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H.R.4848 - Save Our Neighborhoods Act of 2012
To save neighborhoods and keep families in their homes by encouraging mortgage loan modifications and suspending foreclosures and evictions.
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Mr. CLARKE of Michigan (for himself, Mr. LEWIS of Georgia, Mr. CONYERS, Mr. GEORGE MILLER of California, Mr. CLEAVER, Ms. KAPTUR, Mr. GRIJALVA, Ms. WATERS, Mr. CARSON of Indiana, Mr. JACKSON of Illinois, Ms. CLARKE of New York, and Mr. ELLISON) introduced the following bill; which was referred to the Committee on the Judiciary, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink
SECTION 1. SHORT TITLE.
SEC. 2. STAYS OF FORECLOSURES.
(1) IN GENERAL- A mortgagor of a property subject to a federally related mortgage loan may file a motion before a court in the jurisdiction in which the property is located for an order under subsection (d).CommentsClose CommentsPermalink
(A) stay any foreclosure proceedings (including proceedings before a State court) that have been brought against the property that is subject to the federally related mortgage loan; andCommentsClose CommentsPermalink
(b) Consensual Revision of Mortgage- The mortgagor and mortgagee shall meet not later than 30 days after the mortgagor files under subsection (a). Not later than 15 days prior to that meeting, the mortgagee shall provide the mortgagor with a list of local housing counseling agencies approved by the Secretary of Housing and Urban Development. The mortgagor may be accompanied by a counselor from such an agency. If the mortgagor and mortgagee execute a consensually modified mortgage agreement within 60 days of the court granting the stay, the order under subsection (a)(2) would terminate. If at the end of the 60 days an agreement has not been reached, the court may issue an order under subsection (d) in accordance with subsection (c). The mortgagor may request not more than 1 additional meeting after the first meeting and before the end of the period during which foreclosure proceedings are stayed pursuant to an order under subsection (a) or (d). The mortgagee shall comply with that request not later than 30 days after that request.CommentsClose CommentsPermalink
(c) Standard of Proof- The court shall grant a motion under subsection (a)(1) for an order under subsection (d), if the mortgagor demonstrates by a preponderance of the evidence the following:CommentsClose CommentsPermalink
(1) stay any foreclosure proceedings that have been brought against the property that is subject to the federally related mortgage loan, including proceedings before a State court and eviction or detainer proceedings in a non-judicial foreclosure State;CommentsClose CommentsPermalink
(2) remain in effect for a period of up to 3 years beginning on the date that the order is entered, except that the period shall terminate if an agreement under subsection (b) is executed during such period;CommentsClose CommentsPermalink
(5) require that the mortgagor make payments in an amount the court determines appropriate, which may include the fair market rental value of the property (determined by the court in accordance with subsection (f)), to the mortgagee at such times as the court determines appropriate; andCommentsClose CommentsPermalink
(e) Result of Failure To Revise During Stay of Foreclosure- If an order under subsection (d) terminates and the mortgagor and mortgagee have not submitted an agreement described in subsection (b) to the court on or before the date that the order terminates, the court shall enter an order--CommentsClose CommentsPermalink
(1) ordering an appraisal to determine the fair market value of the property to be performed by a licensed appraiser approved by the Secretary of Housing and Urban Development;CommentsClose CommentsPermalink
(2) if the fair market value of the property, as determined by the appraiser is less than the principal remaining on the mortgage loan, adjusting the principal amount to the fair market value, giving consideration to the appraisal and any other information the court determines appropriate;CommentsClose CommentsPermalink
(3) ordering reasonable interest on the principal as adjusted under paragraph (2) based on the average prime offer rate (as such term is defined in section 129C of the Truth in Lending Act (
(4) if the fair market value is greater than the principal remaining on the mortgage loan, ordering payments set at a reasonable interest rate on the remaining principal based on the average prime offer rate for mortgages on that date.CommentsClose CommentsPermalink
(f) Determination of Fair Market Rental Value- In determining the fair market rental value of a property for purposes of subsection (d)(5), the court shall consider the following:CommentsClose CommentsPermalink
(g) Authority of Magistrate Judges- Any proceeding regarding a motion under subsection (a) may be heard by a magistrate judge of the United States, and that magistrate judge, notwithstanding
(2) The term ‘financial hardship’ means any financial burden of a mortgagor that causes that mortgagor to be reasonably unable to make a payment on that mortgage, including--CommentsClose CommentsPermalink
(E) a lack of cash reserves to maintain payment on the mortgage and cover basic living expenses at the same time (cash reserves include assets such as cash savings, money market funds, stocks or bonds, but exclude retirement accounts);CommentsClose CommentsPermalink
(3) In determining whether a lending practice is predatory, the court shall consider whether the mortgagor has been subject to practices including but not limited to: abusive collection practices; balloon payments; encouragement of default; repeat financing where the equity is depleted as a result of financing; excessive fees; excessive interest rates; fraud, deception, and abuse; high loan-to-value ratio; lending without regard to ability to repay; loan flipping; mandatory arbitration clauses; payday lending; pre-payment penalties; refinancing of mortgages with a loan that does not provide a tangible economic benefit to the borrower; refinancing unsecured debt; payment of single-premium credit insurance; the process of referring borrowers who qualify for lower-cost financing to high-cost lenders; subprime lending; high yield-spread premiums.CommentsClose CommentsPermalink