mortgage holders, institutions, and mortgage servicers should not initiate a foreclosure proceeding or a foreclosure sale on any homeowner until foreclosure mitigation provisions of title II of this Act, and the President's "Homeowner Affordability and Stability Plan," have been implemented and determined to be operational.States that the foreclosure moratorium should apply only for first mortgages secured by the owner's principal dwelling. Sets forth duties of the consumer to maintain property and to respond to reasonable inquiries.
 
Text of Legislation:

S 896 ES

111th CONGRESS

1st Session

S. 896

AN ACT

To prevent mortgage foreclosures and enhance mortgage credit availability.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title- This Act may be cited as the ‘Helping Families Save Their Homes Act of 2009’.

    (b) Table of Contents- The table of contents of this Act is the following:

      Sec. 1. Short title; table of contents.

TITLE I--PREVENTION OF MORTGAGE FORECLOSURES

      Sec. 101. Guaranteed rural housing loans.

      Sec. 102. Modification of housing loans guaranteed by the Department of Veterans Affairs.

      Sec. 103. Additional funding for HUD programs to assist individuals to better withstand the current mortgage crisis.

      Sec. 104. Mortgage modification data collecting and reporting.

      Sec. 105. Neighborhood Stabilization Program Refinements.

TITLE II--FORECLOSURE MITIGATION AND CREDIT AVAILABILITY

      Sec. 201. Servicer safe harbor for mortgage loan modifications.

      Sec. 202. Changes to HOPE for Homeowners Program.

      Sec. 203. Requirements for FHA-approved mortgagees.

      Sec. 204. Enhancement of liquidity and stability of insured depository institutions to ensure availability of credit and reduction of foreclosures.

      Sec. 205. Application of GSE conforming loan limit to mortgages assisted with TARP funds.

      Sec. 206. Mortgages on certain homes on leased land.

      Sec. 207. Sense of Congress regarding mortgage revenue bond purchases.

TITLE III--MORTGAGE FRAUD TASK FORCE

      Sec. 301. Sense of the Congress on establishment of a Nationwide Mortgage Fraud Task Force.

TITLE IV--FORECLOSURE MORATORIUM PROVISIONS

      Sec. 401. Sense of the Congress on foreclosures.

      Sec. 402. Public-Private Investment Program; Additional Appropriations for the Special Inspector General for the Troubled Asset Relief Program.

      Sec. 403. Removal of requirement to liquidate warrants under the TARP.

      Sec. 404. Notification of sale or transfer of mortgage loans.

TITLE V--FARM LOAN RESTRUCTURING

      Sec. 501. Congressional Oversight Panel special report.

TITLE VI--ENHANCED OVERSIGHT OF THE TROUBLED ASSET RELIEF PROGRAM

      Sec. 601. Enhanced oversight of the Troubled Asset Relief Program.

TITLE VII--PROTECTING TENANTS AT FORECLOSURE ACT

      Sec. 701. Short title.

      Sec. 702. Effect of foreclosure on preexisting tenancy.

      Sec. 703. Effect of foreclosure on section 8 tenancies.

      Sec. 704. Sunset.

TITLE VIII--COMPTROLLER GENERAL ADDITIONAL AUDIT AUTHORITIES

      Sec. 801. Comptroller General additional audit authorities.

TITLE I--PREVENTION OF MORTGAGE FORECLOSURES

SEC. 101. GUARANTEED RURAL HOUSING LOANS.

    (a) Guaranteed Rural Housing Loans- Section 502(h) of the Housing Act of 1949 (42 U.S.C. 1472(h)) is amended--

      (1) by redesignating paragraphs (13) and (14) as paragraphs (16) and (17), respectively; and

      (2) by inserting after paragraph (12) the following new paragraphs:

      ‘(13) LOSS MITIGATION- Upon default or imminent default of any mortgage guaranteed under this subsection, mortgagees shall engage in loss mitigation actions for the purpose of providing an alternative to foreclosure (including actions such as special forbearance, loan modification, pre-foreclosure sale, deed in lieu of foreclosure, as required, support for borrower housing counseling, subordinate lien resolution, and borrower relocation), as provided for by the Secretary.

      ‘(14) PAYMENT OF PARTIAL CLAIMS AND MORTGAGE MODIFICATIONS- The Secretary may authorize the modification of mortgages, and establish a program for payment of a partial claim to a mortgagee that agrees to apply the claim amount to payment of a mortgage on a 1- to 4-family residence, for mortgages that are in default or face imminent default, as defined by the Secretary. Any payment under such program directed to the mortgagee shall be made at the sole discretion of the Secretary and on terms and conditions acceptable to the Secretary, except that--

        ‘(A) the amount of the partial claim payment shall be in an amount determined by the Secretary, and shall not exceed an amount equivalent to 30 percent of the unpaid principal balance of the mortgage and any costs that are approved by the Secretary;

        ‘(B) the amount of the partial claim payment shall be applied first to any outstanding indebtedness on the mortgage, including any arrearage, but may also include principal reduction;

        ‘(C) the mortgagor shall agree to repay the amount of the partial claim to the Secretary upon terms and conditions acceptable to the Secretary;

        ‘(D) expenses related to a partial claim or modification are not to be charged to the borrower;

        ‘(E) the Secretary may authorize compensation to the mortgagee for lost income on monthly mortgage payments due to interest rate reduction;

        ‘(F) the Secretary may reimburse the mortgagee from the appropriate guaranty fund in connection with any activities that the mortgagee is required to undertake concerning repayment by the mortgagor of the amount owed to the Secretary;

        ‘(G) the Secretary may authorize payments to the mortgagee on behalf of the borrower, under such terms and conditions as are defined by the Secretary, based on successful performance under the terms of the mortgage modification, which shall be used to reduce the principal obligation under the modified mortgage; and

        ‘(H) the Secretary may authorize the modification of mortgages with terms extended up to 40 years from the date of modification.

      ‘(15) ASSIGNMENT-

        ‘(A) PROGRAM AUTHORITY- The Secretary may establish a program for assignment to the Secretary, upon request of the mortgagee, of a mortgage on a 1- to 4-family residence guaranteed under this chapter.

        ‘(B) PROGRAM REQUIREMENTS-

          ‘(i) IN GENERAL- The Secretary may encourage loan modifications for eligible delinquent mortgages or mortgages facing imminent default, as defined by the Secretary, through the payment of the guaranty and assignment of the mortgage to the Secretary and the subsequent modification of the terms of the mortgage according to a loan modification approved under this section.

          ‘(ii) ACCEPTANCE OF ASSIGNMENT- The Secretary may accept assignment of a mortgage under a program under this subsection only if--

            ‘(I) the mortgage is in default or facing imminent default;

            ‘(II) the mortgagee has modified the mortgage or qualified the mortgage for modification sufficient to cure the default and provide for mortgage payments the mortgagor is reasonably able to pay, at interest rates not exceeding current market interest rates; and

            ‘(III) the Secretary arranges for servicing of the assigned mortgage by a mortgagee (which may include the assigning mortgagee) through procedures that the Secretary has determined to be in the best interests of the appropriate guaranty fund.

        ‘(C) PAYMENT OF GUARANTY- Under the program under this paragraph, the Secretary may pay the guaranty for a mortgage, in the amount determined in accordance with paragraph (2), without reduction for any amounts modified, but only upon the assignment, transfer, and delivery to the Secretary of all rights, interest, claims, evidence, and records with respect to the mortgage, as defined by the Secretary.

        ‘(D) DISPOSITION- After modification of a mortgage pursuant to this paragraph, and assignment of the mortgage, the Secretary may provide guarantees under this subsection for the mortgage. The Secretary may subsequently--

          ‘(i) re-assign the mortgage to the mortgagee under terms and conditions as are agreed to by the mortgagee and the Secretary;

          ‘(ii) act as a Government National Mortgage Association issuer, or contract with an entity for such purpose, in order to pool the mortgage into a Government National Mortgage Association security; or

          ‘(iii) re-sell the mortgage in accordance with any program that has been established for purchase by the Federal Government of mortgages insured under this title, and the Secretary may coordinate standards for interest rate reductions available for loan modification with interest rates established for such purchase.

        ‘(E) LOAN SERVICING- In carrying out the program under this subsection, the Secretary may require the existing servicer of a mortgage assigned to the Secretary under the program to continue servicing the mortgage as an agent of the Secretary during the period that the Secretary acquires and holds the mortgage for the purpose of modifying the terms of the mortgage. If the mortgage is resold pursuant to subparagraph (D)(iii), the Secretary may provide for the existing servicer to continue to service the mortgage or may engage another entity to service the mortgage.’.

    (b) Technical Amendments- Subsection (h) of section 502 of the Housing Act of 1949 (42 U.S.C. 1472(h)) is amended--

      (1) in paragraph (5)(A), by striking ‘(as defined in paragraph (13)’ and inserting ‘(as defined in paragraph (17)’; and

      (2) in paragraph (18)(E)(as so redesignated by subsection (a)(2)), by--

        (A) striking ‘paragraphs (3), (6), (7)(A), (8), and (10)’ and inserting ‘paragraphs (3), (6), (7)(A), (8), (10), (13), and (14)’; and

        (B) striking ‘paragraphs (2) through (13)’ and inserting ‘paragraphs (2) through (15)’.

    (c) Procedure-

      (1) IN GENERAL- The promulgation of regulations necessitated and the administration actions required by the amendments made by this section shall be made without regard to--

        (A) the notice and comment provisions of section 553 of title 5, United States Code;

        (B) the Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices of proposed rulemaking and public participation in rulemaking; and

        (C) chapter 35 of title 44, United States Code (commonly known as the ‘Paperwork Reduction Act’).

      (2) CONGRESSIONAL REVIEW OF AGENCY RULEMAKING- In carrying out this section, and the amendments made by this section, the Secretary shall use the authority provided under section 808 of title 5, United States Code.

SEC. 102. MODIFICATION OF HOUSING LOANS GUARANTEED BY THE DEPARTMENT OF VETERANS AFFAIRS.


Full Text of Legislation
 
Subject Name:
 
All Actions:

Actions Date
Action Text
4/24/2009
Introduced in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time.
4/30/2009
Measure laid before Senate by unanimous consent.
5/1/2009
Considered by Senate.
5/4/2009
Considered by Senate.
5/5/2009
Considered by Senate.
5/6/2009
Considered by Senate.
5/6/2009
Received in the House.
5/6/2009
Message on Senate action sent to the House.
5/6/2009
Held at the desk.
5/6/2009
5/6/2009
Passed Senate with an amendment by Yea-Nay Vote. 91 - 5. Record Vote Number: 185.
5/19/2009
Mr. Frank (MA) moved to suspend the rules and pass the bill, as amended.
5/19/2009
Considered under suspension of the rules.
5/19/2009
DEBATE - The House proceeded with forty minutes of debate on S. 896.
5/19/2009
At the conclusion of debate, the Yeas and Nays were demanded and ordered. Pursuant to the provisions of clause 8, rule XX, the Chair announced that further proceedings on the motion would be postponed.
5/19/2009
Considered as unfinished business.
5/19/2009
Message on House action received in Senate and at desk: House amendment to Senate bill.
5/19/2009
Senate agreed to the House amendment by Unanimous Consent.
5/19/2009
Message on Senate action sent to the House.
5/19/2009
On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 367 - 54, 1 Present (Roll no. 271).
 
Titles:

A bill to prevent mortgage foreclosures and enhance mortgage credit availability.
Helping Families Save Their Homes Act of 2009
Nationwide Mortgage Fraud Task Force Act of 2009
Helping Families Save Their Homes Act of 2009
Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009
Protecting Tenants at Foreclosure Act of 2009
Public-Private Investment Program Improvement and Oversight Act of 2009
Helping Families Save Their Homes Act of 2009
Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009
Protecting Tenants at Foreclosure Act of 2009
Public-Private Investment Program Improvement and Oversight Act of 2009
 
Committee:

Committees not available.
 
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