,i #aacth ,,congress #ast ,session ,h4 ,r4 #beab ,,in ,,the ,,house ,,of ,,representatives ,june #bf1 #bjac ,ms4 ,de,lauro introduced the following bill2 which was referred to the ,committee on ,financial ,services ,a ,,bill ,to amend the ,truth in ,lending ,act to establish clear regulatory standards for mortgage servicers1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,regulation of ,mortgage ,servicing ,act of #bjac4 #b4 ,standards for mortgage servicers 7a7 ,in general ,chapter #b of the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afca et seq47 is amended by inserting after section #abi;,h the following new section3 #abi;,i4 ,standards for servicers of residential mortgages 7a7 ,definitions ,in this section1 the following definitions shall apply3 7#a7 ,alternative to foreclosure ,the term alternative to foreclosure-- 7,a7 means a course of action with respect to a mortgage offered by a servicer to a borrower as an alternative to a covered foreclosure action2 and 7,b7 includes a short sale and a deed in lieu of foreclosure4 7#b7 ,borrower ,the term borrower means a mortgagor under a mortgage who is in default or at risk of imminent default1 as determined by the ,director1 by rule4 7#c7 ,covered foreclosure action ,the term covered foreclosure action means a judicial or nonjudicial foreclosure4 7#d7 ,independent reviewer ,the term independent reviewer-- 7,a7 means an entity that has the expertise and capacity to determine whether a borrower is eligible to participate in a loan modification program2 and 7,b7 includes-- 7i7 an entity that is not a servicer2 or 7ii7 a division within a servicer that is independent of1 and not under the same immediate supervision as1 any division that makes determinations with respect to applications for loan modifications or alternatives to foreclosure4 7#e7 ,loan modification program ,the term loan modification program-- 7,a7 means a program or procedure designed to change the terms of a mortgage in the case of the default1 delinquency1 or imminent default or delinquency of a mortgagor2 and 7,b7 includes-- 7i7 a loan modification program established by the ,federal ,government1 including the ,home ,affordable ,modification ,program of the ,department of the ,treasury2 and 7ii7 a loan modification program established by a servicer4 7#f7 ,mortgage ,the term mortgage means a federally related mortgage loan1 as defined in section #c of the ,real ,estate ,settlement ,procedures ,act of #aigd 7#ab ,u4,s4,c4 #bfjb7c771 that is secured by a first or subordinate lien on residential real property that is the primary residence of the borrower4 7#g7 ,servicer ,the term servicer-- 7,a7 has the same meaning as in section #f7;i7 of the ,real ,estate ,settlement ,procedures ,act of #aigd 7#ab ,u4,s4,c4 #bfje7;i772 and 7,b7 includes a person responsible for servicing a pool of mortgages4 7b7 ,single point of contact 7#a7 ,case ,manager ,required ,a servicer shall assign #a case manager to each borrower that seeks a loan modification or an alternative to foreclosure4 7#b7 ,duties of ,case ,manager ,the case manager assigned under paragraph 7#a7 shall be an individual who-- 7,a7 manages the communications between the servicer and the borrower2 7,b7 has the authority to make decisions about the eligibility of the borrower for a loan modification or an alternative to foreclosure2 7,c7 is available to communicate with the borrower by telephone and email during business hours2 and 7,d7 remains assigned to the borrower until the earliest of-- 7i7 the date on which the borrower accepts a loan modification or an alternative to foreclosure2 7ii7 the date on which the servicer forecloses on the mortgage of the borrower2 or 7iii7 the date on which a release of the mortgage of the borrower is recorded in the appropriate land records office1 as determined by the ,director1 by rule4 7#c7 ,assistance for ,case ,managers ,a servicer may assign an employee to assist a case manager assigned under paragraph 7#a71 if the case manager remains available to communicate with the borrower by telephone and email4 7c7 ,determination of eligibility for loan modification program or alternative to foreclosure required before foreclosure 7#a7 ,initiation of ,covered ,foreclosure ,actions ,a servicer may not initiate a covered foreclosure action against a borrower unless the servicer has-- 7,a7 completed a full review of the file of the borrower to determine whether the borrower is eligible for a loan modification or an alternative to foreclosure2 7,b7 made a reasonable effort to obtain the information necessary to determine whether the borrower is eligible for a loan modification or an alternative to foreclosure1 as described in paragraph 7#c72 and 7,c7 offered the borrower a loan modification or an alternative to foreclosure1 if the borrower is eligible for the loan modification or alternative to foreclosure4 7#b7 ,suspension of ,covered ,foreclosure ,actions 7,a7 ,in general ,a servicer shall suspend a covered foreclosure action that was initiated before the date of enactment of this section until the servicer-- 7i7 completes a full review of the file of the borrower to determine whether the borrower is eligible for a loan modification or an alternative to foreclosure2 7ii7 notifies the borrower of the determination under clause 7i72 and 7iii7 offers the borrower a loan modification or an alternative to foreclosure1 if the borrower is eligible for a loan modification or an alternative to foreclosure4 7,b7 ,suspension ,during the period of the suspension under subparagraph 7,a71 a servicer may not-- 7i7 send a notice of foreclosure to a borrower2 7ii7 conduct or schedule a sale of the residential real property securing the mortgage of the borrower2 or 7iii7 cause final judgment to be entered against the borrower4 7,c7 ,reasonable efforts ,a servicer is not required to suspend a covered foreclosure action under subparagraph 7,a7 if the servicer-- 7i7 makes a reasonable effort to obtain information necessary to determine whether the borrower is eligible for a loan modification or an alternative to foreclosure1 as described in paragraph 7#c72 and 7ii7 documents that the servicer has not received information necessary to determine whether the borrower is eligible for a loan modification or an alternative to foreclosure before the end of the applicable period under paragraph 7#c74 7,d7 ,rule of construction ,nothing in this section may be construed to require a servicer to delay an unavoidable foreclosure1 such as foreclosure that results from a borrower abandoning the residential real property securing the mortgage of such borrower4 7#c7 ,reasonable effort to obtain necessary information ,a servicer shall be deemed to have made a reasonable effort to obtain information necessary to determine whether the borrower is eligible for a loan modification or an alternative to foreclosure if such servicer takes the following steps3 7,a7 #cj-;day period after delinquency 7i7 ,in general ,during the #cj-;day period beginning on the date of delinquency of the borrower1 the servicer shall attempt to establish contact with the borrower by-- 7,i7 making not fewer than #d telephone calls to the telephone number on record for the borrower1 at different times of the day2 and 7,,ii7 sending not fewer than #b written notices to the borrower at the address on record for the borrower1 at least #a of which shall be delivered by certified mail1 requesting that the borrower contact the servicer4 7ii7 ,contact not established ,in the case that a servicer is not able to establish contact with the borrower by telephone under subclause 7,i7 of clause 7i7 or such borrower does not respond to the notices sent under subclause 7,,ii7 of such clause1 such servicer shall1 following a third party review under subsection 7d71 notify the borrower that the servicer intends to initiate or continue a covered foreclosure action4 7,b7 ,contact established with borrower ,in the case that a servicer is able to establish contact with the borrower under subparagraph 7,a77i71 the servicer shall-- 7i7 notify the borrower1 in writing1 that the servicer lacks information necessary to determine whether the borrower is eligible for a loan modification or an alternative to foreclosure2 and 7ii7 send the borrower a written request that the borrower transmit to the servicer1 not later than #cj days after the date on which such request sent by the servicer is postmarked1 all information necessary to determine whether the borrower is eligible for a loan modification or an alternative to foreclosure4 7,c7 ,necessary information not received ,in the case that the servicer does not receive from the borrower all information requested under clause 7ii7 of subparagraph 7,b7 within the time period described in such subparagraph1 the servicer shall send the borrower an additional written request that the borrower transmit to the servicer1 not later than #ae days after the date on which such request sent by the servicer is postmarked1 all information necessary to determine whether the borrower is eligible for a loan modification or an alternative to foreclosure4 7,d7 ,notification of foreclosure ,in the case that the servicer does not receive from the borrower all information requested under subparagraph 7,c7 within the time period described in such subparagraph1 the servicer shall1 following a third party review under subsection 7d71 notify the borrower that the servicer intends to initiate or continue a covered foreclosure action4 7d7 ,third party review 7#a7 ,in general ,unless otherwise provided for in this subsection1 before a servicer notifies a borrower that the borrower is not eligible for a loan modification or an alternative to foreclosure1 the servicer shall obtain the services of an independent reviewer to-- 7,a7 review the file of the borrower2 and 7,b7 determine whether the borrower is eligible for a loan modification or an alternative to foreclosure4 7#b7 ,exemption ,paragraph 7#a7 shall not apply to a servicer that is a community financial institution1 as defined in section #b7aj7 of the ,federal ,home ,loan ,bank ,act 7#ab ,u4,s4,c4 #adbb7aj774 7e7 ,bar to foreclosure actions 7#a7 ,in ,general ,subject to paragraph 7#b71 a violation of this ,act shall be a bar to a covered foreclosure action4 7#b7 ,effect of ,subsequent ,compliance ,if a servicer is in compliance with this section1 the servicer may bring or proceed with a covered foreclosure action1 without regard to a prior violation of this section by the servicer4 7f7 ,liability 7#a7 ,in general ,a servicer that fails to comply with any requirement imposed under this section shall be liable to a borrower in the same manner that a creditor who fails to comply with any requirement under this chapter is liable to a person under section #acj4 7#b7 ,joint and several liability ,a creditor or assignee that is connected to a mortgage serviced by a servicer that fails to comply with any requirement imposed under this section shall1 with respect to that mortgage1 have joint and several liability with such servicer for such failure to comply4 4 7b7 ,table of contents ,the table of contents of chapter #b of such ,act is amended by inserting after the item relating to section #abi;,h the following new item3 #abi;,i4 ,standards for servicers of residential mortgages4 4 #c4 ,regulations ,not later than #ij days after the date of enactment of this ,act1 the ,director of the ,bureau of ,consumer ,financial ,protection1 in consultation with the ,secretary of ,housing and ,urban ,development and the ,secretary of the ,treasury1 shall issue regulations to carry out the amendments made by this ,act4 #d4 ,report ,not later than #a year after the date of enactment of this ,act1 the ,director of the ,bureau of ,consumer ,financial ,protection shall submit to ,congress a report that contains-- 7#a7 an evaluation of the effect of the amendments made by this ,act on-- 7,a7 ,state law2 and 7,b7 communication between servicers and borrowers2 and 7#b7 a description of any problems concerning the implementation of this ,act4