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[House Report 114-356]
[From the U.S. Government Publishing Office]

114th Congress        }     HOUSE OF REPRESENTATIVES     {      Report
 1st Session          }                                  {     114-356
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      SERVICEMEMBER FORECLOSURE PROTECTIONS EXTENSION ACT OF 2015

                                _______
                                

December 1, 2015.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Miller of Florida, from the Committee on Veterans' Affairs, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 189]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 189) to extend foreclosure and eviction 
protections for servicemembers, and for other purposes, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Subcommittee Consideration.......................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
Statement of General Performance Goals and Objectives............     3
New Budget Authority, Entitlement Authority, and Tax Expenditures     4
Earmarks and Tax and Tariff Benefits.............................     4
Committee Cost Estimate..........................................     4
Congressional Budget Office Estimate.............................     4
Federal Mandates Statement.......................................     6
Advisory Committee Statement.....................................     6
Constitutional Authority Statement...............................     6
Applicability to Legislative Branch..............................     6
Statement on Duplication of Federal Programs.....................     6
Disclosure of Directed Rulemaking................................     6
Section-by-Section Analysis of the Legislation...................     6
Changes in Existing Law Made by the Bill as Reported.............     7

                          Purpose and Summary

    H.R. 189, the ``Servicemember Foreclosure Protections 
Extension Act of 2015,'' was ordered to be favorably reported 
to the full House on February 12, 2015, by voice vote. H.R. 189 
was introduced on January 7, 2015, by Representative Alan 
Grayson of Florida. H.R. 189 would extend through December 31, 
2016, the one-year period after a servicemember's military 
service that the servicemember is protected from any sale, 
foreclosure, or seizure of their property without a court order 
or waiver agreement signed by the servicemember.

                  Background and Need for Legislation

    The Servicemembers Civil Relief Act (SCRA) provides 
financial services protections such as interest rate relief and 
foreclosure protection for military personnel serving on active 
duty.
    Current law protects against foreclosure and eviction for 
military personnel for one-year post-active military service to 
allow servicemembers and military families sufficient time to 
get on their feet, and to avoid the stress of potentially 
losing their home as the servicemember transitions from active 
duty to civilian life. Some servicemembers, particularly those 
leaving active-duty and re-acclimating to civilian life, 
continue to face financial challenges that are likely to 
continue for the foreseeable future.
    Providing protections to servicemembers dates back to the 
enactment of the Soldiers' and Sailors' Civil Relief Act of 
1918 and the Soldiers' and Sailors' Civil Relief Act of 1940 
(SSCRA). In 2003, the SCRA was enacted to ``restate, clarify, 
and revise [the SSCRA].''\1\
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    \1\ H.Rpt. 108-81, to accompany H.R. 100, Servicemembers Civil 
Relief Act, April 30, 2003.
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    The SCRA provides for a stay of proceedings that seek to 
enforce an obligation on real or personal property owned by the 
servicemember prior to such military service, and protection 
against sale, foreclosure, or seizure of such property for a 
period of one year following a servicemember's period of 
military service.\2\ Thus, if a servicemember is unable to make 
payments on the loan due to military service, the provision 
prevents the vendor from exercising any right or option under 
the contract to rescind or terminate, to resume possession of 
the property for nonpayment of any installment due, or to 
breach the terms, except by action in a court of competent 
jurisdiction, until one year after the term of active duty 
terminates.
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    \2\ 50 U.S.C. App. 533.
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    Initially, the period of protection afforded servicemembers 
facing foreclosure was 90 days. The protection was extended to 
9 months\3\ and then one year.\4\ The authority to provide 
protection for one year has been of limited duration, and has 
been extended a number of times, most recently at the end of 
the 113th Congress.\5\
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    \3\ P.L. 110-289.
    \4\ P.L. 112-154.
    \5\ P.L. 113-286 extended these authorities to the end of 2015.
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    The current one-year protection from foreclosure will 
expire at the end of 2015 and revert back to the 90 day 
protection under the SCRA. H.R. 189 would amend P.L. 112-154, 
126 Stat. 1208 to extend the one-year protection for an 
additional year (December 31, 2016, and January 1, 2017).

                                Hearings

    On February 27, 2015, the full House Committee on Veterans' 
Affairs conducted a legislative hearing on various bills 
introduced during the first month of the 114th Congress, 
including H.R. 189. The following witnesses testified:
          The Honorable Alan Grayson, U.S. House of 
        Representatives, 9th District, Florida; Mr. David R. 
        McLenachen, Acting Deputy Under Secretary for 
        Disability Assistance, Veterans Benefits 
        Administration, U.S. Department of Veterans Affairs, 
        accompanied by Dr. Rajiv Jain, Assistant Deputy Under 
        Secretary for Health for Patient Services, Veterans 
        Health Administration, U.S. Department of Veterans 
        Affairs, Ms. Susan Sullivan, Deputy Assistant Secretary 
        for Policy, Office of Policy and Planning, U.S. 
        Department of Veterans Affairs, and Ms. Kim McLeod, 
        Counsel, Office of General Counsel, U.S. Department of 
        Veterans Affairs; Mr. Joseph A. Violante, National 
        Legislative Director, Disabled American Veterans; Mr. 
        Aleks Morosky, Deputy Director, National Legislative 
        Service, Veterans of Foreign Wars of the United States; 
        and Mr. Blake Ortner, Deputy Government Relations 
        Director, Paralyzed Veterans of America.
    Statements for the record were submitted by the following:
          The House Policy Council, Financial Services 
        Roundtable.

                       Subcommittee Consideration

    There was no subcommittee consideration of H.R. 189.

                        Committee Consideration

    On February 12, 2015, the full Committee met in an open 
markup session, a quorum being present, ordered H.R. 189, to be 
reported favorably to the House of Representatives, by voice 
vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report the legislation and amendments thereto. 
There were no recorded votes taken on amendments or in 
connection with ordering H.R. 189, reported to the House. A 
motion by Ranking Member Corrine Brown of Florida to report 
H.R. 189, favorably to the House of Representatives was agreed 
to by voice vote.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are to protect servicemembers and their 
families from foreclosing on their homes within one year 
following active duty service.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                  Earmarks and Tax and Tariff Benefits

    H.R. 189 does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI of the Rules of the House of 
Representatives.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate on H.R. 
189, prepared by the Director of the Congressional Budget 
Office pursuant to section 402 of the Congressional Budget Act 
of 1974.

               Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
for H.R. 189, provided by the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, February 25, 2015.
Hon. Jeff Miller,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 189, the 
Servicemember Foreclosure Protections Extension Act of 2015.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is David Newman.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 189--Servicemember Foreclosure Protections Extension Act of 2015

    H.R. 189 would enhance certain protections for veterans 
with home mortgages. CBO estimates that any change in direct 
spending under the bill would be insignificant.
    Under current law, veterans may receive a judicial stay of 
foreclosure proceedings on loans that were originated before 
they entered the military. Those veterans are currently 
eligible to obtain a stay during the one-year period after they 
leave military service; however, that period of eligibility 
will be shortened to nine months beginning on January 1, 2016. 
H.R. 189 would retain the one-year period of eligibility 
through December 31, 2016. (The duration of the stay of 
proceedings itself is determined by the courts.)
    Some of the loans that would be affected by that 
foreclosure protection are guaranteed by the Department of 
Veterans Affairs (VA) or the Federal Housing Administration 
(FHA). Under its home loan program, VA pays lenders up to 25 
percent of the outstanding loan debt in the event that the 
borrower defaults. Unpaid interest can be added to the 
guaranteed debt, within certain limits. FHA provides a similar 
guarantee on mortgages it insures, compensating lenders for up 
to 100 percent of the loss.
    Delaying foreclosure on borrowers who default would 
lengthen the period during which unpaid interest would accrue, 
increasing the indebtedness of the borrower. If the loan is 
eventually terminated, the claim filed by the lender would be 
larger by the amount of the additional interest, and the 
subsequent claim payment from VA or FHA would rise as a result. 
Those larger claim payments would raise the costs of both 
agencies.
    Loans that could be affected by the bill would be those 
that were originated prior to enactment of H.R. 189. Changes to 
the cost of extant mortgages would be treated as loan 
modifications and the increased costs would be recorded as 
direct spending when the modifications became effective--that 
is, at the start of calendar year 2016, when the eligibility 
period for the benefit would be shortened under current law.
    CBO expects that only a small number of veterans would have 
loans guaranteed by VA or FHA and would obtain a stay of 
foreclosure in 2016 as a result of the three additional months 
of eligibility that H.R. 189 would provide. The bill would 
apply only to mortgages that were entered into before joining 
the military. Most veterans enter the military between the ages 
of 18 and 22, a stage in life when few people have mortgages. 
Thus, CBO believes it is highly unlikely that such veterans 
would be responsible for federally guaranteed loans before they 
entered military service.
    Furthermore, CBO estimates that the average additional 
indebtedness per borrower as a result of the forbearance is 
small--about $3,000. Therefore, any increase in direct spending 
would be insignificant. Because enacting H.R. 189 would affect 
direct spending, pay-as-you-go procedures apply. Enacting H.R. 
189 would not affect revenues.
    By extending through December 31, 2016, the one-year period 
of eligibility for veterans to receive a judicial stay of 
foreclosure proceedings, the bill would impose 
intergovernmental and private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA). The cost of the mandates 
would be any loss of income by public and private entities, 
such as mortgage lenders, that could otherwise enforce an 
obligation, sale, foreclosure or seizure of the property 
without the extension. CBO expects the number of veterans who 
face foreclosure within one year of separation to be small. CBO 
further expects that few additional mortgage lenders would be 
affected by the extension and that the size of their claims 
would be small. Consequently, CBO estimates that the costs of 
the mandates would fall below the annual thresholds established 
in UMRA for intergovernmental and private-sector mandates. 
(Adjusted for inflation, those thresholds are $77 million and 
$154 million in 2015, respectively.)
    The CBO staff contacts for this estimate are David Newman 
(for federal costs), Jon Sperl (for state and local effects), 
and Paige Piper/Bach (for private-sector effects). This 
estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates regarding H.R. 189 prepared by the Director of the 
Congressional Budget Office pursuant to section 423 of the 
Unfunded Mandates Reform Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act would be created by H.R. 
189.

                 Statement of Constitutional Authority

    Pursuant to Article I, section 8 of the United States 
Constitution, the reported bill is authorized by Congress' 
power to ``provide for the common Defense and general Welfare 
of the United States.''

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

              Statement on Duplication of Federal Programs

    Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), 
the Committee finds that no provision of H.R. 189 establishes 
or reauthorizes a program of the Federal Government known to be 
duplicative of another Federal program, a program that was 
included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance.

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015), 
the Committee estimates that H.R. 189 does not require directed 
rule making.

             Section-by-Section Analysis of the Legislation

Section 1--Short title

    Section 1 would establish the short title of H.R. 189 as 
the ``Servicemember Foreclosure Protections Extension Act of 
2015.''

Section 2--Temporary extension of extended period of protections for 
        members of uniformed services relating to mortgages, mortgage 
        foreclosure, and eviction

    Section 2 would extend current authorities provided in P.L. 
112-154 to December 31, 2016 and January 1, 2017.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

HONORING AMERICA'S VETERANS AND CARING FOR CAMP LEJEUNE FAMILIES ACT OF 
                                  2012

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TITLE VII--OTHER MATTERS

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SEC. 710. EXTENDED PERIOD OF PROTECTIONS FOR MEMBERS OF UNIFORMED 
                    SERVICES RELATING TO MORTGAGES, MORTGAGE 
                    FORECLOSURE, AND EVICTION.

  (a) Stay of Proceedings and Period of Adjustment of 
Obligations Relating to Real or Personal Property.--Section 
303(b) of the Servicemembers Civil Relief Act (50 U.S.C. App. 
533(b)) is amended by striking ``within 9 months'' and 
inserting ``within one year''.
  (b) Period of Relief From Sale, Foreclosure, or Seizure.--
Section 303(c) of such Act (50 U.S.C. App. 533(c)) is amended 
by striking ``within 9 months'' and inserting ``within one 
year''.
  (c) Effective Date.--The amendments made by subsections (a) 
and (b) shall take effect on the date that is 180 days after 
the date of the enactment of this Act.
  (d) Extension of Sunset.--
          (1) In general.--The amendments made by subsections 
        (a) and (b) shall expire on [December 31, 2015] 
        December 31, 2016.
          (2) Conforming amendment.--Subsection (c) of section 
        2203 of the Housing and Economic Recovery Act of 2008 
        (Public Law 110-289; 50 U.S.C. App. 533 note) is 
        amended to read as follows:
  ``(c) Effective Date.--The amendments made by subsection (a) 
shall take effect on the date of the enactment of this Act.''.
          (3) Revival.--Effective [January 1, 2016] January 1, 
        2017, the provisions of subsections (b) and (c) of 
        section 303 of the Servicemembers Civil Relief Act (50 
        U.S.C. App. 533), as in effect on July 29, 2008, are 
        hereby revived.
  (e) Report.--
          (1) In general.--Not later than 540 days after the 
        date of the enactment of this Act, the Comptroller 
        General of the United States shall submit to Congress a 
        report on the protections provided under section 303 of 
        such Act (50 U.S.C. App 533) during the five-year 
        period ending on the date of the enactment of this Act.
          (2) Elements.--The report required by paragraph (1) 
        shall include, for the period described in such 
        paragraph, the following:
                  (A) An assessment of the effects of such 
                section on the long-term financial well-being 
                of servicemembers and their families.
                  (B) The number of servicemembers who faced 
                foreclosure during a 90-day period, 270-day 
                period, or 365-day period beginning on the date 
                on which the servicemembers completed a period 
                of military service.
                  (C) The number of servicemembers who applied 
                for a stay or adjustment under subsection (b) 
                of such section.
                  (D) A description and assessment of the 
                effect of applying for a stay or adjustment 
                under such subsection on the financial well-
                being of the servicemembers who applied for 
                such a stay or adjustment.
                  (E) An assessment of the Secretary of 
                Defense's partnerships with public and private 
                sector entities and recommendations on how the 
                Secretary should modify such partnerships to 
                improve financial education and counseling for 
                servicemembers in order to assist them in 
                achieving long-term financial stability.
          (3) Period of military service and servicemember 
        defined.--In this subsection, the terms ``period of 
        military service'' and ``servicemember'' have the 
        meanings given such terms in section 101 of such Act 
        (50 U.S.C. App. 511).

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