II 

118TH CONGRESS 

2D SESSION S. 3784 

To provide requirements for the bulk auction or group sale of certain nonperforming loans, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 8 (legislative day, FEBRUARY 7), 2024 

Mr. REED (for himself, Mr. BROWN, Ms. SMITH, Mr. WYDEN, and Mr. 

MERKLEY) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To provide requirements for the bulk auction or group sale 

of certain non-performing loans, and for other purposes. 

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 ‘‘Preserving Homes and 

5 Communities Act of 2024’’. 

6 SEC. 2. SALE OF FHA NON-PERFORMING SINGLE FAMILY 

7 MORTGAGE LOANS. 

8 (a) IN GENERAL.—Title II of the National Housing 

9 Act (12 U.S.C. 1707 et seq.) is amended by adding at 

10 the end the following: 


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1 ‘‘SEC. 259. SALE OF NON-PERFORMING SINGLE FAMILY 

2 MORTGAGE LOANS. 

3 ‘‘(a) SINGLE FAMILY SALES.—The Secretary may 

4 conduct sales of 1 or more single family non-performing 

5 residential mortgage loans insured under this title only if 

6 the following requirements are met: 

7 ‘‘(1) The Secretary determines that no other 

8 reasonable measures other than a sale are available 

9 to restore the Fund to, or keep the Fund above, the 

10 minimum capital requirements under section 

11 205(f)(4). 

12 ‘‘(2) The Secretary establishes a system that 

13 provides priority to Federal, State, local, or Tribal 

14 governments or nonprofit organizations that have 

15 the capacity and experience required for buying, 

16 servicing, and resolving single family mortgage loans 

17 in a manner that promotes affordable housing, fair 

18 housing, affordable homeownership, housing coun19 seling, or neighborhood stabilization. 

20 ‘‘(3) Applicable loss mitigation required under 

21 section 230 is exhausted before any loan is placed 

22 into the loan sale. 

23 ‘‘(4) Clear, written notice is sent by certified 

24 and first-class mail by the servicer to the borrower 

25 of the loan, all owners of record, and any applicable 

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1 retary, not less than 90 days before the inclusion of 

2 the loan in any single family sale— 

3 ‘‘(A) stating that the loan will be included 

4 in a single family sale of non-performing loans; 

5 and 

6 ‘‘(B) describing the sale process, includ7 ing— 

8 ‘‘(i) the loss mitigation or other pro9 tections available to the borrower and 

10 other owners of record both before and 

11 after the sale; 

12 ‘‘(ii) the status of any loss mitigation 

13 actions offered by the mortgagee with re14 spect to the loan, including decisions on all 

15 loss mitigation reviews, descriptions of any 

16 loss mitigation options offered or denied, 

17 and supporting documentation for the 

18 most recent evaluation; and 

19 ‘‘(iii) the obligations of the servicer of 

20 the loan before and after the sale, includ21 ing loss mitigation requirements. 

22 ‘‘(5) Purchasers take loans subject to the fol23 lowing requirements: 

24 ‘‘(A) The provision of loss mitigation op25 tions to all eligible borrowers that offer terms 


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1 and protections at least as favorable as those 

2 available under loss mitigation guidelines of the 

3 Federal Housing Administration, including the 

4 absence of fees for loss mitigation and loan 

5 modifications that reduce payments to an af6 fordable level. 

7 ‘‘(B) The provision of a deferral program 

8 that offers terms and protections at least as fa9 vorable as those provided by a partial claim 

10 available under loss mitigation guidelines of the 

11 Federal Housing Administration, including the 

12 absence of fees, to borrowers who can afford 

13 their pre-hardship mortgage payment. 

14 ‘‘(C) Written, public disclosure of post-sale 

15 loss mitigation options. 

16 ‘‘(D) Failure by the purchaser to follow 

17 the established loss mitigation guidelines shall 

18 serve as a defense to a judicial foreclosure and 

19 a basis to enjoin or otherwise stay a non-judi20 cial foreclosure. 

21 ‘‘(E) Data reporting as provided under 

22 subsection (d)(1). 

23 ‘‘(F) Maintenance of vacant and aban24 doned property, including the payment of local 

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1 ferred to a nonprofit organization or the prop2 erty is sold to a bona fide third-party pur3 chaser. 

4 ‘‘(G) Where a property becomes vacant, 

5 the purchaser shall not release the lien until the 

6 property is sold or donated. 

7 ‘‘(H) Use of contract for deed, lease to 

8 own, or a land installment contract to sell or 

9 otherwise transfer any property that is secured 

10 by a purchased loan shall be prohibited unless 

11 the tenant or purchaser is a nonprofit organiza12 tion. 

13 ‘‘(I) For all non-performing loans where a 

14 home retention loss mitigation option is not 

15 possible and the purchaser acquires the prop16 erty through foreclosure sale, 75 percent of 

17 those properties shall be— 

18 ‘‘(i) sold at the current fair market 

19 value to an owner occupant; 

20 ‘‘(ii) sold or donated to a non-profit or 

21 local government entity that will commit to 

22 1 of the outcomes described in clause (i) or 

23 (iii); 

24 ‘‘(iii) for not less than the 10-year pe25 riod beginning on the date on which any 


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1 entity initially leases the property, and 

2 with respect to any new lease beginning 

3 within such 10-year period, leased to a ten4 ant with income that is not more than 100 

5 percent of the area median income at the 

6 time the tenant initially leases the prop7 erty, with monthly rents that are not more 

8 than 30 percent of the monthly household 

9 income, provided that the property owner 

10 accepts as rental payment any legal source 

11 of income, including— 

12 ‘‘(I) a housing voucher under sec13 tion 8 of the United States Housing 

14 Act of 1937 (42 U.S.C. 1437f) and 

15 any form of Federal, State, or local 

16 housing assistance provided to a per17 son or family or provided to a housing 

18 owner on behalf of a person or family, 

19 including— 

20 ‘‘(aa) rental vouchers; 

21 ‘‘(bb) rental assistance; 

22 ‘‘(cc) rental subsidies from 

23 nongovernmental organizations; 

24 and 


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1 ‘‘(dd) homeownership sub2 sidies; 

3 ‘‘(II) income received as a 

4 monthly benefit under title II of the 

5 Social Security Act (42 U.S.C. 401 et 

6 seq.), as a supplemental security in7 come benefit under title XVI of the 

8 Social Security Act (42 U.S.C. 1381 

9 et seq.), or as a benefit under the 

10 Railroad Retirement Act of 1974 (45 

11 U.S.C. 231 et seq.), including any 

12 such benefit to which the individual is 

13 entitled for which payment is made to 

14 a representative payee; 

15 ‘‘(III) income received by court 

16 order, including spousal support and 

17 child support; 

18 ‘‘(IV) any payment from a trust, 

19 guardian, conservator, cosigner, or 

20 relative; and 

21 ‘‘(V) any other lawful source of 

22 income or funds, including savings ac23 counts and investments; or 

24 ‘‘(iv) for any property that is not hab25 itable, demolished or donated to a land 


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1 bank with a cash donation to cover demoli2 tion costs. 

3 ‘‘(b) DIRECT LOAN SALES.—The Secretary may per4 mit direct loan sales of single family non-performing resi5 dential loans insured under this title only if— 

6 ‘‘(1) the loans are sold to municipalities, land 

7 banks, or nonprofit organizations that work in af8 fordable housing, housing counseling, or neighbor9 hood stabilization; 

10 ‘‘(2) the purchaser complies with the require11 ments under paragraph (5) of subsection (a); and 

12 ‘‘(3) the pricing reasonably reflects the costs of 

13 complying with the requirements under paragraphs 

14 (3) through (5) of subsection (a). 

15 ‘‘(c) FORBEARANCE.—The Secretary may not sell— 

16 ‘‘(1) a single family non-performing residential 

17 loan insured under this Title while the loan is in a 

18 forbearance plan. 

19 ‘‘(2) a single family non-performing residential 

20 loan insured under this title that is not more than 

21 90 days from the end of a forbearance plan. 

22 ‘‘(d) DATA AND REPORTING.— 

23 ‘‘(1) PURCHASER REPORTING.—During the 4- 

24 year period following any single family sale of non25 performing residential single family mortgage loans 


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1 under subsection (a) or (b), the Secretary shall re2 quire each purchaser of such a loan, including any 

3 subsequent purchaser of the loan, to provide to the 

4 Secretary quarterly loan-level data regarding the 

5 treatment and outcome of the loan, including— 

6 ‘‘(A) loan characteristics, including loan 

7 type, remaining loan term, loan to value ratio, 

8 number of months in arrears, loss mitigation 

9 status, and foreclosure status at time of sale; 

10 ‘‘(B) loss mitigation data, including wheth11 er loss mitigation was provided by the pur12 chaser, debt-to-income ratio and percent pay13 ment reduction for any modified loans, fore14 closures begun or completed, and performance 

15 of modified loans; 

16 ‘‘(C) demographic data for the borrower 

17 and any co-borrower, including race, national 

18 origin, sex, ZIP Code, and census tract, and, if 

19 available, disability status and veteran status; 

20 and 

21 ‘‘(D) other purchaser actions, including 

22 charge offs and resales of loans and dates for 

23 such actions. 

24 ‘‘(2) SEMIANNUAL REPORTS TO CONGRESS.— 

25 The Secretary shall submit to Congress, and make 


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1 publicly available at no cost to the public in a format 

2 that is readily accessible on the website of the De3 partment of Housing and Urban Development, semi4 annual reports to Congress on— 

5 ‘‘(A) loans sold in a single family sale 

6 under subsection (a), disaggregated by pool, in7 cluding— 

8 ‘‘(i) the number of loans and types of 

9 loans; 

10 ‘‘(ii) mean and median delinquency 

11 and loan to value ratios at the time of the 

12 sale; 

13 ‘‘(iii) the number and percentage of 

14 owner-occupied properties; 

15 ‘‘(iv) the number and percentage of 

16 loans modified prior to the sale; 

17 ‘‘(v) the number and percentage of 

18 loans in foreclosure proceedings at the 

19 time of the sale; and 

20 ‘‘(vi) demographic and geographic 

21 data, including property locations by cen22 sus tract or larger geographic location if 

23 necessary to protect personally identifiable 

24 information; 


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1 ‘‘(B) the performance of loans after a sin2 gle family sale under subsection (a), 

3 disaggregated by loan pool, including the initial 

4 purchaser, current owner, current servicer, data 

5 summarizing any alternatives to foreclosure of6 fered and enacted, and data summarizing the 

7 data collected under paragraph (1); 

8 ‘‘(C) the results of a fair lending analysis 

9 conducted based on the data in paragraph (1) 

10 to identify any discriminatory impacts or out11 comes associated with the sales; and 

12 ‘‘(D) claims paid through the Claims With13 out Conveyance of Title program under section 

14 204(a)(1)(C), including the number of third 

15 party sales by ZIP Code, whether purchasers 

16 are owner-occupants, nonprofit organizations, 

17 government entities, or investors, and the 

18 source of funds or financing used by pur19 chasers. 

20 ‘‘(e) PENALTIES FOR NONCOMPLIANCE.—The Sec21 retary may— 

22 ‘‘(1) forcibly retain loans or properties, without 

23 providing compensation, from purchasers that do not 

24 meet the requirements under subsection (a)(5); and 


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1 ‘‘(2) enact additional penalties for purchasers 

2 described in paragraph (1) that the Secretary deter3 mines have repeatedly not complied with the require4 ments under subsection (a)(5), including monetary 

5 penalties and prohibition from participating in single 

6 family sales under this section. 

7 ‘‘(f) REGULATIONS.—The Secretary shall issue regu8 lations related to single family sales in accordance with 

9 the requirements in this section. 

10 ‘‘SEC. 260. CLAIMS WITHOUT CONVEYANCE OF TITLE FIRST 

11 LOOK PROGRAM. 

12 ‘‘(a) CLAIMS WITHOUT CONVEYANCE OF TITLE

13 FIRST LOOK PROGRAM.—With respect to a third party 

14 sale of properties foreclosed upon and put up for sale in 

15 accordance with section 204(a)(1)(C), the Secretary shall 

16 maintain an exclusive right for eligible buyers to purchase 

17 these properties at a price at or below the fair market 

18 value of the property (with appropriate adjustments) for 

19 a specified period of time at the start of post-foreclosure 

20 sale efforts. 

21 ‘‘(b) ELIGIBLE BUYERS.—The right to purchase a 

22 property under subsection (a) shall be offered to— 

23 ‘‘(1) homebuyers who will occupy the property 

24 as a principal residence; 

25 ‘‘(2) nonprofit organizations that— 


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1 ‘‘(A) commit in advance to rehabilitate the 

2 property and dispose of the property for an al3 lowable use and within a time period to be des4 ignated by the Secretary by regulation; 

5 ‘‘(B) are pre-approved for participation by 

6 the Secretary or a designee thereof to ensure 

7 that the organization— 

8 ‘‘(i) maintains active tax-exempt sta9 tus under section 501(c)(3) of the Internal 

10 Revenue Code; 

11 ‘‘(ii) has a primary mission related 

12 to— 

13 ‘‘(I) affordable housing; or 

14 ‘‘(II) community revitalization 

15 through housing-related activities; and 

16 ‘‘(iii) has demonstrated not less than 

17 2 years of direct experience with real es18 tate project development as an organiza19 tional entity; and 

20 ‘‘(3) Federal, State, local, or Tribal government 

21 agencies or instrumentalities that meet the require22 ments of subparagraph (A) and clauses (ii) and (iii) 

23 of subparagraph (B) of paragraph (2). 

24 ‘‘(c) ALLOWABLE USES.—An allowable use described 

25 in this subsection shall include— 


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1 ‘‘(1) renovation and sale, or, if the property al2 ready meets the minimum property standards set by 

3 the Assistant Secretary for Housing and Federal 

4 Housing Commissioner, sale without renovation, to 

5 an owner-occupant with an income that is not more 

6 than 120 percent of the area median income; 

7 ‘‘(2) renovation and creation of affordable 

8 homeownership or, if the property already meets the 

9 minimum property standards set by the Assistant 

10 Secretary for Housing and Federal Housing Com11 missioner, creation of affordable homeownership 

12 without renovation, by a community land trust or 

13 shared equity homeownership program; 

14 ‘‘(3) renovation and rental to tenants with an 

15 income that is not more than 100 percent of the 

16 area median income at the time the tenant initially 

17 leases the property, with monthly rents that are not 

18 more than 30 percent of the monthly household in19 come, for not less than the 10-year period beginning 

20 on the date on which any entity initially leases the 

21 property, and with respect to any new lease begin22 ning within such 10-year period, provided that the 

23 property owner accepts as rental payment any legal 

24 source of income, including— 


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1 ‘‘(A) a housing voucher under section 8 of 

2 the United States Housing Act of 1937 (42 

3 U.S.C. 1437f) and any form of Federal, State, 

4 or local housing assistance provided to a person 

5 or family or provided to a housing owner on be6 half of a person or family, including— 

7 ‘‘(i) rental vouchers; 

8 ‘‘(ii) rental assistance; 

9 ‘‘(iii) rental subsidies from nongovern10 mental organizations; and 

11 ‘‘(iv) homeownership subsidies; 

12 ‘‘(B) income received as a monthly benefit 

13 under title II of the Social Security Act (42 

14 U.S.C. 401 et seq.), as a supplemental security 

15 income benefit under title XVI of the Social Se16 curity Act (42 U.S.C. 1381 et seq.), or as a 

17 benefit under the Railroad Retirement Act of 

18 1974 (45 U.S.C. 231 et seq.), including any 

19 such benefit to which the individual is entitled 

20 for which payment is made to a representative 

21 payee; 

22 ‘‘(C) income received by court order, in23 cluding spousal support and child support; 

24 ‘‘(D) any payment from a trust, guardian, 

25 conservator, cosigner, or relative; and 


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1 ‘‘(E) any other lawful source of income or 

2 funds, including savings accounts and invest3 ments; and 

4 ‘‘(4) demolition, but only if the property is va5 cant or uninhabitable and if the demolition is part 

6 of a strategy that incorporates rehabilitation, new 

7 construction, or designation of the land for use as a 

8 public amenity. 

9 ‘‘(d) REPORTING REQUIREMENTS.— 

10 ‘‘(1) IN GENERAL.—Each purchaser of a prop11 erty under this section, other than an owner-occu12 pant, shall, on an annual basis until the purchaser 

13 completes the allowable use of the property under 

14 subsection (c), report to the Secretary— 

15 ‘‘(A) the start date and completion date of 

16 any rehabilitation; 

17 ‘‘(B) the scope of work for and the total 

18 cost of any rehabilitation; 

19 ‘‘(C) the end-use of the property, including 

20 sale to owner-occupant, use in a land trust or 

21 other shared equity program, or affordable 

22 rental; 

23 ‘‘(D) the demographics of the end-user of 

24 the property, whether an owner-occupant or a 

25 tenant, including race, national origin, sex, ZIP 


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1 Code, and census tract, and, if available, dis2 ability status and veteran status; and 

3 ‘‘(E) the approximate income of the end4 user of the property expressed as a percentage 

5 of the area median income. 

6 ‘‘(2) AVAILABILITY.—The Secretary shall, on 

7 an annual basis, make the information collected 

8 under paragraph (1) publicly available at no cost to 

9 the public in a readily accessible format on the 

10 website of the Department of Housing and Urban 

11 Development. 

12 ‘‘(e) USE OF THIRD PARTY VENDORS.—The Sec13 retary may contract with a third-party vendor to assist 

14 in carrying out the provisions of this section, including 

15 to— 

16 ‘‘(1) pre-approve nonprofit organizations for 

17 participation in the Claims Without Conveyance of 

18 Title First Look program; 

19 ‘‘(2) monitor compliance with allowable uses 

20 and time periods designated by the Secretary by reg21 ulation; and 

22 ‘‘(3) facilitate reporting to the Secretary. 

23 ‘‘(f) ACCESS.—The Secretary shall ensure that any 

24 eligible buyer seeking to purchase a property under this 


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1 section can easily access and inspect the property prior 

2 to making a commitment to purchase the property.’’. 

3 (b) REGULATIONS.—Not later than 18 months after 

4 the date of enactment of this Act, the Secretary of Hous5 ing and Urban Development shall promulgate regulations 

6 to carry out the amendments made by this section. 

7 SEC. 3. SALE OF FANNIE MAE AND FREDDIE MAC NON-PER8 FORMING LOANS. 

9 The Federal Housing Enterprises Financial Safety 

10 and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 

11 amended by inserting after section 1328 (12 U.S.C. 4548) 

12 the following: 

13 ‘‘SEC. 1329. SALE OF NON-PERFORMING LOANS. 

14 ‘‘(a) BULK AUCTION OR GROUP SALES.—An enter15 prise may not conduct bulk auctions or other group sales 

16 of single family non-performing residential loans unless 

17 the following requirements are met: 

18 ‘‘(1) The enterprise establishes a system that 

19 provides priority to Federal, State, local, or Tribal 

20 governments or nonprofit organizations that have 

21 the capacity and experience required for buying, 

22 servicing, and resolving single family mortgage loans 

23 in a manner that promotes affordable housing, fair 

24 housing, affordable homeownership, provision of 

25 housing counseling, or neighborhood stabilization 


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1 ‘‘(2) Applicable loss mitigation is exhausted be2 fore a loan may be placed into the bulk auction or 

3 group sale. 

4 ‘‘(3) Clear, written notice is sent by the enter5 prise or servicer through certified and first-class 

6 mail to the borrower and all owners of record, with 

7 a copy sent to the enterprise if sent by the servicer, 

8 not less than 90 days before the inclusion of the 

9 loan in any proposed sale— 

10 ‘‘(A) stating that the loan will be included 

11 in a bulk auction or group sale of non-per12 forming loans; and 

13 ‘‘(B) describing the bulk auction or group 

14 sale process, including— 

15 ‘‘(i) the loss mitigation or other pro16 tections available to the borrower and 

17 other owners of record both before and 

18 after the auction or sale; 

19 ‘‘(ii) the status of any loss mitigation 

20 actions offered by the mortgagee with re21 spect to the loan, including decisions on all 

22 loss mitigation reviews, descriptions of any 

23 loss mitigation options offered or denied, 

24 and supporting documentation for the 

25 most recent evaluation; and 


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1 ‘‘(iii) the obligations of the servicer of 

2 the loan before and after the auction or 

3 sale, including loss mitigation require4 ments. 

5 ‘‘(4) The enterprise requires in the terms of the 

6 bulk auction or group sale that purchasers take 

7 loans subject to the following requirements: 

8 ‘‘(A) The purchaser is required to provide 

9 loss mitigation options to all eligible borrowers 

10 that offer terms and protections at least as fa11 vorable as those available under loss mitigation 

12 guidelines of the enterprise, including the ab13 sence of fees for loss mitigation and loan modi14 fications that reduce payments to an affordable 

15 level. 

16 ‘‘(B) The purchaser is required to offer a 

17 deferral program that offers terms and protec18 tions at least as favorable as those available 

19 under loss mitigation guidelines of the enter20 prise, including the absence of fees, to bor21 rowers who can afford their pre-hardship mort22 gage payment. 

23 ‘‘(C) The purchaser is required to provide 

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1 gation options that the purchaser makes avail2 able to eligible borrowers. 

3 ‘‘(D) Failure by the purchaser to follow 

4 the established loss mitigation guidelines shall 

5 serve as a defense to a judicial foreclosure and 

6 a basis to enjoin or otherwise stay a non-judi7 cial foreclosure. 

8 ‘‘(E) Data reporting as provided under 

9 subsection (c)(1). 

10 ‘‘(F) If a property becomes vacant, the 

11 purchaser shall not release the lien until the 

12 property is sold or donated. 

13 ‘‘(G) Use of contract for deed, lease to 

14 own, or a land installment contract to sell or 

15 otherwise transfer any property that is secured 

16 by a purchased loan shall be prohibited unless 

17 the tenant or purchaser is a nonprofit organiza18 tion. 

19 ‘‘(H) For all non-performing loans where a 

20 home-retention loss mitigation option is not 

21 possible and the purchaser acquires the prop22 erty through foreclosure sale, 75 percent of 

23 those properties shall be— 

24 ‘‘(i) sold at the current fair market 

25 value to an owner-occupant; 


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1 ‘‘(ii) sold or donated to a nonprofit or 

2 local government entity that will commit to 

3 1 of the outcomes described in clause (i) or 

4 (iii); 

5 ‘‘(iii) for not less than the 10-year pe6 riod beginning on the date on which any 

7 entity initially leases the property, and 

8 with respect to any new lease beginning 

9 within such 10-year period, leased to a ten10 ant with an income that is not more than 

11 100 percent of the area median income at 

12 the time the tenant initially leases the 

13 property, with monthly rents that are not 

14 more than 30 percent of the monthly 

15 household income, provided that the prop16 erty owner accepts as rental payment any 

17 legal source of income, including— 

18 ‘‘(I) a housing voucher under sec19 tion 8 of the United States Housing 

20 Act of 1937 (42 U.S.C. 1437f) and 

21 any form of Federal, State, or local 

22 housing assistance provided to a per23 son or family or provided to a housing 

24 owner on behalf of a person or family, 

25 including— 


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1 ‘‘(aa) rental vouchers; 

2 ‘‘(bb) rental assistance; 

3 ‘‘(cc) rental subsidies from 

4 nongovernmental organizations; 

5 and 

6 ‘‘(dd) homeownership sub7 sidies; 

8 ‘‘(II) income received as a 

9 monthly benefit under title II of the 

10 Social Security Act (42 U.S.C. 401 et 

11 seq.), as a supplemental security in12 come benefit under title XVI of the 

13 Social Security Act (42 U.S.C. 1381 

14 et seq.), or as a benefit under the 

15 Railroad Retirement Act of 1974 (45 

16 U.S.C. 231 et seq.), including any 

17 such benefit to which the individual is 

18 entitled for which payment is made to 

19 a representative payee; 

20 ‘‘(III) income received by court 

21 order, including spousal support and 

22 child support; 

23 ‘‘(IV) any payment from a trust, 

24 guardian, conservator, cosigner, or 

25 relative; and 


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1 ‘‘(V) any other lawful source of 

2 income or funds, including savings ac3 counts and investments; or 

4 ‘‘(iv) for any property that is not hab5 itable, demolished or donated to a land 

6 bank with a cash donation to cover demoli7 tion costs. 

8 ‘‘(5) The enterprise maintains vacant and aban9 doned property until such time as title is transferred 

10 to a nonprofit organization or the property is sold to 

11 a bona fide third-party purchaser. 

12 ‘‘(b) FORBEARANCE.—An enterprise may not sell— 

13 ‘‘(1) a single family non-performing residential 

14 loan while the loan is in a forbearance plan; 

15 ‘‘(2) a single family non-performing residential 

16 loan that is not more than 90 days removed from 

17 the end of a forbearance plan. 

18 ‘‘(c) DATA AND REPORTING.— 

19 ‘‘(1) PURCHASER REPORTING.—During the 4- 

20 year period following any auction or sale of single 

21 family non-performing residential loans under sub22 section (a), the Director shall require the enterprise 

23 to collect from each purchaser of such loans, includ24 ing any subsequent purchaser of a loan, quarterly 


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1 loan-level data regarding the treatment and outcome 

2 of the loan, including— 

3 ‘‘(A) loan characteristics, including loan 

4 type, remaining loan term, loan to value ratio, 

5 number of months in arrears, loss mitigation 

6 status, and foreclosure status at time of sale; 

7 ‘‘(B) loss mitigation data, including wheth8 er loss mitigation was provided by the pur9 chaser, debt-to-income ratio and percent pay10 ment reduction for any modified loans, fore11 closures begun or completed, and performance 

12 of modified loans; 

13 ‘‘(C) demographic data for each borrower 

14 and any co-borrower, including race, national 

15 origin, sex, ZIP Code, and census tract, and, if 

16 available, disability status and veteran status; 

17 and 

18 ‘‘(D) other purchaser actions, including 

19 charge offs and resales of loans and dates for 

20 such actions. 

21 ‘‘(2) SEMIANNUAL REPORTS TO CONGRESS.— 

22 The Director shall submit to Congress, and make 

23 publicly available at no cost to the public in a readily 

24 accessible format on the website of the Agency, 

25 semi-annual reports on— 


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1 ‘‘(A) loans sold in an auction or sale under 

2 subsection (a) by each enterprise, disaggregated 

3 by pool, including— 

4 ‘‘(i) the number of loans and types of 

5 loans; 

6 ‘‘(ii) mean and median delinquency 

7 and loan to value ratios at the time of the 

8 sale; 

9 ‘‘(iii) the number and percentage of 

10 owner-occupied properties; 

11 ‘‘(iv) the number and percentage of 

12 loans modified prior to auction or sale; 

13 ‘‘(v) the number and percentage of 

14 loans in foreclosure proceedings at the 

15 time of auction or sale; and 

16 ‘‘(vi) demographic and geographic 

17 data, including property locations by cen18 sus tract or larger geographic location if 

19 necessary to protect personally identifiable 

20 information; 

21 ‘‘(B) the performance of loans after an 

22 auction or sale under subsection (a), 

23 disaggregated by loan pool, including the initial 

24 purchaser, current owner, current servicer, data 

25 summarizing any alternatives to foreclosure ofVerDate Sep 11 2014 23:55 Feb 12, 2024 Jkt 049200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S3784.IS S3784

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•S 3784 IS

1 fered and enacted, and data summarizing the 

2 data collected under subparagraph (A); and 

3 ‘‘(C) the results of a fair lending analysis 

4 conducted based on the data in subparagraphs 

5 (A) and (B) to identify any discriminatory im6 pacts or outcomes associated with the auctions 

7 or sales. 

8 ‘‘(d) PENALTIES FOR NONCOMPLIANCE.—The enter9 prises may— 

10 ‘‘(1) forcibly retain loans or properties, without 

11 providing compensation, from purchasers that do not 

12 meet the requirements under subsection (a)(4); and 

13 ‘‘(2) enact additional penalties for purchasers 

14 described in paragraph (1) that the Director deter15 mines have repeatedly not complied with the require16 ments under subsection (a)(5), including monetary 

17 penalties and prohibition from participating in sales 

18 under this section. 

19 ‘‘(e) REGULATIONS.—The Director shall issue regula20 tions defining the terms of permissible auctions or sales 

21 in accordance with the requirements in this section. 

22 ‘‘SEC. 1330. SALE OF RE-PERFORMING LOANS. 

23 ‘‘(a) BULK AUCTION OR GROUP SALES.—An enter24 prise may not conduct bulk auctions or other group sales 


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•S 3784 IS

1 of single family re-performing residential loans unless the 

2 following requirements are met: 

3 ‘‘(1) The enterprise establishes a system that 

4 provides priority to Federal, State, local, or Tribal 

5 governments or nonprofit organizations that have 

6 the capacity and experience required for buying, 

7 servicing, and resolving single family mortgage loans 

8 in a manner that promotes affordable housing, fair 

9 housing, affordable homeownership, provision of 

10 housing counseling, or neighborhood stabilization. 

11 ‘‘(2) Clear, written notice is sent by the enter12 prise or servicer through certified and first-class 

13 mail to the borrower and all owners of record, with 

14 a copy sent to the enterprise if sent by the servicer, 

15 not less than 90 days before the inclusion of the 

16 loan in any proposed sale— 

17 ‘‘(A) stating that the loan will be included 

18 in a bulk auction or group sale of re-performing 

19 loans; and 

20 ‘‘(B) describing the bulk auction or group 

21 sale process, including— 

22 ‘‘(i) the loss mitigation or other pro23 tections available to the borrower and 

24 other owners of record both before and 

25 after the auction or sale; and 


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•S 3784 IS

1 ‘‘(ii) the obligations of the servicer of 

2 the loan before and after the auction or 

3 sale, including loss mitigation require4 ments. 

5 ‘‘(3) The enterprise requires in the terms of the 

6 bulk auction or group sale that purchasers take 

7 loans subject to the following requirements: 

8 ‘‘(A) The purchaser is required to offer 

9 targeted payment relief options to borrowers 

10 that become more than 60 days delinquent on 

11 their mortgage after their loan is sold that in12 cludes deferral of principal and term extension 

13 options that reduce payments to an affordable 

14 level. 

15 ‘‘(B) The purchaser is required to offer a 

16 deferral program to borrowers that become 

17 more than 60 days delinquent on their mort18 gage after their loan is sold that offers terms 

19 and protections at least as favorable as those 

20 available under loss mitigation guidelines of the 

21 enterprise, including the absence of fees, to bor22 rowers who can afford their pre-hardship mort23 gage payment. 

24 ‘‘(C) Failure by the purchaser to follow the 

25 established loss mitigation guidelines shall serve 


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•S 3784 IS

1 as a defense to a judicial foreclosure and a 

2 basis to enjoin or otherwise stay a non-judicial 

3 foreclosure. 

4 ‘‘(D) Data reporting as provided under 

5 subsection (b)(1). 

6 ‘‘(E) If a property becomes vacant, the 

7 purchaser shall not release the lien until the 

8 property is sold or donated. 

9 ‘‘(F) Use of contract for deed, lease to 

10 own, or a land installment contract to sell or 

11 otherwise transfer any property that is secured 

12 by a purchased loan shall be prohibited unless 

13 the tenant or purchaser is a nonprofit organiza14 tion. 

15 ‘‘(b) DATA AND REPORTING.— 

16 ‘‘(1) PURCHASER REPORTING.—During the 4- 

17 year period following any auction or sale of single 

18 family re-performing residential mortgage loans 

19 under subsection (a), the Director shall require the 

20 enterprise to collect from each purchaser of such 

21 loans, including any subsequent purchaser of a loan, 

22 quarterly loan-level data regarding the treatment 

23 and outcome of the loan, including— 


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1 ‘‘(A) loan characteristics, including loan 

2 type, remaining loan term, loan to value ratio, 

3 number of months in arrears, and loan status; 

4 ‘‘(B) loss mitigation data, including wheth5 er loss mitigation was provided by the pur6 chaser, debt-to-income ratio and percent pay7 ment reduction for any modified loans, and per8 formance of modified loans; 

9 ‘‘(C) demographic data for each borrower 

10 and any co-borrower, including race, national 

11 origin, sex, ZIP Code, and census tract, and, if 

12 available, disability status and veteran status; 

13 and 

14 ‘‘(D) other purchaser actions, including 

15 charge offs and resales of loans and dates for 

16 such actions. 

17 ‘‘(2) SEMIANNUAL REPORTS TO CONGRESS.— 

18 The Director shall submit to Congress, and make 

19 publicly available at no cost to the public in a readily 

20 accessible format on the website of the Agency, 

21 semi-annual reports on— 

22 ‘‘(A) loans sold in an auction or sale under 

23 subsection (a) by each enterprise, disaggregated 

24 by pool, including— 


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1 ‘‘(i) the number of loans and types of 

2 loans; 

3 ‘‘(ii) mean and median delinquency 

4 and loan to value ratios at the time of the 

5 sale; 

6 ‘‘(iii) the number and percentage of 

7 loans modified prior to auction or sale; and 

8 ‘‘(iv) demographic and geographic 

9 data, including property locations by cen10 sus tract or larger geographic location if 

11 necessary to protect personally identifiable 

12 information. 

13 ‘‘(B) the performance of loans after an 

14 auction or sale under subsection (a), 

15 disaggregated by loan pool, including the initial 

16 purchaser, current owner, current servicer, data 

17 summarizing any alternatives to foreclosure of18 fered and enacted, and data summarizing the 

19 data collected under subparagraph (A); and 

20 ‘‘(C) the results of a fair lending analysis 

21 conducted based on the data in subparagraphs 

22 (A) and (B) to identify any discriminatory im23 pacts or outcomes associated with the auctions 

24 or sales. 


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1 ‘‘(c) PENALTIES FOR NONCOMPLIANCE.—The enter2 prises may forcibly retain loans or properties, without pro3 viding compensation, from purchasers that do not meet 

4 the requirements under subsection (a)(3). 

5 ‘‘(d) REGULATIONS.—The Director shall issue regu6 lations defining the terms of permissible auctions or sales 

7 in accordance with the requirements in this section.’’. 

Æ 


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