H.R. 5496 — Introduced in House

I 113th CONGRESS 2d Session H. R. 5496 IN THE HOUSE OF REPRESENTATIVES September 16, 2014 Mr. McNerney (for himself, Mr. Nugent, Mr. Rooney, Mr. Costa, Mr. Cárdenas, Mr. Johnson of Georgia, and Mr. George Miller of California) introduced the following bill; which was referred to the Committee on Financial Services A BILL To require the holder of a subordinate lien on the property that secures a federally related mortgage loan, upon a request by the homeowner for a short sale, to make a timely decision whether to allow the sale. 1. Short title This Act may be cited as the Fast Help For Homeowners Act. 2. Requirement for prompt decision (a) In general Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by inserting before section 130 (15 U.S.C. 1640) the following new section: 129I. Prompt decisionmaking regarding short sale (a) In general Not later than the end of the 10-calendar-day period beginning on the date of receipt of a written request from a mortgagor of a federally related mortgage loan that meets the requirements of subsection (c), a servicer shall— (1) notify in writing each holder of a subordinate lien on the residential real property that secures such loan of such request; and (2) submit to each such holder a copy of such request. (b) Timely response to servicer notification required (1) In general (A) Timely response required Except as provided in subsection (d) and notwithstanding any other provision of law or of any contract, including a contract between a servicer of a federally related mortgage loan and a securitization vehicle or other investment vehicle, a holder of a subordinate lien that is notified by a servicer under subsection (a) shall respond in writing to such servicer not later than the end of the 45-calendar-day period beginning on the date of receipt of such notification. (B) Failure to respond If the holder of a subordinate lien that is notified by a servicer under subsection (a) does not respond within the 45-calendar-day period described in subparagraph (A), the request from a mortgagor described in subsection (a) shall be considered to have been approved by the such holder. (2) Content A written response by such holder under subsection (a) shall specify a decision on whether the request described in such subsection has been denied, approved, or that such request has been approved subject to specified changes. (c) Mortgagor submission Subsection (a) shall apply in any case in which the mortgagor of a federally related mortgage loan submits to the servicer thereof— (1) a written offer for a short sale of the dwelling or residential real property that is subject to a mortgage, deed of trust, or other security interest that secures the mortgage loan; and (2) all information required by the servicer in connection with such a request (including a copy of an executed contract between the owner of the dwelling or property and the prospective buyer that is subject to approval by the servicer). (d) Inapplicability to certain existing mortgages This section shall not apply to any federally related mortgage loan with respect to which the mortgagor and the mortgagee or servicer have entered into a written agreement before the date of the enactment of the Fast Help For Homeowners Act explicitly providing a procedure or terms for approval of a short sale. (e) Treatment of other time limits This section may not be construed to preempt, annul, or otherwise affect any other provision of law or of any contract or program that provides a shorter period than is provided under subsection (b) for a decision to be made by a holder of a subordinate lien described in subsection (a)(1) regarding a short sale. (f) Definitions For purposes of this section, the following definitions shall apply: (1) Federally related mortgage loan The term federally related mortgage loan has the same meaning as is given in section 3 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602). (2) Securitization vehicle The term securitization vehicle means a trust, special purpose entity, or other legal structure that is used to facilitate the issuing of securities, participation certificates, or similar instruments backed by or referring to a pool of assets that includes federally related mortgage loans (or instruments that are related to federally related mortgage loans, such as credit-linked notes). (3) Servicer The term servicer has the same meaning as in section 129A, except that such term includes a person who makes or holds a federally related mortgage loan (including a pool of federally related mortgage loans), if such person also services the loan. (4) Short sale The term short sale means the sale of the dwelling or residential real property that is subject to the mortgage, deed or trust, or other security interest that secures a federally related mortgage loan that— (A) will result in proceeds in an amount that is less than the remaining amount due under the mortgage loan; and (B) requires authorization by the securitization vehicle or other investment vehicle or holder of the mortgage loan, or the servicer acting on behalf of such a vehicle or holder. . (b) Applicability The amendment made by subsection (a) shall apply to any written request for a short sale made after the date of the enactment of this Act.