,,ii #aaith ,,congress #ast ,session ,s4 #aiba ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #bb1 #bjbe ,ms4 ,blunt ,rochester 7for herself and ,mr4 ,rounds7 introduced the following bill2 which was read twice and referred to the ,committee on ,veterans' ,affairs ,a ,,bill ,to amend title #ch1 ,united ,states ,code1 to modify the administration of housing loans of the ,department of ,veterans ,affairs to prevent or resolve default under such loans1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,veterans ,housing ,stability ,act of #bjbe4 #b4 ,modification of administration of housing loans of ,department of ,veterans ,affairs to prevent or resolve default 7a7 ,partial ,claim ,program ,subchapter ,,iii of chapter #cg of title #ch1 ,united ,states ,code1 is amended by inserting after section #cgbb the following new section3 #cgbc4 ,partial ,claim ,program 7a7 ,in general ,the ,secretary shall establish a program under this section1 to be known as the ,partial ,claim ,program1 under which the ,secretary may make a partial claim with respect to a loan guaranteed under this chapter if the ,secretary determines that such loan is in default or faces imminent default4 7b7 ,partial claim defined ,in this section1 the term partial claim1 with respect to a loan guaranteed under this chapter1 means the purchase by the ,secretary of a portion of indebtedness under the guaranteed loan1 under which-- 7#a7 the ,secretary pays the holder of the guaranteed loan the amount of indebtedness the ,secretary determines necessary to help prevent or resolve a default2 7#b7 the borrower of the guaranteed loan enters into a noninterest-bearing agreement to repay the portion of indebtedness at loan maturity2 and 7#c7 the ,secretary receives-- 7,a7 a secured interest in the property1 subordinate to the first lien guaranteed loan1 serving as collateral for the guaranteed loan2 or 7,b7 agreement from the holder to remit to the ,secretary the portion of indebtedness reimbursed by the borrower to the holder4 7c7 ,administration of partial claim 7#a7 ,amount of claim 7,a7 ,in general ,except as provided in subparagraphs 7,b7 and 7,c71 the amount of a partial claim under this section with respect to a loan guaranteed under this chapter may not exceed #be percent of the unpaid principal balance of the guaranteed loan as of the date that the initial partial claim is made4 7,b7 ,certain individuals ,in the case of an individual who was delinquent on the date of the enactment of the ,veterans ,housing ,stability ,act of #bjbe1 the amount of a partial claim under this section with respect to a loan guaranteed under this chapter may not exceed #cj percent of the unpaid principal balance of the guaranteed loan as of the date that the initial partial claim is made4 7,c7 ,disasters ,in response to a major disaster declared by the ,president under section #dja of the ,robert ,t4 ,stafford ,disaster ,relief and ,emergency ,assistance ,act 7#db ,u4,s4,c4 #eagj71 the ,secretary may increase the cap specified in subparagraph 7,a7 to #cj percent of the unpaid principal balance of the guaranteed loan as of the date that the initial partial claim is made4 7#b7 ,application of claim ,a holder of a loan guaranteed under this chapter who receives a partial claim under this section with respect to such loan shall apply the payment first to arrearages1 if any1 on the guaranteed loan1 which may include any additional costs 7such as taxes1 insurance premiums1 or homeowner's dues7 the ,secretary determines necessary to prevent or resolve a default4 7#c7 ,no advance on loan guaranty ,the ,secretary may not structure a partial claim under this section as an advance on a loan guaranty provided under this chapter4 7#d7 ,expenses ,expenses related to a partial claim under this section1 including administrative expenses associated with such partial claim1 may not be charged to the borrower of the guaranteed loan with respect to which the partial claim is paid4 7d7 ,requirements of loan holder 7#a7 ,agent of ,secretary ,the ,secretary may require the holder of a loan guaranteed under this chapter who receives a partial claim under this section to service the partial claim as an agent of the ,secretary4 7#b7 ,establishment of claim ,the ,secretary may require the holder of a loan guaranteed under this chapter who receives a partial claim under this section to take any actions necessary to establish the partial claim1 including preparing1 executing1 transmitting1 receiving1 and recording loan documents4 7#c7 ,compensation of holder ,the ,secretary shall compensate the holder of a loan guaranteed under this chapter who receives a partial claim under this section appropriately1 as determined by the ,secretary1 for the services required of such holder under this subsection4 7#d7 ,exercise of powers ,the ,secretary may exercise the authority of the ,secretary under this subsection without regard to any other provision of law not enacted expressly in limitation of this section that would otherwise govern the expenditure of public funds4 7e7 ,default and foreclosure 7#a7 ,default 7,a7 ,in general ,notwithstanding section #cgjc7;e7 of this title1 an individual who defaults under a partial claim made under this section shall be liable to the ,secretary for any loss suffered by the ,secretary resulting from such default1 and such loss may be recovered in the same manner as any other debt due the ,united ,states4 7,b7 ,reduction of entitlement ,once an individual has entered into a partial claim and until that partial claim has been fully repaid1 the ,secretary shall reduce the aggregate amount of guaranty or insurance housing loan entitlement available to the individual1 for any new mortgage loan1 under this chapter4 7#b7 ,foreclosure ,notwithstanding section #bdaj7;c7 of title #bh1 an action to foreclose a lien held by the ,united ,states arising under a partial claim made under this section shall follow foreclosure procedures in accordance with ,state or local law where the property involved is located4 7f7 ,decisions by the ,secretary 7#a7 ,sole discretion ,any partial claim under this section shall be made in the sole discretion of the ,secretary and on terms and conditions acceptable to the ,secretary that are consistent with this section4 7#b7 ,final and conclusive ,any decision by the ,secretary under this section is final and conclusive and is not subject to judicial review4 7#c7 ,effect on provision of benefits ,for purposes of section #eaa of this title1 any decision under this section shall not be treated as a decision under a law that affects the provision of benefits4 7g7 ,compliance 7#a7 ,processing payments ,the ,secretary may establish standards for processing payments under this section based on a certification by a holder of a loan guaranteed under this chapter that the holder has complied with all applicable requirements established by the ,secretary4 7#b7 ,audits ,the ,secretary shall carry out1 on a random-sampling basis1 post-payment audits to ensure compliance with all requirements described in paragraph 7#a74 7h7 ,administrative guidance 7#a7 ,in general ,the ,secretary may implement the ,partial ,claim ,program through administrative guidance for a period of not more than three years beginning on the date on which the ,secretary establishes the program4 7#b7 ,extension ,the ,secretary may extend the period described in paragraph 7#a7 based on programmatic or budgetary considerations4 7#c7 ,additional requirements ,the ,secretary may establish through administrative guidance described in paragraph 7#a7 additional requirements applicable to partial claims under this section1 which shall include the prohibition under subsection 7c77#d74 7i7 ,rule of construction ,nothing in this section shall be construed to limit the authority of the ,secretary under subsections 7a7 and 7d7 of section #cgcb of this title4 4 7b7 ,civil penalties ,such subchapter is further amended by inserting after section #cgbc1 as added by subsection 7a71 the following new section3 #cgbd4 ,civil penalties with respect to loan holders 7a7 ,in general ,any holder of a loan guaranteed under this chapter that knowingly and materially makes a false statement under section #cgbc or #cgcb of this title shall be liable to the ,united ,states ,government for a civil penalty equal to the greater of-- 7#a7 two times the amount of the loss suffered by the ,secretary2 or 7#b7 another appropriate amount determined by the ,secretary1 not to exceed #bg1hid4 7b7 ,recovery ,a civil penalty under this section may be recovered in the same manner as any other debt due the ,united ,states4 7c7 ,additional charges ,in assessing a civil penalty under this section1 the ,secretary may charge administrative costs1 fees1 and interest1 as appropriate1 in a manner similar to the interest and administrative costs charged under section #ecae of this title4 7d7 ,determinations ,all determinations necessary to carry out this section shall be made by the ,secretary4 4 7c7 ,procedure on default ,section #cgcb of title #ch1 ,united ,states ,code1 is amended-- 7#a7 in subsection 7a7-- 7,a7 in paragraph 7#a71 by striking obligation each place it appears and inserting loan2 7,b7 in paragraph 7#b7-- 7i7 by amending subparagraph 7,a7 to read as follows3 7,a7 ,the ,secretary may1 upon such terms and conditions as determined by the ,secretary-- 7i7 pay the holder of a loan guaranteed under this chapter an amount necessary to avoid the foreclosure of such loan2 7ii7 require the holder of the loan and the veteran obligated on the loan to execute all documents necessary to ensure the ,secretary obtains-- 7,i7 a secured interest in the property covered by the loan2 or 7,,ii7 agreement from the holder to remit to the ,secretary the portion of indebtedness reimbursed by the borrower to the holder2 and 7iii7 require the holder of the loan to take any actions necessary to carry out this paragraph1 including preparing1 executing1 transmitting1 receiving1 and recording documents1 and requiring the holder of the loan to place the loan in forbearance4 2 7ii7 in subparagraph 7,b71 by striking obligation each place it appears and inserting housing loan2 and 7iii7 by adding at the end the following new subparagraphs3 7,c7 7i7 ,any decision by the ,secretary under this paragraph is final and conclusive and is not subject to judicial review4 7ii7 ,for purposes of section #eaa of this title1 any decision under this paragraph shall not be treated as a decision under a law that affects the provision of benefits4 7,d7 7i7 ,the ,secretary may establish standards for processing payments under this paragraph based on a certification by a holder of a loan guaranteed under this chapter that the holder has complied with all applicable requirements established by the ,secretary4 7ii7 ,the ,secretary shall carry out1 on a random-sampling basis1 post-payment audits to ensure compliance with all requirements described in clause 7i74 2 and 7,c7 in paragraph 7#e71 by striking obligation and inserting loan2 7#b7 in subsection 7c77#aj77;,b77i71 by striking forebearance each place it appears and inserting forbearance2 and 7#c7 by adding at the end the following new subsection3 7d7 ,the ,secretary shall prescribe loss mitigation procedures1 including a mandatory sequence in which the holder of a loan guaranteed under this chapter shall offer loss mitigation options to veterans1 to help prevent the foreclosure of any such loan4 4 7d7 ,foreclosure guidance ,the ,secretary of ,veterans ,affairs shall strongly encourage holders of loans guaranteed under chapter #cg of title #ch1 ,united ,states ,code1 to implement a moratorium on foreclosures of such loans until the ,partial ,claim ,program established under section #cgcb of title #ch1 ,united ,states ,code1 as added by subsection 7a71 is fully operational4 7e7 ,clerical amendment ,the table of sections at the beginning of chapter #cg of title #ch1 ,united ,states ,code1 is amended by inserting after the item relating to section #cgbb the following new items3 #cgbc4 ,partial ,claim ,program4 #cgbd4 ,civil penalties with respect to loan holders4 4