HR 5028 IHCommentsClose CommentsPermalink

To allow homeowners of moderate-value homes who are subject to mortgage foreclosure proceedings to remain in their homes as renters.CommentsClose CommentsPermalink

April 15, 2010CommentsClose CommentsPermalink

Mr. GRIJALVA (for himself and Ms. KAPTUR) introduced the following bill; which was referred to the Committee on Financial ServicesCommentsClose CommentsPermalink

To allow homeowners of moderate-value homes who are subject to mortgage foreclosure proceedings to remain in their homes as renters.CommentsClose CommentsPermalink

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Right to Rent Act of 2010’.CommentsClose CommentsPermalink

SEC. 2. RIGHT TO RENT HOME SUBJECT TO FORECLOSURE.

(a) Exercise of Right- If, at any time after notice under subsection (b) for an eligible mortgage is provided to the eligible mortgagor and before the commencement of the 7-day period that ends on the first date that the foreclosing creditor may first commence or execute such foreclosure pursuant to such notice, the eligible mortgagor under the eligible mortgage that is subject to such foreclosure provides notice in accordance with section 3, notwithstanding such foreclosure or any other interests in the property, the eligible mortgagor may, at the sole option of the eligible mortgagor, continue to occupy the foreclosed property during the 5-year period that begins upon the commencement of such occupancy, subject to the requirements of subsection (c).CommentsClose CommentsPermalink





(b) Limitation on Timing of Foreclosure; Notice of Default and Right to Rent- Notwithstanding any other provision of law or any contract, a foreclosure of an eligible mortgage may not be commenced or executed before the expiration of the 25-day period (not including Saturdays, Sundays, and legal public holidays) beginning upon the receipt, by the eligible mortgagor, of written notice provided by the foreclosing creditor for the mortgage that--CommentsClose CommentsPermalink





(1) clearly states that--CommentsClose CommentsPermalink





(A) the eligible mortgagor is in default on the mortgage; andCommentsClose CommentsPermalink





(B) foreclosure on the mortgage may or will be commenced on account of such default;CommentsClose CommentsPermalink





(2) clearly states that the eligible mortgagor has the right, notwithstanding foreclosure, to continue to occupy the foreclosed property in accordance with this Act, and sets forth the terms of such occupancy under subsections (a) and (c); andCommentsClose CommentsPermalink





(3) clearly identifies the first date, pursuant to this section and any other provisions of law and contract, that such foreclosure may be commenced.CommentsClose CommentsPermalink





(c) Terms of Periodic Tenancy- Occupancy, by an eligible mortgagor, of a foreclosed property pursuant to subsection (a) shall be under a periodic month-to-month tenancy under which the owner of the property may terminate the tenancy for material breach but shall have no authority, at will, to terminate the tenancy during the occupancy pursuant to subsection (a) if the mortgagor--CommentsClose CommentsPermalink





(1) timely pays to the owner of the foreclosed property rent on a monthly basis in the amount of the fair market rent for the property determined in accordance with section 4; andCommentsClose CommentsPermalink





(2) uses property as the principal residence of the mortgagor.CommentsClose CommentsPermalink

SEC. 3. REQUIRED NOTICE.

With respect to an eligible mortgage for which notice under section 2(b) has been provided, notice in accordance with this section is notice that--CommentsClose CommentsPermalink





(1) is made in writing;CommentsClose CommentsPermalink





(2) is submitted, by a means under which the act of delivery is recorded, to--CommentsClose CommentsPermalink





(A) the court having jurisdiction and venue to conduct the covered foreclosure proceeding for the eligible mortgage or, in the case of nonjudicial foreclosure, the court in which an action is brought pursuant to section 5; andCommentsClose CommentsPermalink





(B) the foreclosing creditor; andCommentsClose CommentsPermalink





(3) states that the eligible mortgagor is exercising the authority under section 2(a) to continue to occupy the foreclosed property.CommentsClose CommentsPermalink

SEC. 4. DETERMINATION OF FAIR MARKET RENT.

(a) Initial Determination- For purposes of this Act, the fair market rent for a foreclosed property involved in a covered foreclosure proceeding shall be the amount that is determined by an independent appraiser who is licensed or certified, as applicable, to conduct appraisals in the jurisdiction in which the property is located, who shall be appointed for such purpose by the court conducting such proceeding or hearing an action pursuant to section 5.CommentsClose CommentsPermalink





(b) Periodic Adjustments- The fair market rent determined under subsection (a) for a foreclosed property shall be adjusted annually to reflect changes in the owners’ equivalent rent of primary residence component, for the appropriate city, region, or class of city, as available, of the Consumer Price Index for All Urban Consumers of the Bureau of Labor Statistics of the Department of Labor.CommentsClose CommentsPermalink





(c) Redetermination- If the owner of a foreclosed property or the eligible mortgagor under the eligible mortgage requests the court described in subsection (a) to redetermine the fair market rent for a foreclosed property determined pursuant to this section (as such amount may have been adjusted pursuant to subsection (b)) and agrees to pay any costs of such redetermination (including costs of the appraisal involved), the court shall provide for redetermination of the fair market rent for the foreclosed property in the manner provided under subsection (a), except that no such redetermination shall be made pursuant to a request under this subsection made before the expiration of the 12-month period beginning upon the most recent redetermination conducted at the request of the same party.CommentsClose CommentsPermalink

SEC. 5. NONJUDICIAL FORECLOSURE PROCEEDINGS.

In the case of any covered foreclosure proceeding that is not conducted or administered by a court, the eligible mortgagor may bring an action in an appropriate court of the State in which the foreclosed property is located for a determination of fair market rent for the foreclosed property for purposes of this Act, by filing notice in accordance with section 3 with such court and otherwise complying with the rules of such court.CommentsClose CommentsPermalink

SEC. 6. NO BAR TO FORECLOSURE.

This Act may not be construed to delay, or otherwise modify, affect, or alter any right of a creditor under an eligible mortgage to foreclose on the mortgage and to sell the foreclosed property in connection with such foreclosure, except that the right of any owner of the property to possession of the property shall be subject to the leasehold interest established pursuant to section 2(c).CommentsClose CommentsPermalink

SEC. 7. RIGHT TO REINSTATEMENT.

This Act may not be construed to affect any right of any eligible mortgagor to reinstatement of an eligible mortgage, including any right established under contract or State law.CommentsClose CommentsPermalink

SEC. 8. JURISDICTION OF FEDERAL COURTS.

At the option of the eligible mortgagor, a proceeding under section 4 or 5 shall be removed to the appropriate district court of the United States in accordance with section 1441 of title 28, United States Code.CommentsClose CommentsPermalink

SEC. 9. EFFECT ON STATE LAW.

(a) Foreclosure Laws- This Act does not annul, alter, affect, or exempt any person subject to the provisions of this Act from complying with the laws of any State regarding foreclosure on residential properties, except to the extent that such laws are inconsistent with any provision of this Act, and then only to the extent of such inconsistency.CommentsClose CommentsPermalink





(b) Landlord-Tenant Laws- Nothing in this Act may be construed to not annul, alter, affect, or exempt any such tenancy created pursuant to section 2(c) from any applicable State or local laws regarding the rights or responsibilities of landlords or tenants.CommentsClose CommentsPermalink

SEC. 10. OVERSIGHT BY HUD.

The Secretary of Housing and Urban Development shall--CommentsClose CommentsPermalink





(1) monitor compliance with the requirements under this Act;CommentsClose CommentsPermalink





(2) make available, and provide, appropriate assistance to eligible mortgagors in exercising their rights under this Act;CommentsClose CommentsPermalink





(3) conduct outreach activities appropriate to inform eligible mortgagors of the provisions of this Act; andCommentsClose CommentsPermalink





(4) submit to the Congress, not less than annually, reports describing the implementation of this Act, the extent to which this Act is utilized by eligible mortgagors, and any issues regarding such implementation or utilization.CommentsClose CommentsPermalink

SEC. 11. DEFINITIONS.

For purposes of this Act, the following definitions apply:CommentsClose CommentsPermalink





(1) COVERED FORECLOSURE PROCEEDING- The term ‘covered foreclosure proceeding’ means a foreclosure proceeding with respect to an eligible mortgage, and includes any foreclosure proceeding authorized under the law of the applicable State, including judicial and non-judicial foreclosure proceedings.CommentsClose CommentsPermalink





(2) ELIGIBLE MORTGAGOR- The term ‘eligible mortgagor’ means a mortgagor under an eligible mortgage.CommentsClose CommentsPermalink





(3) ELIGIBLE MORTGAGE- The term ‘eligible mortgage’ means a first or subordinate mortgage--CommentsClose CommentsPermalink





(A) on a property that--CommentsClose CommentsPermalink





(i) is a single family property;CommentsClose CommentsPermalink





(ii) has been used as the principal residence of the eligible mortgagor for a period of not less than 2 years immediately preceding the initiation of the covered foreclosure proceeding involved; andCommentsClose CommentsPermalink





(iii) had a purchase price, at the time purchased by the eligible mortgagor, that is less than the median purchase price for residences that are located in--CommentsClose CommentsPermalink





(I) the same metropolitan statistical area; orCommentsClose CommentsPermalink





(II) if the property is not located in a metropolitan statistical area or information for the area is not available, the same State; andCommentsClose CommentsPermalink





(B) that was originated before July 1, 2007.CommentsClose CommentsPermalink





For purposes of subparagraph (A)(iii), the median purchase price of residences located within a metropolitan area or State shall be determined according to information collected and made available by the National Association of Realtors for such area or State for the most recently completed month for which such information is available.CommentsClose CommentsPermalink





(4) FORECLOSED PROPERTY- The term ‘foreclosed property’ means, with respect to a covered foreclosure proceeding, the single family property that is subject to the eligible mortgage being foreclosed under the proceeding.CommentsClose CommentsPermalink





(5) FORECLOSING CREDITOR- The term ‘foreclosing creditor’ means, with respect to a covered foreclosure proceeding, the creditor that is foreclosing the eligible mortgage through such proceeding.CommentsClose CommentsPermalink





(6) OWNER- The term ‘owner’ means, with respect to a foreclosed property, the person who has title to the property pursuant to the foreclosure proceeding for the property, and any successor or assign of such person.CommentsClose CommentsPermalink





(7) SINGLE FAMILY PROPERTY- The term ‘single family property’ means--CommentsClose CommentsPermalink





(A) a structure consisting of 1 to 4 dwelling units;CommentsClose CommentsPermalink





(B) a dwelling unit in a multi-unit condominium property together with an undivided interest in the common areas and facilities serving the property; orCommentsClose CommentsPermalink





(C) a dwelling unit in a multi-unit project for which purchase of stock or a membership interest entitles the purchaser to permanent occupancy of that unit.CommentsClose CommentsPermalink

SEC. 12. APPLICABILITY AND SUNSET.

(a) Applicability- Subject to subsection (b), this Act shall apply to any covered foreclosure proceeding that has not been finally adjudicated as of the date of the enactment of this Act.CommentsClose CommentsPermalink





(b) Sunset- This Act shall not apply to any foreclosure proceeding commenced after the expiration of the 5-year period beginning on the date of the enactment of this Act.CommentsClose CommentsPermalink