II 

111TH CONGRESS 

1ST SESSION S. 1731 

To require certain mortgagees to make loan modifications, to establish a 

grant program for State and local government mediation programs, to 

create databases on foreclosures, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 30, 2009 

Mr. REED (for himself, Mr. DURBIN, Mr. WHITEHOUSE, 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 require certain mortgagees to make loan modifications, 

to establish a grant program for State and local government mediation programs, to create databases on foreclosures, 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 2009’’. 

6 SEC. 2. LOAN MODIFICATION REQUIREMENTS. 

7 (a) DEFINITIONS.—In this section— 

8 (1) the term ‘‘covered mortgagee’’ means— 


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1 (A) a mortgagee under a federally related 

2 mortgage loan; and 

3 (B) the agent of a mortgagee under a fed4 erally related mortgage loan; 

5 (2) the term ‘‘covered mortgagor’’ means an in6 dividual who is a mortgagor under a federally re7 lated mortgage loan— 

8 (A) made by a covered mortgagee; 

9 (B) secured by the principal residence of 

10 the mortgagor; and 

11 (C) on which the mortgagor cannot make 

12 payments due to financial hardship, as deter13 mined by the Secretary; 

14 (3) the term ‘‘federally related mortgage loan’’ 

15 has the same meaning as in section 3 of the Real 

16 Estate Settlement Procedures Act of 1974 (12 

17 U.S.C. 2602); 

18 (4) the term ‘‘home loan modification protocol’’ 

19 means a home loan modification protocol that is de20 veloped under a home loan modification program put 

21 into effect by the Secretary of the Treasury or the 

22 Secretary; 

23 (5) the term ‘‘qualified loan modification’’ 

24 means a modification to the terms of a mortgage 

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1 ered mortgagor that is made pursuant to a deter2 mination by the covered mortgagee using a home 

3 loan modification protocol that a modification would 

4 produce a greater net present value than foreclosure 

5 to— 

6 (A) the covered mortgagee; or 

7 (B) in the aggregate, all persons that hold 

8 an interest in the mortgage agreement; and 

9 (6) the term ‘‘Secretary’’ means the Secretary 

10 of Housing and Urban Development. 

11 (b) LOAN MODIFICATION REQUIRED.— 

12 (1) IN GENERAL.—A covered mortgagee may 

13 not initiate or continue a foreclosure proceeding 

14 against a covered mortgagor that is otherwise au15 thorized under State law unless— 

16 (A) the covered mortgagee has determined 

17 whether the covered mortgagor is eligible for a 

18 qualified loan modification; 

19 (B) in the case of a covered mortgagor 

20 who the covered mortgagee determines is eligi21 ble for a qualified loan modification, the covered 

22 mortgagee has offered a qualified loan modifica23 tion to the covered mortgagor; and 

24 (C) in the case of a covered mortgagor who 

25 the covered mortgagee determines is not eligible 


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1 for a qualified loan modification, the covered 

2 mortgagee has made available to the covered 

3 mortgagor the note, deed of trust, or any other 

4 document necessary to establish the right of the 

5 mortgagee to foreclose on the mortgage. 

6 (2) NO WAIVER OF RIGHTS.—A covered mort7 gagee may not require a covered mortgagor to waive 

8 any right of the covered mortgagor as a condition of 

9 making a qualified loan modification. 

10 (3) SALE OF REAL PROPERTY SECURING MORT11 GAGE.— 

12 (A) SALE.—A covered mortgagee may not 

13 sell the real property securing the mortgage of 

14 a covered mortgagor unless the covered mort15 gagee submits to the appropriate State entity in 

16 the State in which the real property is located, 

17 a certification that the covered mortgagee has 

18 made a determination under paragraph (1)(A). 

19 (B) ACTION BY PURCHASER.—A person 

20 that purchases from a covered mortgagee the 

21 real property securing the mortgage of a cov22 ered mortgagor may not recover possession of 

23 the real property unless the covered mortgagee 

24 submits to the appropriate State entity in the 

25 State in which the real property is located, a 


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1 certification that the covered mortgagee has 

2 made a determination under paragraph (1)(A). 

3 (C) CERTIFICATION STANDARDS.—The 

4 Secretary shall establish minimum standards 

5 for the certification required under this para6 graph. 

7 (4) DEFENSE TO FORECLOSURE.—Failure to 

8 comply with this subsection shall be a defense to 

9 foreclosure. 

10 (5) RULE OF CONSTRUCTION.—Nothing in this 

11 subsection may be construed to prevent a covered 

12 mortgagee from offering or making a loan modifica13 tion with a lower payment, lower interest rate, or 

14 principal reduction beyond that required by a modi15 fication made using a home loan modification pro16 tocol with respect to a covered mortgagor. 

17 (c) FEES PROHIBITED.— 

18 (1) LOAN MODIFICATION FEES PROHIBITED.— 

19 A covered mortgagee may not charge a fee to a cov20 ered mortgagor for carrying out the requirements 

21 under subsection (b). 

22 (2) FORECLOSURE-RELATED FEES.— 

23 (A) IN GENERAL.—Except as provided in 

24 subparagraph (B), a mortgagee may not charge 


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1 a foreclosure-related fee to a mortgagor be2 fore— 

3 (i) the mortgagee has made a deter4 mination under subsection (b)(1); and 

5 (ii) the mortgage has entered the fore6 closure process. 

7 (B) DELINQUENCY FEES.—A mortgagee 

8 may charge a delinquency fee for late payment 

9 by the mortgagor. 

10 (3) FEES NOT IN CONTRACT.—A mortgagee 

11 may charge to a mortgagor only such fees as have 

12 been specified in advance by the mortgage agree13 ment. 

14 (4) FEES FOR EXPENSES INCURRED.—A mort15 gagee may charge a fee to a mortgagor only for 

16 services actually performed by the mortgagee or a 

17 third party in relation to the mortgage agreement. 

18 For purposes of this paragraph, the term ‘‘third 

19 party’’ does not include an affiliate or subsidiary of 

20 the mortgagee. 

21 (5) PENALTY.—The Secretary shall collect from 

22 any mortgagee that charges a fee in violation of this 

23 subsection an amount equal to $6,000 for each such 

24 fee. 


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1 (d) REGULATIONS.—Not later than 3 months after 

2 the date of enactment of this Act, the Secretary shall issue 

3 by notice any requirements to carry out this section. The 

4 Secretary shall subsequently issue, after notice and com5 ment, final regulations to carry out this section. 

6 SEC. 3. GRANTS TO STATES TO ASSIST HOMEOWNERS IN 

7 DEFAULT. 

8 Section 106 of the Housing and Urban Development 

9 Act of 1968 (12 U.S.C. 1701x) is amended by adding at 

10 the end the following: 

11 ‘‘(g) GRANTS TO STATES TO ASSIST HOMEOWNERS

12 IN DEFAULT.— 

13 ‘‘(1) DEFINITIONS.—In this subsection— 

14 ‘‘(A) the term ‘eligible agency’ means a 

15 State housing finance agency or an agency des16 ignated by the State as an eligible agency; 

17 ‘‘(B) the term ‘eligible homeowner’ means 

18 a mortgagor who— 

19 ‘‘(i) is a permanent resident of the 

20 State in which the principal residence of 

21 the mortgagor is located; 

22 ‘‘(ii) agrees to seek counseling from a 

23 counseling agency approved by the Sec24 retary if the eligible homeowner receives a 


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1 loan or grant made using funds under this 

2 subsection; 

3 ‘‘(iii) is suffering from financial hard4 ship which is unexpected or due to cir5 cumstances beyond the control of the mort6 gagor; 

7 ‘‘(iv) is unable to correct any delin8 quency on any amounts past due on the 

9 home loan of such mortgagor within a rea10 sonable time without financial assistance; 

11 ‘‘(v) has requested a loan modification 

12 from the mortgagee; 

13 ‘‘(vi) is unable to make full payment 

14 on any home loan payment due for all liens 

15 within the 30-day period following the date 

16 of the application by the mortgagor for a 

17 loan or grant using funds under this sub18 section; 

19 ‘‘(vii) the eligible agency determines 

20 has a reasonable probability of resuming 

21 full payments due for all liens on the mort22 gage of such mortgagor not later than 15 

23 months after the date on which the mort24 gagor receives a loan or grant using funds 

25 under this subsection; and 


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1 ‘‘(viii) has not previously received a 

2 loan or grant using funds under this sub3 section; and 

4 ‘‘(C) the term ‘mortgagor’ means a mort5 gagor under a mortgage— 

6 ‘‘(i) secured by a 1- to 4-family 

7 owner-occupied residence (including a 1- 

8 family unit in a condominium project and 

9 a membership interest and occupancy 

10 agreement in a cooperative housing 

11 project) that is used as the principal resi12 dence of the mortgagor; 

13 ‘‘(ii) with an interest rate that does 

14 not exceed the prime rate of interest at the 

15 time of loan origination, as such prime 

16 rate is determined by not less than 75 per17 cent of the 30 largest depository institu18 tions in the United States; and 

19 ‘‘(iii) for an amount that does not ex20 ceed the conforming loan limit for conven21 tional mortgages, as determined under sec22 tion 302(b)(2) of the Federal National 

23 Mortgage Association Charter Act (12 

24 U.S.C. 1717(b)(2)). 


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1 ‘‘(2) GRANT PROGRAM ESTABLISHED.—The 

2 Secretary shall award grants to eligible agencies, to 

3 enable eligible agencies to provide— 

4 ‘‘(A) 1-time emergency grants or sub5 sidized loans to eligible homeowners to assist 

6 such eligible homeowners in satisfying any 

7 amounts past due on their home loans; 

8 ‘‘(B) grants or subsidized loans to eligible 

9 homeowners for a specified number of future 

10 mortgage payments by the eligible homeowners; 

11 and 

12 ‘‘(C) stipends of not more than $1,500 to 

13 assist with relocation expenses for homeowners 

14 not eligible for the program. 

15 ‘‘(3) ADDITIONAL SERVICES PROVIDED BY ELI16 GIBLE AGENCY.—An eligible agency that receives a 

17 grant under this subsection shall provide— 

18 ‘‘(A) a readily accessible source for infor19 mation on, and referral to, public services avail20 able to assist a homeowner who is in default on 

21 their home loan; 

22 ‘‘(B) a homeowner with referrals to coun23 seling agencies approved by the Department of 

24 Housing and Urban Development that may be 


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1 able to assist that homeowner, if that home2 owner is in default on their home loan; 

3 ‘‘(C) information to homeowners on avail4 able community resources relating to homeown5 ership, including— 

6 ‘‘(i) public assistance or benefits pro7 grams; 

8 ‘‘(ii) mortgage assistance programs, 

9 including programs that help homeowners 

10 prepare documents for loan modification 

11 applications; 

12 ‘‘(iii) home repair assistance pro13 grams; 

14 ‘‘(iv) legal assistance programs; 

15 ‘‘(v) utility assistance programs; 

16 ‘‘(vi) food assistance programs; and 

17 ‘‘(vii) other Federal, State, or local 

18 government funded social services; and 

19 ‘‘(D) staff who— 

20 ‘‘(i) are able to conduct a brief assess21 ment of the situation of a homeowner; and 

22 ‘‘(ii) based on such assessment, make 

23 appropriate referrals to, and provide appli24 cation information regarding, programs 


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1 that can provide assistance to such home2 owner. 

3 ‘‘(4) FORMULA.—Not later than 3 months after 

4 the date of enactment of the Preserving Homes and 

5 Communities Act of 2009, the Secretary shall de6 velop a formula for the award of funds under this 

7 subsection that includes the following factors: 

8 ‘‘(A) The population of the State, as deter9 mined by the Bureau of the Census in most re10 cent estimate of the resident population of the 

11 State. 

12 ‘‘(B) The rate of mortgages in the State 

13 that are delinquent more than 90 days. 

14 ‘‘(C) The ratio of foreclosures to owner-oc15 cupied households in the State. 

16 ‘‘(D) The change, if any, in the rate of un17 employment in the State between 2007 and 

18 2008. 

19 ‘‘(5) PROGRAM REQUIREMENTS.— 

20 ‘‘(A) SELECTION CRITERIA.— 

21 ‘‘(i) IN GENERAL.—Each eligible enti22 ty that receives a grant under this sub23 section shall develop selection criteria for 

24 eligible homeowners seeking a grant or 

25 subsidized loan under this subsection. 


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1 ‘‘(ii) INCOME REPORTING.—A mort2 gagor that receives a grant or subsidized 

3 loan under this subsection shall be re4 quired, in accordance with criteria pre5 scribed by the eligible agency, to report 

6 any increase in income. 

7 ‘‘(B) LOAN REQUIREMENTS.— 

8 ‘‘(i) INTEREST RATE.—Any loan made 

9 using a grant under this subsection shall 

10 carry a simple annual percentage rate of 

11 interest which shall not exceed the prime 

12 rate of interest, as such prime rate is de13 termined from time to time by not less 

14 than 75 percent of the 30 largest deposi15 tory institutions in the United States. 

16 ‘‘(ii) COMPOUND INTEREST PROHIB17 ITED.—Interest on the outstanding prin18 cipal balance of any loan under this sub19 section shall not compound. 

20 ‘‘(iii) BALANCE DUE.— 

21 ‘‘(I) IN GENERAL.—The principal 

22 of any loan made under this para23 graph, including any interest accrued 

24 on such principal, shall not be due 

25 and payable unless the real property 


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1 securing such loan is sold or trans2 ferred. 

3 ‘‘(II) DEPOSIT OF BALANCE

4 DUE.—If an event described in sub5 clause (I) occurs, the principal of any 

6 loan made under this subsection, in7 cluding any interest accrued on such 

8 principal, shall immediately become 

9 due and payable to the eligible agency 

10 from which the loan originated. 

11 ‘‘(iv) PREPAYMENT.—Any eligible 

12 homeowner who receives a loan using a 

13 grant made under this subsection may 

14 repay the loan in full, without penalty, by 

15 lump sum or by installment payments, at 

16 any time prior to the loan becoming due 

17 and payable. 

18 ‘‘(v) MAXIMUM AMOUNT.—The 

19 amount of any loan to any 1 eligible home20 owner under this subsection may not ex21 ceed 20 percent of the original mortgage 

22 amount borrowed by the eligible home23 owner. 

24 ‘‘(vi) SUBORDINATION.—Any loan 

25 made using a grant under this subsection 


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1 will be subordinated to any refinancing of 

2 the first mortgage, any preexisting subor3 dinate financing, any purchase money 

4 mortgage, or subordinated for any other 

5 reason, as determined by the eligible agen6 cy. 

7 ‘‘(6) SEPARATE ACCOUNT.— 

8 ‘‘(A) SEPARATE ACCOUNT.—An eligible 

9 agency that receives a grant under this sub10 section shall establish a separate account in 

11 which to hold amounts received under this sub12 section. 

13 ‘‘(B) REPAYMENT OF LOANS.—Any 

14 amounts repaid on a subsidized loan made 

15 under this subsection shall be deposited in the 

16 account established under subparagraph (A). 

17 ‘‘(C) OTHER FUNDING.—Amounts donated 

18 or otherwise directed to be used for purposes of 

19 this subsection may be deposited in the account 

20 established under subparagraph (A) to help 

21 capitalize such account. 

22 ‘‘(7) USE OF GRANT FUNDS.— 

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1 poses of this subsection may be used only for 

2 the purposes described in paragraph (2). 

3 ‘‘(B) EXCEPTION FOR ADMINISTRATIVE

4 COSTS.—An eligible agency may use not more 

5 than 5 percent of any funds received under this 

6 subsection for administrative costs relating to 

7 activities carried out under paragraph (2). 

8 ‘‘(8) EXISTING LOAN FUNDS.—Any eligible 

9 agency with a previously existing fund established to 

10 make loans to assist homeowners in satisfying any 

11 amounts past due on their home loan or for future 

12 payments may use funds appropriated for purposes 

13 of this subsection for that existing loan fund, even 

14 if the eligibility, application, program, or use re15 quirements for that loan program differ from the eli16 gibility, application, program, and use requirements 

17 of this subsection, unless such use is expressly deter18 mined by the Secretary to be inappropriate. 

19 ‘‘(9) AUTHORIZATION OF APPROPRIATIONS.— 

20 There are authorized to be appropriated to carry out 

21 this section— 

22 ‘‘(A) $6,375,000,000 for fiscal year 2010; 

23 and 

24 ‘‘(B) such sums as may be necessary for 

25 each of fiscal years 2011 through 2013.’’. 


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1 SEC. 4. MEDIATION INITIATIVES. 

2 (a) DEFINITIONS.—In this section— 

3 (1) the term ‘‘mortgagee’’ includes the agent of 

4 a mortgagee; and 

5 (2) the term ‘‘Secretary’’ means the Secretary 

6 of Housing and Urban Development. 

7 (b) GRANT PROGRAM ESTABLISHED.—The Secretary 

8 shall establish a grant program to make competitive 

9 grants to State and local governments to establish medi10 ation programs that assist mortgagors facing foreclosure. 

11 (c) MEDIATION PROGRAMS.—A mediation program 

12 established using a grant under this section shall— 

13 (1) require participation in the program by— 

14 (A) any mortgagee that initiates a fore15 closure proceeding; and 

16 (B) any mortgagor who is subject to a 

17 foreclosure proceeding; 

18 (2) require any mortgagee or mortgagor re19 quired to participate in the program to make a good 

20 faith effort to resolve issues relating to foreclosure 

21 proceedings through mediation; 

22 (3) if mediation is not made available to the 

23 mortgagor before a foreclosure proceeding is initi24 ated, allow the mortgagor to request mediation at 

25 any time before a foreclosure sale; 

26 (4) provide for— 


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1 (A) supervision by a State court (or a 

2 State court in conjunction with an agency or 

3 department of a State or local government) of 

4 the mediation program; 

5 (B) selection and training of neutral, third6 party mediators by a State court (or an agency 

7 or department of the State or local govern8 ment); 

9 (C) penalties to be imposed by a State 

10 court, or an agency or department of a State or 

11 local government, if a mortgagee fails to comply 

12 with an order to participate in mediation; and 

13 (D) consideration by a State court (or an 

14 agency or department of a State or local gov15 ernment) of recommendations by a mediator re16 lating to penalties for failure to fulfill the re17 quirements of the mediation program; 

18 (5) require that each mortgagee that partici19 pates in the mediation program make available to 

20 the mortgagor, before and during participation in 

21 the mediation program, documentation of— 

22 (A) a loan modification calculation or net 

23 present value calculation made by the mort24 gagee in relation to the mortgage using a home 

25 loan modification protocol— 


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1 (i) developed under a home loan modi2 fication program put into effect by the 

3 Secretary of the Treasury or the Secretary; 

4 or 

5 (ii) approved by the Secretary; 

6 (B) the loan origination, including any 

7 note, deed of trust, or other document nec8 essary to establish the right of the mortgagee to 

9 foreclose on the mortgage; 

10 (C) any pooling and servicing agreement 

11 that the mortgagee believes prohibits a loan 

12 modification; 

13 (D) the payment history of the mortgagor 

14 and a detailed accounting of any costs or fees 

15 associated with the account of the mortgagor; 

16 and 

17 (E) the specific alternatives to foreclosure 

18 considered by the mortgagee, including loan 

19 modifications, workout agreements, and short 

20 sales; 

21 (6) prohibit a mortgagee from shifting the costs 

22 of participation in the mediation program, including 

23 the attorney’s fees of the mortgagee, to a mortgagor; 

24 (7) provide that— 


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1 (A) any holder of a junior lien against the 

2 property that secures a mortgage that is the 

3 subject of a mediation— 

4 (i) be notified of the mediation; and 

5 (ii) be permitted to participate in the 

6 mediation; and 

7 (B) any proceeding initiated by a holder of 

8 a junior lien against the property that secures 

9 a mortgage that is the subject of a mediation 

10 be stayed pending the mediation; 

11 (8) provide information to mortgagors about 

12 housing counselors approved by the Secretary; and 

13 (9) be free of charge to the mortgagor and 

14 mortgagee. 

15 (d) RECORDKEEPING.—A State or local government 

16 that receives a grant under this section shall keep a record 

17 of the outcome of each mediation carried out under the 

18 mediation program, including the nature of any loan modi19 fication made as a result of participation in the mediation 

20 program. 

21 (e) TARGETING.—A State that receives a grant under 

22 this section may establish— 

23 (1) a State-wide mediation program; or 


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1 (2) a mediation program in a specific locality 

2 that the State determines has a high need for such 

3 program due to— 

4 (A) the number of foreclosures in the local5 ity; or 

6 (B) other characteristics of the locality 

7 that contribute to the number of foreclosures in 

8 the locality. 

9 (f) FEDERAL SHARE.—The Federal share of the cost 

10 of a mediation program established using a grant under 

11 this section may not exceed 50 percent. 

12 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

13 are authorized to be appropriated to carry out this sec14 tion— 

15 (1) $80,000,000 for fiscal year 2010; and 

16 (2) such sums as may be necessary for each of 

17 fiscal years 2011 through 2013. 

18 SEC. 5. OVERSIGHT OF PUBLIC AND PRIVATE EFFORTS TO 

19 REDUCE MORTGAGE DEFAULTS AND FORE20 CLOSURES. 

21 (a) DEFINITIONS.—In this section— 

22 (1) the term ‘‘heads of appropriate agencies’’ 

23 means the Comptroller of the Currency, the Board 

24 of Governors of the Federal Reserve System, the 

25 Federal Deposit Insurance Corporation, the National 


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1 Credit Union Administration, the Director of the Of2 fice of Thrift Supervision, and a representative of 

3 State banking regulators selected by the Secretary of 

4 Housing and Urban Development; 

5 (2) the term ‘‘mortgagee’’ means— 

6 (A) an original lender under a mortgage; 

7 (B) any servicers, affiliates, agents, sub8 sidiaries, successors, or assignees of an original 

9 lender; and 

10 (C) any subsequent purchaser, trustee, or 

11 transferee of any mortgage or credit instrument 

12 issued by an original lender; 

13 (3) the term ‘‘Secretary’’ means the Secretary 

14 of Housing and Urban Development; and 

15 (4) the term ‘‘servicer’’ means any person who 

16 collects on a home loan, whether such person is the 

17 owner, the holder, the assignee, the nominee for the 

18 loan, or the beneficiary of a trust, or any person act19 ing on behalf of such person. 

20 (b) MONITORING OF HOME LOANS.— 

21 (1) IN GENERAL.—The Secretary, in consulta22 tion with the heads of appropriate agencies, shall de23 velop and implement a plan to monitor— 

24 (A) conditions and trends in homeowner25 ship and the mortgage industry, in order to preVerDate Nov 24 2008 02:16 Oct 01, 2009 Jkt 079200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\S1731.IS S1731

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1 dict trends in foreclosures to better understand 

2 other critical aspects of the mortgage market; 

3 and 

4 (B) the effectiveness of public efforts to re5 duce mortgage defaults and foreclosures. 

6 (2) REPORT TO CONGRESS.—Not later than 1 

7 year after the development of the plan under para8 graph (1), and each year thereafter, the Secretary 

9 shall submit a report to Congress that— 

10 (A) summarizes and describes the findings 

11 of the monitoring required under paragraph 

12 (1); and 

13 (B) includes recommendations or proposals 

14 for legislative or administrative action nec15 essary— 

16 (i) to increase the authority of the 

17 Secretary to levy penalties against any 

18 mortgagee, or other person or entity, who 

19 fails to comply with the requirements de20 scribed in this section; 

21 (ii) to improve coordination between 

22 public and private initiatives to reduce the 

23 overall rate of mortgage defaults and fore24 closures; and 


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1 (iii) to improve coordination between 

2 initiatives undertaken by Federal, State, 

3 and local governments. 

4 (c) NATIONAL DATABASE ON DEFAULTS AND FORE5 CLOSURES.— 

6 (1) IN GENERAL.—The Secretary, in consulta7 tion with the heads of appropriate agencies, shall de8 velop recommendations for a national database on 

9 mortgage defaults and foreclosures that— 

10 (A) provide information to Federal regu11 latory agencies on— 

12 (i) mortgagees that generate home 

13 loans that go into default or foreclosure at 

14 a rate significantly higher than the na15 tional average for such mortgagees; 

16 (ii) the factors associated with such 

17 higher rates; and 

18 (iii) other factors and indicators that 

19 the Secretary determines are critical to 

20 monitoring the mortgage markets; and 

21 (B) provide information to Federal, State, 

22 and local governments on loans, defaults, fore23 closure initiations, foreclosure completions, and 

24 sheriff sales that— 

25 (i) is not otherwise readily available; 


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1 (ii) would allow for a better under2 standing of local, regional, and national 

3 trends in delinquencies, defaults, and fore4 closures; and 

5 (iii) helps improve public policies that 

6 reduce defaults and foreclosures. 

7 (2) CONSIDERATIONS.—In developing the rec8 ommendations under paragraph (1), the Secretary 

9 shall take into consideration privacy concerns and 

10 legal issues relating to such concerns, including the 

11 advisability of establishing rules relating to access to 

12 information obtained under subsection (d). 

13 (3) REPORT TO CONGRESS ON NATIONAL DATA14 BASE.—Not later than 12 months after the date of 

15 enactment of this Act, the Secretary shall submit a 

16 report to Congress that contains— 

17 (A) the recommendations developed under 

18 paragraph (1); and 

19 (B) an estimate of the cost of maintaining 

20 the database described in paragraph (1). 

21 (d) PROVISION OF DATA.— 

22 (1) DATA REPORT REQUIRED.—Not later than 

23 18 months after the date of enactment of this Act, 

24 the Secretary, in consultation with the heads of ap25 propriate agencies, shall issue final rules that reVerDate Nov 24 2008 02:16 Oct 01, 2009 Jkt 079200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\S1731.IS S1731

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1 quire each mortgagee or servicer that originates or 

2 services not fewer than 100 loans in a calendar year 

3 (or any other person that the Secretary determines 

4 can effectively provide the data described in para5 graph (2)) to submit a report to the Secretary not 

6 less frequently than once each quarter that contains 

7 data the Secretary determines are necessary to carry 

8 out this section. 

9 (2) CONTENTS OF REPORT.—Each report sub10 mitted under paragraph (1) shall contain data 

11 that— 

12 (A) for each loan, use the identification re13 quirements that are established under the 

14 Home Mortgage Disclosure Act (12 U.S.C. 

15 2801 et seq.) for data reporting, including— 

16 (i) the year of origination; 

17 (ii) the agency code of the originator; 

18 (iii) the respondent identification 

19 number of the originator; and 

20 (iv) the identifying number for the 

21 loan; 

22 (B) describe the characteristics of each 

23 home loan originated in the preceding 12 

24 months by the mortgagee or servicer (or, in the 

25 case of the first report required to be submitted 


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1 under this subsection, all active loans originated 

2 by the mortgagee or servicer), including— 

3 (i) the loan-to-value ratio at the time 

4 of origination for each mortgage on the 

5 property; 

6 (ii) the type of mortgage, such as a 

7 fixed-rate or adjustable-rate mortgage; and 

8 (iii) any other loan or loan under9 writing characteristics determined by the 

10 Secretary to be necessary in order to meet 

11 the requirements of paragraph (1) and 

12 that are not already available to the Sec13 retary through a national mortgage data14 base; 

15 (C) include the performance outcome of 

16 each home loan originated in the preceding 12 

17 months by the mortgagee or servicer (or, in the 

18 case of the first report required to be submitted 

19 under this subsection, all active loans originated 

20 by the mortgagee or servicer), including— 

21 (i) whether such home loan was in de22 linquency at any point in such 12-month 

23 period; and 


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1 (ii) whether any foreclosure pro2 ceeding was initiated on such home loan 

3 during such 12-month period; 

4 (D) are sufficient to establish for each 

5 home loan that at any point during the pre6 ceding 12 months had become 60 or more days 

7 delinquent with respect to a payment on any 

8 amount due under the home loan, or for which 

9 a foreclosure proceeding was initiated, the in10 terest rate on such home loan at the time of 

11 such delinquency or foreclosure; 

12 (E) include information relating to fore13 closures, including— 

14 (i) the date of all foreclosures initi15 ated by the mortgagee or servicer; and 

16 (ii) the combined loan-to-value ratio of 

17 all mortgages on a home at the time fore18 closure proceedings were initiated; 

19 (F) for a home loan that is in foreclosure, 

20 include information on all actions, including 

21 loan modifications, taken to resolve the problem 

22 that led to the initiation of foreclosure pro23 ceedings and all actions undertaken prior to ini24 tiation of a foreclosure proceeding to resolve a 

25 delinquency or default; 


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1 (G) identify each home loan for which a 

2 foreclosure proceeding was completed in the 

3 preceding 12 months, including— 

4 (i) foreclosure proceedings initiated in 

5 such 12-month period; and 

6 (ii) the date of the foreclosure comple7 tion; and 

8 (H) include any other information that the 

9 Secretary determines is necessary to carry out 

10 this section. 

11 (3) COMPLIANCE PLAN AND REPORT.—The 

12 Secretary, in consultation with the heads of appro13 priate agencies, shall— 

14 (A) develop a plan to monitor the compli15 ance with the requirements established in this 

16 subsection by mortgagees and servicers; and 

17 (B) submit to Congress a report on such 

18 plan. 

19 (e) CONSOLIDATED DATABASE.—The Federal Finan20 cial Institutions Examination Council shall create a con21 solidated database that establishes a connection between 

22 the data provided under the Home Mortgage Disclosure 

23 Act (12 U.S.C. 2801 et seq.) and the data provided under 

24 this subsection. 


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1 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated to carry out this sec3 tion— 

4 (1) $5,000,000 for fiscal year 2010; and 

5 (2) such sums as may be necessary for each of 

6 fiscal years 2011 through 2013. 

7 SEC. 6. HOUSING TRUST FUND. 

8 From funds received by the Secretary of the Treasury 

9 from the sale of warrants under title I of the Emergency 

10 Economic Stabilization Act of 2008 (12 U.S.C. 5211 et 

11 seq.), the Secretary of the Treasury shall transfer and 

12 credit $1,000,000,000 to the Housing Trust Fund estab13 lished under section 1338 of the Federal Housing Enter14 prises Financial Safety and Soundness Act of 1992 (12 

15 U.S.C. 4568) for use in accordance with such section. 

Æ 


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