HR 4848 IHCommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

2d SessionCommentsClose CommentsPermalink

H. R. 4848CommentsClose CommentsPermalink

To save neighborhoods and keep families in their homes by encouraging mortgage loan modifications and suspending foreclosures and evictions.CommentsClose CommentsPermalink

IN THE HOUSE OF REPRESENTATIVESCommentsClose CommentsPermalink

April 26, 2012CommentsClose CommentsPermalink

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

A BILLCommentsClose CommentsPermalink

To save neighborhoods and keep families in their homes by encouraging mortgage loan modifications and suspending foreclosures and evictions.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 ‘Save Our Neighborhoods Act of 2012’.CommentsClose CommentsPermalink

SEC. 2. STAYS OF FORECLOSURES.

(a) Cause of Action-CommentsClose CommentsPermalink





(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





(2) INTERIM ORDER- The court shall, on the date of such filing, enter an order that shall--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) remain in effect for a period of 60 days, beginning on the date that the order is entered.CommentsClose CommentsPermalink





(3) LIMITATION- The mortgagor of the property subject to a federally related mortgage loan is only allowed to file one motion under subsection (a)(1).CommentsClose 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) That the mortgagor has a reasonable ability to make payments described under subsection (d)(5).CommentsClose CommentsPermalink





(2) Financial hardship of the mortgagor.CommentsClose CommentsPermalink





(3) That the property subject to the mortgage would be the primary residence of the mortgagor.CommentsClose CommentsPermalink





(d) Order Described- An order under this subsection shall, beginning on the date that is 60 days after the filing of the motion under subsection (a)(1)--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





(3) prohibit the assessment or collection of any late fees regarding payments on the federally related mortgage loan;CommentsClose CommentsPermalink





(4) toll the statute of limitations for any other applicable laws pertaining to the federally related mortgage loan;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





(6) require that the mortgagee apply such payments--CommentsClose CommentsPermalink





(A) first, to any taxes owed on the property;CommentsClose CommentsPermalink





(B) then, to any obligations relating to insurance, including homeowner’s insurance on the property;CommentsClose CommentsPermalink





(C) then, to any interest due on the mortgage for that period under the terms of the mortgage; andCommentsClose CommentsPermalink





(D) finally, to the principal amount due on the mortgage for that period under the terms of the mortgage.CommentsClose 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 (15 U.S.C. 1639c)) for mortgages; andCommentsClose CommentsPermalink





(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





(1) The fair market rents for the market area in which the property is located for similar property calculated for other Federal rental housing programs.CommentsClose CommentsPermalink





(2) Any other information the court determines appropriate.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 section 636(b)(1)(A) of title 28, United States Code, may issue an order in accordance with this section.CommentsClose CommentsPermalink





(h) Limitation on Remedies- The mortgagee’s remedies shall be limited to those that would be available as if the proceeding were a foreclosure proceeding.CommentsClose CommentsPermalink





(i) Definitions- In this Act:CommentsClose CommentsPermalink





(1) The term ‘federally related mortgage loan’ has the meaning given such term under section 3 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602).CommentsClose CommentsPermalink





(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





(A) reduction in or loss of income that was supporting the mortgage;CommentsClose CommentsPermalink





(B) change in household financial circumstances;CommentsClose CommentsPermalink





(C) recent or upcoming increase in the mortgagor’s monthly mortgage payment;CommentsClose CommentsPermalink





(D) an unavoidable increase in other expenses;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





(F) excessive monthly debt payments, including if the mortgagor has been using credit cards, a home equity loan or other credit to make the mortgage payment;CommentsClose CommentsPermalink





(G) the mortgagor has been subject to predatory lending practices; andCommentsClose CommentsPermalink





(H) other reasons for hardship identified and explained by the mortgagor.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

SEC. 3. REGULATORY AUTHORITY OF THE CONSUMER FINANCIAL PROTECTION BUREAU.

The Director of the Bureau of Consumer Financial Protection of the Federal Reserve System may make rules or issue guidance to carry out this Act.CommentsClose CommentsPermalink

SEC. 4. DURATION OF THIS ACT.

This Act shall be effective for 5 years, beginning on the date of enactment of this Act.CommentsClose CommentsPermalink