,i #aacth ,,congress #b;d ,session ,h4 ,r4 #difc ,,in ,,the ,,house ,,of ,,representatives ,june #be1 #bjad ,ms4 ,michelle ,lujan ,grisham of ,new ,mexico 7for herself and ,ms4 ,kaptur7 introduced the following bill2 which was referred to the ,committee on ,financial ,services ,a ,,bill ,to amend the ,real ,estate ,settlement ,procedures ,act of #aigd to provide protections to borrowers1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,national ,homeowners ,bill of ,rights ,act of #bjad4 #b4 ,servicer treatment of borrowers ,the ,real ,estate ,settlement ,procedures ,act of #aigd 7#ab ,u4,s4,c4 #bfja et seq47 is amended by inserting after section #f the following3 #f;,a4 ,servicer treatment of borrowers 7a7 ,servicer requirements 7#a7 ,single electronic record and single point of contact ,each servicer of a federally related mortgage loan1 or agents of such servicer1 shall1 with respect to the borrower1 establish a single electronic record for each account1 the contents of which shall be accessible throughout the servicer1 or agents of such servicer1 including to all affordable loan modification staff1 all foreclosure staff1 and all bankruptcy staff4 7#b7 ,availability of net present value information ,servicers shall maintain a free and publicly accessible website where borrowers may check their estimated net present value4 7b7 ,protections for homeowners with limited ,english proficiency 7#a7 ,free oral interpretation ,servicers shall provide free oral interpretation services for borrowers who request such services and such services may be provided by contracting with housing counseling agencies that are approved by the ,department of ,housing and ,urban ,development and that have appropriate language capacity4 7#b7 ,notation in file ,servicers shall-- 7,a7 note a request for translation services in the borrower's file and make such note available to all relevant servicer personnel2 and 7,b7 note in the borrower's file any time the borrower has communicated or sought to communicate with the servicer in a language other than ,english1 and shall include such other language4 7#c7 ,translated documents 7,a7 ,providing documents 7i7 ,in general ,servicers shall1 if a borrower asks for translated documents1 provide key documents to the borrower translated into the language of the borrower1 including periodic statements1 affordable loan modification applications1 denial notices1 and loan modification offers1 including any trial period plan4 7ii7 ,exception ,clause 7i7 shall only require providing documents in-- 7,i7 commonly spoken languages in the ,united ,states1 as determined by the ,bureau2 7,,ii7 with respect to a particular servicer1 languages spoken by a significant number of individuals living in any markets in which the servicer does business1 as determined by the ,bureau4 7,b7 ,accepting documents ,servicers shall only be required to accept documents in languages in which the servicer already provides documents1 that are considered to be part of routine business transactions in the market in which the mortgage loan was made1 or that are used in documents provided to the public by any department or agency of the ,federal ,government4 7#d7 ,exception ,subparagraph 7,a7 of paragraph 7#c7 shall not apply to small servicers1 as defined under section #ajbf4da7;e77#d77;ii7 of title #ab1 ,code of ,federal ,regulations4 7c7 ,requirements during affordable loan modification process 7#a7 ,borrowers facing imminent default ,servicers shall evaluate a borrower facing imminent default 7as such term is defined by the ,bureau71 as well as those in default1 for affordable loan modification assistance1 as described in this section4 7#b7 ,assistance to borrowers 7,a7 ,assistance in applying for affordable loan modification ,servicers shall-- 7i7 have available and sufficient staff to answer questions borrowers may have about filling out documents2 and 7ii7 provide borrowers a list of non-profit legal services organizations and housing agencies approved by the ,department of ,housing and ,urban ,development1 that can assist the borrowers with documents4 7,b7 ,treatment of successors in interest ,servicers shall-- 7i7 provide full information and complete loss mitigation options to successor homeowners protected from an acceleration of a mortgage loan under the ,garn-,st ,germain ,depository ,institutions ,act of #aihb1 if requested by the successor homeowner2 and 7ii7 review a mortgage loan for loss mitigation1 as though the successor homeowner was the borrower1 and provide a decision on available loss mitigation prior to an assumption of the mortgage loan1 if requested by the succeeding homeowner4 7#c7 ,after reviewing application ,if a servicer denies an application for an affordable loan modification1 the servicer shall notify the borrower of other loss mitigation options that may be available to the borrower and shall consider the borrower for such other loss mitigation options4 7#d7 ,rule of construction ,nothing in this section shall be construed as prohibiting a servicer from considering a borrower for other loss mitigation options1 so long as the servicer first offers the borrower an affordable loan modification if the borrower is eligible for such a modification4 7#e7 ,requirements related to transfer of loans 7,a7 ,in general ,for any transfer of servicing to a successor servicer of a federally related mortgage loan or subservicer1 the transferring servicer shall-- 7i7 inform the successor servicer 7including a subservicer7 whether a loan modification request is pending2 7ii7 provide the successor servicer with all documentation related to the mortgage loan1 including any documentation relating to a loan modification or loss mitigation process2 7iii7 ensure that the successor servicer has the operational capacity to manage the transferred loan2 7iv7 ensure that the successor servicer shall accept and continue processing prior loan modification requests1 by including such requirement in the agreement made between the servicers when transferring the loan2 7v7 ensure that successor servicer shall honor trial and permanent loan modification agreements entered into by the transferring servicer by including such requirement in the agreement made between the servicers when transferring the loan2 and 7vi7 notify the borrower of the transferred loan that the new servicer is required to accept and continue processing prior loan modification requests1 if any1 and is required to honor trial and permanent loan modification agreements entered into by the transferring servicer1 if any4 7,b7 ,honoring of existing loan modifications and applications in process ,the successor servicer shall agree to honor and accept any existing loan modification and continue any loan modification applications4 7,c7 ,prohibition on foreclosure ,during the #fj-;day period beginning on the effective date of transfer of the servicing of any federally related mortgage loan1 the mortgage loan subject to such transfer may not be subject to initiation of a judicial or non-judicial foreclosure or be subject to a foreclosure sale4 7d7 ,subsequent applications for affordable loan modification ,if a borrower has submitted an application or request in the past1 the servicer shall allow such borrower to make a subsequent affordable loan modification application if the borrower experiences a material change in circumstances1 as defined by the ,bureau4 7e7 ,limitation on foreclosure proceedings 7#a7 ,stop of sales pending application ,if a borrower submits an initial application for affordable loan modification assistance more than #g business days before a scheduled foreclosure sale1 the servicer must stop and cancel the foreclosure sale4 7#b7 ,initiation of foreclosure ,a servicer may not initiate or continue a nonjudicial foreclosure or a judicial foreclosure that is otherwise authorized under ,state law against a mortgagor that has submitted an initial application for an affordable loan modification or other loss mitigation1 unless the servicer-- 7,a7 has determined whether the mortgagor is eligible for an affordable loan modification2 and 7,b7 has made such a modification1 if the mortgagor is eligible for a modification4 7#c7 ,foreclosure proceedings permitted ,notwithstanding paragraph 7#b71 a servicer may initiate or continue a judicial or nonjudicial foreclosure under ,state law against a borrower1 if-- 7,a7 the servicer-- 7i7 determines that the borrower is not eligible for a modification2 7ii7 notifies the borrower of the determination under clause 7i72 and 7iii7 provides the borrower-- 7,i7 a copy of any net present value calculation made by the servicer in relation to an affordable loan modification1 including any information providing a basis for such net present value calculation2 7,,ii7 a copy of any note1 deed of trust1 or other document necessary to establish the right of the servicer to foreclose on the mortgage1 including proof of assignment of the mortgage to the servicer and the right of the servicer to enforce the relevant note under the law of the ,state in which the real property securing the mortgage is located2 7,,iii7 a copy of any language in the pooling or servicing agreement with respect to the mortgage that the servicer relies upon in asserting that it is prohibited or limited in providing a modification of the mortgage note2 7,,iv7 a copy of all correspondence between the servicer and the borrowers and investors in which the servicer attempts to obtain permission to make a modification2 and 7,v7 the alternatives to foreclosure available to the borrower1 including deed in lieu of foreclosures and short sales2 or 7,b7 a borrower-- 7i7 declines to be considered for a loan modification in writing or declines an affordable modification in writing2 or 7ii7 does not respond to the servicer's outreach activities 7as defined by the ,bureau7 to obtain underlying information to complete an application or fails to make a trial or permanent loan modification payment4 ,for purposes of subparagraph 7,a71 a pooling and servicing agreement is any contract establishing the transaction rights and duties of the parties to any mortgage-backed securitization transaction4 7#d7 ,bar to foreclosure ,failure to comply with the requirements of this subsection shall be a bar to the foreclosure of a mortgage1 deed of trust1 or substantially similar instrument4 7#e7 ,fees 7,a7 ,waiver of late fees ,if a borrower's application for affordable loan modification assistance is accepted1 the servicer shall waive any foreclosure fees and any late fees related to the delinquency in payment4 7,b7 ,no fee accrual while application is pending ,a borrower shall not accrue additional late or foreclosure fees during the period beginning on the date that the borrower submits an affordable loan modification application and the date on which the servicer makes a determination on such application4 7#f7 ,notification ,with respect to a foreclosure sale that is postponed by reason of this subsection1 the servicer shall notify the borrower in writing of such postponement and1 if a date for such foreclosure sale is rescheduled1 shall notify the borrower in writing of the new foreclosure sale date4 7#g7 ,certification of determination of eligibility required for sale 7,a7 ,sale of property prohibited ,if the servicer of a mortgage does not file a certification with the appropriate land records office in the jurisdiction where the property securing the mortgage is located1 stating that the servicer has determined the eligibility of the mortgagor for an affordable loan modification in compliance with this section-- 7i7 the mortgagee may not sell the property securing the mortgage2 and 7ii7 no person that purchases the property securing the mortgage may initiate an action to recover possession of the property4 7,b7 ,violations ,a sale of property in violation of this paragraph shall be void4 7#h7 ,initial application defined ,for purposes of this subsection1 the term initial application means a completed ,uniform ,borrower ,assistance ,form #gaj of the ,federal ,national ,mortgage ,association or the ,federal ,home ,loan ,mortgage ,corporation1 a ,request for ,modification and ,affidavit of the ,making ,home ,affordable ,program1 or other equivalent form that sets forth the borrower's financial1 income1 and hardship information and ,form #dejf-,t of the ,internal ,revenue ,service4 7f7 ,affordable loan modifications 7#a7 ,affordable loan modification defined ,for purposes of this section1 the term affordable loan modification means an agreement to reduce the amount of scheduled regular payments1 determined by the borrower's debt-to-income ratio or residual income1 and subject to such terms and conditions as may be set by the ,bureau1 including any reduction of the principal amount of the mortgage note as described in paragraph 7#d71 that is reflected in a permanent change to the terms of the mortgage note under such terms as the ,bureau shall define4 7#b7 ,calculation of target affordable regular mortgage payment ,for purposes of this subsection1 the target affordable regular mortgage payment shall be an amount determined by the borrower's debt-to-income ratio or residual income1 and subject to such terms and conditions as may be set by the ,bureau1 subject to such terms and conditions as may be set by the ,bureau4 ,such terms shall be based on a fully amortizing principal and interest payment over the remainder of the term of the mortgage1 as modified by any reduction in principal4 7#c7 ,eligibility ,a mortgagor shall be eligible to participate in an affordable loan modification if-- 7,a7 such person is a borrower under a federally related loan secured by the principal residence of the borrower or a person eligible to assume such a loan as a successor homeowner protected from an acceleration of a mortgage loan under the ,garn-,st ,germain ,depository ,institutions ,act of #aihb1 who is unable to make payments on a federally related mortgage loan under such criteria as the ,director of the ,bureau shall define1 in consultation with the ,secretary of ,housing and ,urban ,development and the ,secretary of the ,treasury2 7,b7 such residence is occupied by the mortgagor2 and 7,c7 the loan modification has a positive net present value 7as defined under paragraph 7#d77;,b77iv77,,ii774 7#d7 ,earned principal forgiveness 7,a7 ,in general ,if1 after reducing mortgage note principal under earned principal forgiveness provided in subparagraph 7,b71 a target affordable regular mortgage payment has not been achieved1 the servicer of the mortgage shall comply with the affordable loan modification plan waterfall steps as set out by the ,bureau of interest rate reduction1 term extension1 and principal forbearance1 as necessary to achieve a target affordable regular mortgage payment4 7,b7 ,earned principal forgiveness 7i7 ,principal reduction ,the ,bureau shall determine standards by which a mortgagor who has received an affordable loan modification shall remain in good standing in order to participate in a reduction in mortgage note principal under this subsection4 7ii7 ,principal reduction required ,except as provided under clause 7iii71 a servicer shall offer a borrower an affordable loan modification having the maximum amount of principal reduction that results in a positive net present value calculation4 ,for purposes of calculating net present value1 a servicer may use their own formula1 if it has been approved by the ,bureau1 or may use a default formula determined by the ,bureau4 7iii7 ,exceptions 7,i7 ,greater principal reduction ,a servicer may offer a greater principal reduction1 if such a reduction is consistent with the terms of any contract with respect to the mortgage4 7,,ii7 ,loan-to-value ratio ,a servicer is not required to offer a principal reduction that would result in a loan-to-value ratio of less than #ajj percent4 7iv7 ,rules of construction 7,i7 ,maximum amount of principal reduction ,a principal reduction amount may be considered the maximum amount if it is within #a1jjj of the actual maximum amount4 7,,ii7 ,positive net present value calculation ,a net present value calculation shall be deemed to be positive for the mortgage investors if the net present value result for an affordable loan modification scenario is greater than the net present value result if no affordable loan modification is made4 ,net present value shall be calculated as the benefit of all investors in a securitization rather than the benefit of any particular class of investors4 7v7 ,principal forgiveness 7,i7 ,treatment of principal reduction amount ,any amount of principal reduction under clause 7ii7 shall be treated as non-interest-bearing principal forbearance until the dates described under subclause 7,,ii74 ,the principal reduction described in this clause shall be deemed to be separate from and exclusive of any other forbearance that may be offered in conjunction with a modification under an affordable loan modification program4 7,,ii7 ,reduction of principal ,the servicer of a mortgage modified under an affordable loan modification plan shall reduce the unpaid balance of the principal of the mortgage by an amount equal to #ac of the total amount of the principal reduction under clause 7ii7 on each of the following dates3 7aa7 ,the date that is #a year after the date on which the affordable loan modification begins4 7bb7 ,the date that is #b years after the date on which the affordable loan medication begins4 7cc7 ,the date that is #c years after the date on which the affordable loan modification begins4 7vi7 ,certain modifications ,with respect to a borrower that is not underwater and does not qualify for principle reduction1 the servicer shall offer such borrower an affordable loan modification to reach the target affordable regular mortgage payment amount1 if the borrower qualifies4 7#e7 ,treatment of junior liens ,with respect to a borrower1 if a primary mortgage loan is modified pursuant to this subsection1 the servicer of any junior mortgage loan shall make a modification available to the borrower on the same terms as the modification of the primary mortgage loan1 unless prohibited by contract4 7#f7 ,rule of construction ,nothing in this section shall be construed as prohibiting a servicer from providing a loan modification that does not produce a positive net present value 7as defined under paragraph 7#d77;,b77iv77,,ii774 7g7 ,bar to foreclosure ,in any judicial or non-judicial foreclosure proceeding1 it shall be a bar to foreclosure that the servicer of the federally related mortgage loan on the property to be foreclosed violated any provision of this section4 7h7 ,civil ,penalty 7#a7 ,in general ,any servicer who violates a provision of this section shall be subject to a fine in an amount1 as determined by the ,bureau1 not to exceed #e1jjj for each violation except that the maximum penalty for all violations by any particular servicer during any #a-year period shall not exceed #a1jjj1jjj4 7#b7 ,liability to borrower ,any servicer that violates a provision of this section with respect to a loan shall be liable to the borrower of such loan in the amount of #aj1jjj per violation4 7#c7 ,continuing violations ,in the case of a continuing violation1 as determined by the ,bureau1 each day shall constitute a separate violation for purposes of this subsection4 7#d7 ,adjustment of amounts ,after the end of the #a-year period beginning on the date of the enactment of this subsection1 the ,bureau shall annually adjust amounts specified under this subsection to reflect inflation4 #f;,b4 ,mortgage ,servicer ,ombudsman 7a7 ,in general ,the ,director of the ,bureau shall appoint a ,mortgage ,servicer ,ombudsman 7the ,ombudsman7 within the ,bureau4 7b7 ,duties ,the ,ombudsman shall provide assistance to servicers and borrowers in complying with ,federal law with respect to the servicing of mortgage loans and offer resolution to borrowers who are facing noncompliance4 7c7 ,focus on low-,income borrowers ,in carrying out this section1 the ,ombudsman shall focus on providing assistance to low-income borrowers4 7d7 ,consultation ,the ,ombudsman shall consult with-- 7#a7 attorneys general of ,states in carrying out this section2 and 7#b7 other offices of the ,bureau that engage in dispute resolution4 7e7 ,non-,duplication ,the ,ombudsman may not carry out any activities that would be duplicative with activities of other ,bureau offices4 #f;,c4 ,penalties for robo-signing ,any servicer who records or files with a land records office or a court more than one document with material deficiencies with respect to a mortgage loan shall be subject to a fine of not more than #g1ejj for each such loan4 4 #c4 ,extension of the ,protecting ,tenants at ,foreclosure ,act of #bjji ,section #gjd of the ,protecting ,tenants at ,foreclosure ,act of #bjji 7#ab ,u4,s4,c4 #ebja note2 #ab ,u4,s4,c4 #ebbj note2 #db ,u4,s4,c4 #adcg;f note7 is hereby repealed4 #d4 ,rule of ,construction ,nothing in this ,act1 or the amendments made by this ,act1 shall be construed as preempting any ,state or local law with respect to foreclosures that provides greater protections for consumers4 #e4 ,rulemaking ,the ,bureau of ,consumer ,financial ,protection shall1 not later than the end of the #ab-month period beginning on the date of the enactment of this ,act1 issue regulations to carry out this ,act and the amendments made by this ,act1 and the ,bureau shall provide that such regulations take effect not later than the end of the #f-month period beginning on the date the regulations are issued4