I 

112TH CONGRESS 

2D SESSION H. R. 4848 

To save neighborhoods and keep families in their homes by encouraging 

mortgage loan modifications and suspending foreclosures and evictions. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 26, 2012 

Mr. CLARKE of Michigan (for himself, Mr. LEWIS of Georgia, Mr. CONYERS, 

Mr. GEORGE MILLER of California, Mr. CLEAVER, Ms. KAPTUR, Mr. 

GRIJALVA, Ms. WATERS, Mr. CARSON of Indiana, Mr. JACKSON of Illinois, Ms. CLARKE of New York, and Mr. ELLISON) introduced the following bill; which was referred to the Committee on the Judiciary, and 

in addition to the Committee on Financial Services, for a period to be 

subsequently determined by the Speaker, in each case for consideration 

of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To save neighborhoods and keep families in their homes 

by encouraging mortgage loan modifications and suspending foreclosures and evictions. 

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 ‘‘Save Our Neighbor5 hoods Act of 2012’’. 


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1 SEC. 2. STAYS OF FORECLOSURES. 

2 (a) CAUSE OF ACTION.— 

3 (1) IN GENERAL.—A mortgagor of a property 

4 subject to a federally related mortgage loan may file 

5 a motion before a court in the jurisdiction in which 

6 the property is located for an order under subsection 

7 (d). 

8 (2) INTERIM ORDER.—The court shall, on the 

9 date of such filing, enter an order that shall— 

10 (A) stay any foreclosure proceedings (in11 cluding proceedings before a State court) that 

12 have been brought against the property that is 

13 subject to the federally related mortgage loan; 

14 and 

15 (B) remain in effect for a period of 60 

16 days, beginning on the date that the order is 

17 entered. 

18 (3) LIMITATION.—The mortgagor of the prop19 erty subject to a federally related mortgage loan is 

20 only allowed to file one motion under subsection 

21 (a)(1). 

22 (b) CONSENSUAL REVISION OF MORTGAGE.—The 

23 mortgagor and mortgagee shall meet not later than 30 

24 days after the mortgagor files under subsection (a). Not 

25 later than 15 days prior to that meeting, the mortgagee 

26 shall provide the mortgagor with a list of local housing 


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1 counseling agencies approved by the Secretary of Housing 

2 and Urban Development. The mortgagor may be accom3 panied by a counselor from such an agency. If the mort4 gagor and mortgagee execute a consensually modified 

5 mortgage agreement within 60 days of the court granting 

6 the stay, the order under subsection (a)(2) would termi7 nate. If at the end of the 60 days an agreement has not 

8 been reached, the court may issue an order under sub9 section (d) in accordance with subsection (c). The mort10 gagor may request not more than 1 additional meeting 

11 after the first meeting and before the end of the period 

12 during which foreclosure proceedings are stayed pursuant 

13 to an order under subsection (a) or (d). The mortgagee 

14 shall comply with that request not later than 30 days after 

15 that request. 

16 (c) STANDARD OF PROOF.—The court shall grant a 

17 motion under subsection (a)(1) for an order under sub18 section (d), if the mortgagor demonstrates by a preponder19 ance of the evidence the following: 

20 (1) That the mortgagor has a reasonable ability 

21 to make payments described under subsection (d)(5). 

22 (2) Financial hardship of the mortgagor. 

23 (3) That the property subject to the mortgage 

24 would be the primary residence of the mortgagor. 


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1 (d) ORDER DESCRIBED.—An order under this sub2 section shall, beginning on the date that is 60 days after 

3 the filing of the motion under subsection (a)(1)— 

4 (1) stay any foreclosure proceedings that have 

5 been brought against the property that is subject to 

6 the federally related mortgage loan, including pro7 ceedings before a State court and eviction or de8 tainer proceedings in a non-judicial foreclosure 

9 State; 

10 (2) remain in effect for a period of up to 3 

11 years beginning on the date that the order is en12 tered, except that the period shall terminate if an 

13 agreement under subsection (b) is executed during 

14 such period; 

15 (3) prohibit the assessment or collection of any 

16 late fees regarding payments on the federally related 

17 mortgage loan; 

18 (4) toll the statute of limitations for any other 

19 applicable laws pertaining to the federally related 

20 mortgage loan; 

21 (5) require that the mortgagor make payments 

22 in an amount the court determines appropriate, 

23 which may include the fair market rental value of 

24 the property (determined by the court in accordance 


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1 with subsection (f)), to the mortgagee at such times 

2 as the court determines appropriate; and 

3 (6) require that the mortgagee apply such pay4 ments— 

5 (A) first, to any taxes owed on the prop6 erty; 

7 (B) then, to any obligations relating to in8 surance, including homeowner’s insurance on 

9 the property; 

10 (C) then, to any interest due on the mort11 gage for that period under the terms of the 

12 mortgage; and 

13 (D) finally, to the principal amount due on 

14 the mortgage for that period under the terms of 

15 the mortgage. 

16 (e) RESULT OF FAILURE TO REVISE DURING STAY

17 OF FORECLOSURE.—If an order under subsection (d) ter18 minates and the mortgagor and mortgagee have not sub19 mitted an agreement described in subsection (b) to the 

20 court on or before the date that the order terminates, the 

21 court shall enter an order— 

22 (1) ordering an appraisal to determine the fair 

23 market value of the property to be performed by a 

24 licensed appraiser approved by the Secretary of 

25 Housing and Urban Development; 


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1 (2) if the fair market value of the property, as 

2 determined by the appraiser is less than the prin3 cipal remaining on the mortgage loan, adjusting the 

4 principal amount to the fair market value, giving 

5 consideration to the appraisal and any other infor6 mation the court determines appropriate; 

7 (3) ordering reasonable interest on the principal 

8 as adjusted under paragraph (2) based on the aver9 age prime offer rate (as such term is defined in sec10 tion 129C of the Truth in Lending Act (15 U.S.C. 

11 1639c)) for mortgages; and 

12 (4) if the fair market value is greater than the 

13 principal remaining on the mortgage loan, ordering 

14 payments set at a reasonable interest rate on the re15 maining principal based on the average prime offer 

16 rate for mortgages on that date. 

17 (f) DETERMINATION OF FAIR MARKET RENTAL

18 VALUE.—In determining the fair market rental value of 

19 a property for purposes of subsection (d)(5), the court 

20 shall consider the following: 

21 (1) The fair market rents for the market area 

22 in which the property is located for similar property 

23 calculated for other Federal rental housing pro24 grams. 


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1 (2) Any other information the court determines 

2 appropriate. 

3 (g) AUTHORITY OF MAGISTRATE JUDGES.—Any pro4 ceeding regarding a motion under subsection (a) may be 

5 heard by a magistrate judge of the United States, and that 

6 magistrate judge, notwithstanding section 636(b)(1)(A) of 

7 title 28, United States Code, may issue an order in accord8 ance with this section. 

9 (h) LIMITATION ON REMEDIES.—The mortgagee’s 

10 remedies shall be limited to those that would be available 

11 as if the proceeding were a foreclosure proceeding. 

12 (i) DEFINITIONS.—In this Act: 

13 (1) The term ‘‘federally related mortgage loan’’ 

14 has the meaning given such term under section 3 of 

15 the Real Estate Settlement Procedures Act of 1974 

16 (12 U.S.C. 2602). 

17 (2) The term ‘‘financial hardship’’ means any 

18 financial burden of a mortgagor that causes that 

19 mortgagor to be reasonably unable to make a pay20 ment on that mortgage, including— 

21 (A) reduction in or loss of income that was 

22 supporting the mortgage; 

23 (B) change in household financial cir24 cumstances; 


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1 (C) recent or upcoming increase in the 

2 mortgagor’s monthly mortgage payment; 

3 (D) an unavoidable increase in other ex4 penses; 

5 (E) a lack of cash reserves to maintain 

6 payment on the mortgage and cover basic living 

7 expenses at the same time (cash reserves in8 clude assets such as cash savings, money mar9 ket funds, stocks or bonds, but exclude retire10 ment accounts); 

11 (F) excessive monthly debt payments, in12 cluding if the mortgagor has been using credit 

13 cards, a home equity loan or other credit to 

14 make the mortgage payment; 

15 (G) the mortgagor has been subject to 

16 predatory lending practices; and 

17 (H) other reasons for hardship identified 

18 and explained by the mortgagor. 

19 (3) In determining whether a lending practice is 

20 predatory, the court shall consider whether the mort21 gagor has been subject to practices including but not 

22 limited to: abusive collection practices; balloon pay23 ments; encouragement of default; repeat financing 

24 where the equity is depleted as a result of financing; 

25 excessive fees; excessive interest rates; fraud, decepVerDate Mar 15 2010 00:47 May 01, 2012 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4848.IH H4848

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1 tion, and abuse; high loan-to-value ratio; lending 

2 without regard to ability to repay; loan flipping; 

3 mandatory arbitration clauses; payday lending; pre4 payment penalties; refinancing of mortgages with a 

5 loan that does not provide a tangible economic ben6 efit to the borrower; refinancing unsecured debt; 

7 payment of single-premium credit insurance; the 

8 process of referring borrowers who qualify for lower9 cost financing to high-cost lenders; subprime lend10 ing; high yield-spread premiums. 

11 SEC. 3. REGULATORY AUTHORITY OF THE CONSUMER FI12 NANCIAL PROTECTION BUREAU. 

13 The Director of the Bureau of Consumer Financial 

14 Protection of the Federal Reserve System may make rules 

15 or issue guidance to carry out this Act. 

16 SEC. 4. DURATION OF THIS ACT. 

17 This Act shall be effective for 5 years, beginning on 

18 the date of enactment of this Act. 

Æ 


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