,,ii #aadth ,,congress #b;d ,session ,s4 #cdbf ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,september #bh1 #bjaf ,mr4 ,booker 7for himself and ,mr4 ,menendez7 introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,a ,,bill ,to provide nonprofit organizations and local governments with the opportunity to match a bid with respect to the sale of certain non-performing loans by the ,government-sponsored enterprises and the ,federal ,housing ,administration1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,homeowner ,foreclosure ,reduction ,act of #bjaf4 #b4 ,loans owned by ,fannie ,mae ,section #cjb of the ,federal ,national ,mortgage ,association ,charter ,act 7#ab ,u4,s4,c4 #agag7 is amended by adding at the end the following3 7d7 ,sale of non-,performing loans 7#a7 ,in this subsection-- 7,a7 the term covered pool means a pool of non-performing loans owned under this title-- 7i7 that contains not more than #cjj loans2 7ii7 that is1 to the extent practicable1 geographically concentrated2 and 7iii7 for which the corporation1 with respect to the sale of loans in the pool1 encourages purchase of the loans by qualifying nonprofits and qualifying local governments2 7,b7 the term non-covered pool means a pool of non-performing loans owned under this title that is not a covered pool2 7,c7 the term qualifying local government means a local government that the corporation has permitted to bid1 after an initial auction1 on a covered pool or a non-covered pool2 and 7,d7 the term qualifying nonprofit means a nonprofit organization that the corporation has permitted to bid1 after an initial auction1 on a covered pool or a non-covered pool4 7#b7 7,a7 ,the corporation1 with respect to an auction for the sale of non-performing loans1 shall ensure that not fewer than #be percent of the loans that are offered for sale in the auction are loans in covered pools4 7,b7 ,the corporation shall ensure that1 after an entity that is not a qualifying nonprofit or a qualifying local government submits the highest bid on a non-covered pool1 qualifying nonprofits and qualifying local governments have the opportunity to submit a bid to purchase not more than #e percent of the loans in the non-covered pool in accordance with the procedures set forth in paragraph 7#c77;,b74 7#c7 7,a7 ,with respect to the sale of a covered pool when a qualifying nonprofit or a qualifying local government is a party bidding on the covered pool1 the corporation shall-- 7i7 notify each bidder that a qualifying nonprofit or a qualifying local government is a bidder on the covered pool2 7ii7 if1 after receiving bids from each of the bidders on the covered pool1 the corporation determines that an entity that is not a qualifying nonprofit or a qualifying local government submitted the highest overall bid-- 7,i7 disclose to the qualifying nonprofit or qualifying local government that submitted the highest bid 7among bids submitted by qualifying nonprofits and qualifying local governments7 the amount of the highest overall bid that was submitted2 7,,ii7 provide the qualifying nonprofit or qualifying local government that submitted the highest bid with an opportunity to1 not later than #b days after receiving notice from the corporation1 submit a bid in an amount greater than the highest overall bid2 and 7,,iii7 if a qualifying nonprofit or qualifying local government1 as applicable1 described in subclause 7,,ii7 chooses not to submit a bid as described in that subclause1 provide each successive qualifying nonprofit or qualifying local government that submitted the next highest bid with an opportunity to1 not later than #b days after receiving notice from the corporation and a disclosure described in subclause 7,i71 submit a bid in an amount greater than the highest overall bid2 and 7iii7 sell the covered pool to a qualifying nonprofit or a qualifying local government if a qualifying nonprofit or qualifying local government1 as applicable1 under subclause 7,,ii7 or 7,,iii7 of clause 7ii71 submits a bid in an amount greater than the highest overall bid4 7,b7 ,with respect to the sale of a non-covered pool-- 7i7 not later than #b days after the date on which an entity that is not a qualifying nonprofit or a qualifying local government submits the highest overall bid on the non-covered pool-- 7,i7 the corporation shall disclose to qualifying nonprofits and qualifying local governments the amount of the highest overall bid submitted on the non-covered pool1 including the amount of the bid for each individual loan in the non-covered pool2 and 7,,ii7 a qualifying nonprofit or a qualifying local government may submit to the corporation a bid to purchase not more than #e percent of the loans in the non-covered pool2 7ii7 except as provided in subparagraph 7,c71 the corporation shall sell a loan described in clause 7i77,,ii7 to a qualifying nonprofit or qualifying local government1 as applicable1 if1 with respect to that loan1 the bid of the qualifying nonprofit or qualifying local government is equal to or more than the bid of the entity that submitted the highest overall bid for the non-covered pool2 and 7iii7 the total number of loans sold under clause 7ii7 may not exceed #aj percent of the number of loans in the non-covered pool4 7,c7 7i7 ,the corporation shall determine which loans in a non-covered pool shall be sold to a qualifying nonprofit or a qualifying local government if the aggregate number of loans sold under subparagraph 7,b77ii7 to qualifying nonprofits and qualifying local governments would violate subparagraph 7,b77iii74 7ii7 ,if1 under subparagraph 7,b77i77,,ii71 more than #a qualifying nonprofit or qualifying local government submits a bid for a loan that is equal to or higher than the bid submitted by the entity that had submitted the highest overall bid1 the corporation shall sell the loan to the qualifying nonprofit or qualifying local government that submitted the highest bid4 7#d7 ,before submitting a bid with respect to a covered pool or a non-covered pool1 a nonprofit organization or local government1 in order to be considered a qualifying nonprofit or qualifying local government1 as applicable1 shall submit to the corporation an application containing such information as the corporation determines appropriate4 7#e7 ,any entity that purchases a covered pool under this subsection-- 7,a7 may not foreclose on any of the occupied properties that secure loans in the pool during the #ab-month period following the purchase2 and 7,b7 shall ensure that1 not later than #d years after the settlement date1 not less than #ej percent of the loans in the pool result in-- 7i7 a modified loan that-- 7,i7 has a loan-to-value ratio after the modification of the loan that is not greater than #aae percent2 7,,ii7 performs over a period of not less than #f months2 7,,iii7 does not include an up-front fee or require prepayment of any amount of the mortgage debt2 and 7,,iv7 7aa7 is fixed rate for the entire period in which the loan being modified is in effect2 or 7bb7 offers an initial period in which the interest rate is reduced and an increase in the interest rate is limited to not more than #a percent per year after an initial #e-year period in which the interest rate is fixed1 with a maximum interest rate not exceeding the prevailing market rate for loans2 7ii7 a short sale of the property that secures the loan to an owner-occupant2 7iii7 with respect to a qualifying nonprofit or a qualifying local government that purchases a covered pool under paragraph 7#c77;,a77iii71 holding the property that secures the loan for rental for a period of not less than #c years1 where such rental is affordable to a household with an annual income at or below the area median income2 7iv7 with the approval of the corporation1 gifting the property that secures the loan to a land bank1 a nonprofit organization1 or a ,state or local government1 with additional funds provided for demolition and maintenance2 or 7v7 with the approval of the corporation1 sale of the loan or the property that secures the loan to a nonprofit organization4 7#f7 ,a qualifying nonprofit or a qualifying local government that purchases a covered pool under paragraph 7#c77;,a77iii7 shall ensure that not less than #fj percent of the loans in the pool result in not less than one of the outcomes described in clauses 7i7 through 7v7 of paragraph 7#e77;,b74 7#g7 7,a7 ,any entity that purchases a covered pool under this subsection that contains a loan for which the property securing the loan is vacant shall ensure that the servicer of the loan-- 7i7 does not release the lien on the property2 and 7ii7 maintains the property in accordance with generally acceptable maintenance standards4 7,b7 ,if the servicer of a loan described in subparagraph 7,a7 does not comply with the requirements of that subparagraph1 the entity that purchased the covered pool shall sell or donate the loan to another entity1 including a government or nonprofit entity4 7#h7 ,nothing in this subsection shall be construed to prevent the corporation from ensuring that a qualifying nonprofit or a qualifying local government has the opportunity to be the last bidder on a covered pool or a non-covered pool under procedures other than those described in this section4 7#i7 ,in addition to the requirements under this subsection-- 7,a7 any entity that purchases a non-covered pool shall meet all of the requirements of the corporation in effect on the day before the date of enactment of this subsection2 and 7,b7 the corporation may impose any other requirements with respect to the purchase of a covered pool or a non-covered pool that the corporation determines are appropriate4 4 #c4 ,loans owned by ,freddie ,mac ,section #cje of the ,federal ,home ,loan ,mortgage ,corporation ,act 7#ab ,u4,s4,c4 #aded7 is amended by adding at the end the following3 7d7 ,sale of non-,performing loans 7#a7 ,in this subsection-- 7,a7 the term covered pool means a pool of non-performing loans owned under this title-- 7i7 that contains not more than #cjj loans2 7ii7 that is1 to the extent practicable1 geographically concentrated2 and 7iii7 for which the corporation1 with respect to the sale of loans in the pool1 encourages purchase of the loans by qualifying nonprofits and qualifying local governments2 7,b7 the term non-covered pool means a pool of non-performing loans owned under this title that is not a covered pool2 7,c7 the term qualifying local government means a local government that the corporation has permitted to bid1 after an initial auction1 on a covered pool or a non-covered pool2 and 7,d7 the term qualifying nonprofit means a nonprofit organization that the corporation has permitted to bid1 after an initial auction1 on a covered pool or a non-covered pool4 7#b7 7,a7 ,the corporation1 with respect to an auction for the sale of non-performing loans1 shall ensure that not fewer than #be percent of the loans that are offered for sale in the auction are loans in covered pools4 7,b7 ,the corporation shall ensure that1 after an entity that is not a qualifying nonprofit or a qualifying local government submits the highest bid on a non-covered pool1 qualifying nonprofits and qualifying local governments have the opportunity to submit a bid to purchase not more than #e percent of the loans in the non-covered pool in accordance with the procedures set forth in paragraph 7#c77;,b74 7#c7 7,a7 ,with respect to the sale of a covered pool when a qualifying nonprofit or a qualifying local government is a party bidding on the covered pool1 the corporation shall-- 7i7 notify each bidder that a qualifying nonprofit or a qualifying local government is a bidder on the covered pool2 7ii7 if1 after receiving bids from each of the bidders on the covered pool1 the corporation determines that an entity that is not a qualifying nonprofit or a qualifying local government submitted the highest overall bid-- 7,i7 disclose to the qualifying nonprofit or qualifying local government that submitted the highest bid 7among bids submitted by qualifying nonprofits and qualifying local governments7 the amount of the highest overall bid that was submitted2 7,,ii7 provide the qualifying nonprofit or qualifying local government that submitted the highest bid with an opportunity to1 not later than #b days after receiving notice from the corporation1 submit a bid in an amount greater than the highest overall bid2 and 7,,iii7 if a qualifying nonprofit or qualifying local government1 as applicable1 described in subclause 7,,ii7 chooses not to submit a bid as described in that subclause1 provide each successive qualifying nonprofit or qualifying local government that submitted the next highest bid with an opportunity to1 not later than #b days after receiving notice from the corporation and a disclosure described in subclause 7,i71 submit a bid in an amount greater than the highest overall bid2 and 7iii7 sell the covered pool to a qualifying nonprofit or a qualifying local government if a qualifying nonprofit or qualifying local government1 as applicable1 under subclause 7,,ii7 or 7,,iii7 of clause 7ii71 submits a bid in an amount greater than the highest overall bid4 7,b7 ,with respect to the sale of a non-covered pool-- 7i7 not later than #b days after the date on which an entity that is not a qualifying nonprofit or a qualifying local government submits the highest overall bid on the non-covered pool-- 7,i7 the corporation shall disclose to qualifying nonprofits and qualifying local governments the amount of the highest overall bid submitted on the non-covered pool1 including the amount of the bid for each individual loan in the non-covered pool2 and 7,,ii7 a qualifying nonprofit or a qualifying local government may submit to the corporation a bid to purchase not more than #e percent of the loans in the non-covered pool2 7ii7 except as provided in subparagraph 7,c71 the corporation shall sell a loan described in clause 7i77,,ii7 to a qualifying nonprofit or qualifying local government1 as applicable1 if1 with respect to that loan1 the bid of the qualifying nonprofit or qualifying local government is equal to or more than the bid of the entity that submitted the highest overall bid for the non-covered pool2 and 7iii7 the total number of loans sold under clause 7ii7 may not exceed #aj percent of the number of loans in the non-covered pool4 7,c7 7i7 ,the corporation shall determine which loans in a non-covered pool shall be sold to a qualifying nonprofit or a qualifying local government if the aggregate number of loans sold under subparagraph 7,b77ii7 to qualifying nonprofits and qualifying local governments would violate subparagraph 7,b77iii74 7ii7 ,if1 under subparagraph 7,b77i77,,ii71 more than #a qualifying nonprofit or qualifying local government submits a bid for a loan that is equal to or higher than the bid submitted by the entity that had submitted the highest overall bid1 the corporation shall sell the loan to the qualifying nonprofit or qualifying local government that submitted the highest bid4 7#d7 ,before submitting a bid with respect to a covered pool or a non-covered pool1 a nonprofit organization or local government1 in order to be considered a qualifying nonprofit or qualifying local government1 as applicable1 shall submit to the corporation an application containing such information as the corporation determines appropriate4 7#e7 ,any entity that purchases a covered pool under this subsection-- 7,a7 may not foreclose on any of the occupied properties that secure loans in the pool during the #ab-month period following the purchase2 and 7,b7 shall ensure that1 not later than #d years after the settlement date1 not less than #ej percent of the loans in the pool result in-- 7i7 a modified loan that-- 7,i7 has a loan-to-value ratio after the modification of the loan that is not greater than #aae percent2 7,,ii7 performs over a period of not less than #f months2 7,,iii7 does not include an up-front fee or require prepayment of any amount of the mortgage debt2 and 7,,iv7 7aa7 is fixed rate for the entire period in which the loan being modified is in effect2 or 7bb7 offers an initial period in which the interest rate is reduced and an increase in the interest rate is limited to not more than #a percent per year after an initial #e-year period in which the interest rate is fixed1 with a maximum interest rate not exceeding the prevailing market rate for loans2 7ii7 a short sale of the property that secures the loan to an owner-occupant2 7iii7 with respect to a qualifying nonprofit or a qualifying local government that purchases a covered pool under paragraph 7#c77;,a77iii71 holding the property that secures the loan for rental for a period of not less than #c years1 where such rental is affordable to a household with an annual income at or below the area median income2 7iv7 with the approval of the corporation1 gifting the property that secures the loan to a land bank1 a nonprofit organization1 or a ,state or local government1 with additional funds provided for demolition and maintenance2 or 7v7 with the approval of the corporation1 sale of the loan or the property that secures the loan to a nonprofit organization4 7#f7 ,a qualifying nonprofit or a qualifying local government that purchases a covered pool under paragraph 7#c77;,a77iii7 shall ensure that not less than #fj percent of the loans in the pool result in not less than one of the outcomes described in clauses 7i7 through 7v7 of paragraph 7#e77;,b74 7#g7 7,a7 ,any entity that purchases a covered pool under this subsection that contains a loan for which the property securing the loan is vacant shall ensure that the servicer of the loan-- 7i7 does not release the lien on the property2 and 7ii7 maintains the property in accordance with generally acceptable maintenance standards4 7,b7 ,if the servicer of a loan described in subparagraph 7,a7 does not comply with the requirements of that subparagraph1 the entity that purchased the covered pool shall sell or donate the loan to another entity1 including a government or nonprofit entity4 7#h7 ,nothing in this subsection shall be construed to prevent the corporation from ensuring that a qualifying nonprofit or a qualifying local government has the opportunity to be the last bidder on a covered pool or a non-covered pool under procedures other than those described in this section4 7#i7 ,in addition to the requirements under this subsection-- 7,a7 any entity that purchases a non-covered pool shall meet all of the requirements of the corporation in effect on the day before the date of enactment of this subsection2 and 7,b7 the corporation may impose any other requirements with respect to the purchase of a covered pool or a non-covered pool that the corporation determines are appropriate4 4 #d4 ,loans insured by the ,,fha ,title ,,ii of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjg et seq47 is amended by adding at the end the following3 #bei4 ,sale of non-performing mortgages 7a7 ,definitions ,in this section-- 7#a7 the term covered pool means a pool of non-performing mortgages insured under this title-- 7,a7 that contains not more than #cjj mortgages2 7,b7 that is1 to the extent practicable1 geographically concentrated2 and 7,c7 for which the ,secretary1 with respect to the sale of mortgages in the pool1 encourages purchase of the mortgages by qualifying nonprofits and qualifying local governments2 7#b7 the term non-covered pool means a pool of non-performing mortgages insured under this title that is not a covered pool2 7#c7 the term qualifying local government means a local government that the ,secretary has permitted to bid1 after an initial auction1 on a covered pool or a non-covered pool2 and 7#d7 the term qualifying nonprofit means a nonprofit organization that the ,secretary has permitted to bid1 after an initial auction1 on a covered pool or a non-covered pool4 7b7 ,requirements 7#a7 ,covered pools ,the ,secretary1 with respect to an auction for the sale of non-performing mortgages1 shall ensure that not fewer than #ej percent of the mortgages that are offered for sale in the auction are mortgages in covered pools4 7#b7 ,non-covered pools ,the ,secretary shall ensure that1 after an entity that is not a qualifying nonprofit or a qualifying local government submits the highest bid on a non-covered pool1 qualifying nonprofits and qualifying local governments have the opportunity to submit a bid to purchase not more than #e percent of the mortgages in the non-covered pool in accordance with the procedures set forth in subsection 7c77#b74 7c7 ,procedures for sale of covered and non-,covered pools 7#a7 ,covered pools ,with respect to the sale of a covered pool when a qualifying nonprofit or a qualifying local government is a party bidding on the covered pool1 the ,secretary shall-- 7,a7 notify each bidder that a qualified nonprofit or a qualifying local government is a bidder on the covered pool2 7,b7 if1 after receiving bids from each of the bidders on the covered pool1 the ,secretary determines that an entity that is not a qualifying nonprofit or a qualifying local government submitted the highest overall bid-- 7i7 disclose to the qualifying nonprofit or qualifying local government that submitted the highest bid 7among bids submitted by qualifying nonprofits and qualifying local governments7 the amount of the highest overall bid that was submitted2 7ii7 provide the qualifying nonprofit or qualifying local government that submitted the highest bid with an opportunity to1 not later than #b days after receiving notice from the ,secretary1 submit a bid in an amount greater than the highest overall bid2 and 7iii7 if a qualifying nonprofit or qualifying local government1 as applicable1 described in clause 7ii7 chooses not to submit a bid as described in that clause1 provide each successive qualifying nonprofit or qualifying local government that submitted the next highest bid with an opportunity to1 not later than #b days after receiving notice from the ,secretary and a disclosure described in clause 7i71 submit a bid in an amount greater than the highest overall bid2 and 7,c7 sell the covered pool to a qualifying nonprofit or a qualifying local government if a qualifying nonprofit or qualifying local government1 as applicable1 under clause 7ii7 or 7iii7 of subparagraph 7,b71 submits a bid in an amount greater than the highest overall bid4 7#b7 ,non-covered pools 7,a7 ,in general ,with respect to the sale of a non-covered pool-- 7i7 not later than #b days after the date on which an entity that is not a qualifying nonprofit or a qualifying local government submits the highest overall bid on the non-covered pool-- 7,i7 the ,secretary shall disclose to qualifying nonprofits and qualifying local governments the amount of the highest overall bid submitted on the non-covered pool1 including the amount of the bid for each individual mortgage in the non-covered pool2 and 7,,ii7 a qualifying nonprofit or a qualifying local government may submit to the ,secretary a bid to purchase not more than #e percent of the mortgages in the non-covered pool2 7ii7 except as provided in subparagraphs 7,b7 and 7,c71 the ,secretary shall sell a mortgage described in clause 7i77,,ii7 to a qualifying nonprofit or qualifying local government1 as applicable1 if1 with respect to that mortgage1 the bid of the qualifying nonprofit or qualifying local government is equal to or more than the bid of the entity that submitted the highest overall bid for the non-covered pool2 and 7iii7 the total number of mortgages sold under clause 7ii7 may not exceed #aj percent of the number of mortgages in the non-covered pool4 7,b7 ,selection by the ,secretary ,the ,secretary shall determine which mortgages in a non-covered pool shall be sold to a qualifying nonprofit or a qualifying local government if the aggregate number of mortgages sold under subparagraph 7,a77ii7 to qualifying nonprofits and qualifying local governments would violate subparagraph 7,a77iii74 7,c7 ,multiple high bids ,if1 under subparagraph 7,a77i77,,ii71 more than #a qualifying nonprofit or qualifying local government submits a bid for a mortgage that is equal to or higher than the bid submitted by the entity that had submitted the highest overall bid1 the ,secretary shall sell the mortgage to the qualifying nonprofit or qualifying local government that submitted the highest bid4 7d7 ,application ,before submitting a bid with respect to a covered pool or a non-covered pool1 a nonprofit organization or local government1 in order to be considered a qualifying nonprofit or qualifying local government1 as applicable1 shall submit to the ,secretary an application containing such information as the ,secretary determines appropriate4 7e7 ,additional requirements for covered pools 7#a7 ,in general ,any entity that purchases a covered pool under this section-- 7,a7 may not foreclose on any of the occupied properties that secure mortgages in the pool during the #ab-month period following the purchase2 and 7,b7 shall ensure that1 not later than #d years after the settlement date1 not less than #ej percent of the mortgages in the pool result in-- 7i7 a modified mortgage that-- 7,i7 has a loan-to-value ratio after the modification of the mortgage that is not greater than #aae percent2 7,,ii7 performs over a period of not less than #f months2 7,,iii7 does not include an up-front fee or require prepayment of any amount of the mortgage debt2 and 7,,iv7 7aa7 is fixed rate for the entire period in which the mortgage being modified is in effect2 or 7bb7 offers an initial period in which the interest rate is reduced and an increase in the interest rate is limited to not more than #a percent per year after an initial #e-year period in which the interest rate is fixed1 with a maximum interest rate not exceeding the prevailing market rate for mortgages2 7ii7 a short sale of the property that secures the mortgage to an owner-occupant2 7iii7 with respect to a qualifying nonprofit or a qualifying local government that purchases a covered pool under subsection 7c77#a77;,c71 holding the property that secures the mortgage for rental for a period of not less than #c years1 where such rental is affordable to a household with an annual income at or below the area median income2 7iv7 with the approval of the ,secretary1 gifting the property that secures the mortgage to a land bank1 a nonprofit organization1 or a ,state or local government1 with additional funds provided for demolition and maintenance2 and 7v7 with the approval of the ,secretary1 sale of the mortgage or the property that secures the mortgage to a nonprofit organization4 7#b7 ,qualifying nonprofits and local governments ,a qualifying nonprofit or a qualifying local government that purchases a covered pool under subsection 7c77#a77;,c7 shall ensure that not less than #fj percent of the mortgages in the pool result in not less than one of the outcomes described in clauses 7i7 through 7v7 of paragraph 7#a77;,b74 7#c7 ,vacant properties 7,a7 ,in general ,any entity that purchases a covered pool under this section that contains a mortgage for which the property securing the mortgage is vacant shall ensure that the servicer of the mortgage-- 7i7 does not release the lien on the property2 and 7ii7 maintains the property in accordance with generally acceptable maintenance standards4 7,b7 ,sale of mortgage ,if the servicer of a mortgage described in subparagraph 7,a7 does not comply with the requirements of that subparagraph1 the entity that purchased the covered pool shall sell or donate the mortgage to another entity1 including a government or nonprofit entity4 7f7 ,rule of construction ,nothing in this section shall be construed to prevent the ,secretary from ensuring that a qualifying nonprofit or a qualifying local government has the opportunity to be the last bidder on a covered pool or a non-covered pool under procedures other than those described in this section4 7g7 ,additional requirements ,in addition to the requirements under this section-- 7#a7 any entity that purchases a non-covered pool shall meet all of the requirements of the ,secretary in effect on the day before the date of enactment of this section2 and 7#b7 the ,secretary may impose any other requirements with respect to the purchase of a covered pool or a non-covered pool that the ,secretary determines are appropriate4 4