II 

112TH CONGRESS 

2D SESSION S. 2120 

To require the lender or servicer of a home mortgage, upon a request by 

the homeowner for a short sale, to make a prompt decision whether 

to allow the sale. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 16, 2012 

Ms. MURKOWSKI (for herself, Mr. BROWN of Ohio, and Mr. BROWN of Massachusetts) introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To require the lender or servicer of a home mortgage, upon 

a request by the homeowner for a short sale, to make 

a prompt decision whether to allow the sale. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Prompt Notification 

5 of Short Sales Act’’. 

6 SEC. 2. PROMPT DECISION REGARDING SHORT SALE. 

7 (a) REQUIREMENT FOR PROMPT DECISION.— 

8 (1) IN GENERAL.— 


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1 (A) WRITTEN RESPONSE TO MORTGAGOR

2 REQUESTS REQUIRED.— 

3 (i) IN GENERAL.—Each servicer shall 

4 respond in writing to a mortgagor of a res5 idential mortgage loan who has submitted 

6 a written request that meets the require7 ments of paragraph (2), not later than the 

8 end of the 75-calendar day period begin9 ning on the date of receipt of such request, 

10 subject to subparagraphs (B) and (C). 

11 (ii) APPLICABILITY.—Clause (i) shall 

12 apply, except as provided in subsection (b), 

13 and notwithstanding any other provision of 

14 law or of any contract, including a contract 

15 between a servicer of a residential mort16 gage loan and a securitization vehicle or 

17 other investment vehicle. 

18 (B) CONTENT.—A written response by a 

19 servicer under subparagraph (A) shall specify— 

20 (i) a decision on whether such request 

21 has been denied, approved, or that such re22 quest has been approved subject to speci23 fied changes; or 


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1 (ii) that additional time is required, in 

2 which case the servicer shall provide a new 

3 decision date. 

4 (C) SINGLE EXTENSION OF NEW DECISION

5 DATE AUTHORIZED.—A servicer may, upon 

6 written notice to the mortgagor, extend a new 

7 decision date provided under subparagraph 

8 (B)(ii) one single time, for a period of not 

9 longer than 21 additional calendar days. 

10 (2) MORTGAGOR SUBMISSION.—Paragraph (1) 

11 shall apply in any case in which the mortgagor 

12 under a residential mortgage loan submits to the 

13 servicer thereof— 

14 (A) a written offer for a short sale of the 

15 dwelling or residential real property that is sub16 ject to the mortgage, deed of trust, or other se17 curity interest that secures the mortgage loan; 

18 and 

19 (B) all information required by the servicer 

20 in connection with such a request (including a 

21 copy of an executed contract between the owner 

22 of the dwelling or property and the prospective 

23 buyer that is subject to approval by the 

24 servicer). 


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1 (3) CIVIL ACTIONS AUTHORIZED.—An ag2 grieved individual may bring an action in a court of 

3 competent jurisdiction, asserting a violation of this 

4 Act. Aggrieved individuals may be awarded all ap5 propriate relief, including equitable relief, and a 

6 monetary award of $1,000 per violation, plus reason7 able attorneys’ fees, or such higher amount as may 

8 be appropriate in the case of an established pattern 

9 or practice of such failures. 

10 (b) INAPPLICABILITY TO CERTAIN EXISTING MORT11 GAGES.—Subsection (a) shall not apply with respect to 

12 any residential mortgage with respect to which the mort13 gagor and the mortgagee or servicer have entered into a 

14 written agreement before the date of enactment of this Act 

15 explicitly providing a procedure or terms for approval of 

16 a short sale. 

17 (c) TREATMENT OF OTHER TIME LIMITS.—This sec18 tion may not be construed to preempt, annul, or otherwise 

19 affect any other provision of law or of any contract or pro20 gram that provides a shorter period than is provided under 

21 subsection (a) for a decision by the servicer of a residential 

22 mortgage loan regarding a short sale of the dwelling or 

23 residential real property that is subject to the mortgage, 

24 deed or trust, or other security interest that secures the 

25 mortgage loan. 


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1 (d) DEFINITIONS.—For purposes of this Act, the fol2 lowing definitions shall apply: 

3 (1) RESIDENTIAL MORTGAGE LOAN.—The term 

4 ‘‘residential mortgage loan’’ means any consumer 

5 credit transaction that is secured by a mortgage, 

6 deed of trust, or other equivalent consensual security 

7 interest on a dwelling or on residential real property 

8 that includes a dwelling, other than a consumer 

9 credit transaction under an open end credit plan or 

10 an extension of credit relating to a plan described in 

11 section 101(53D) of title 11, United States Code. 

12 (2) SECURITIZATION VEHICLE.—The term 

13 ‘‘securitization vehicle’’ means a trust, special pur14 pose entity, or other legal structure that is used to 

15 facilitate the issuing of securities, participation cer16 tificates, or similar instruments backed by or refer17 ring to a pool of assets that includes residential 

18 mortgage loans (or instruments that are related to 

19 residential mortgage loans, such as credit-linked 

20 notes). 

21 (3) SERVICER.—The term ‘‘servicer’’ has the 

22 same meaning as in section 129A, except that such 

23 term includes a person who makes or holds a resi24 dential mortgage loan (including a pool of residential 


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1 mortgage loans), if such person also services the 

2 loan. 

3 (4) SHORT SALE.—The term ‘‘short sale’’ 

4 means the sale of the dwelling or residential real 

5 property that is subject to the mortgage, deed or 

6 trust, or other security interest that secures a resi7 dential mortgage loan that— 

8 (A) will result in proceeds in an amount 

9 that is less than the remaining amount due 

10 under the mortgage loan; and 

11 (B) requires authorization by the securiti12 zation vehicle or other investment vehicle or 

13 holder of the mortgage loan, or the servicer act14 ing on behalf of such a vehicle or holder. 

Æ 


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