I 

111TH CONGRESS 

1ST SESSION H. R. 1486 

To amend the Fair Credit Reporting Act with respect to requirements relating 

to information contained in consumer reports, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 12, 2009 

Mr. MEEK of Florida introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To amend the Fair Credit Reporting Act with respect to 

requirements relating to information contained in consumer reports, 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 ‘‘Mortgage Credit Re5 pair Act of 2009’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds as follows: 

8 (1) The United States housing bubble effec9 tively burst towards the end of 2005, when default 


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1 rates on subprime and adjustable rate mortgages in2 creased dramatically. 

3 (2) Mortgages with negative amelioration or 

4 any other lending mechanism for which the loan 

5 payment on principal for any period is less than the 

6 interest charged over that period for some substan7 tial period of time have high default and foreclosure 

8 rates. 

9 (3) Mortgages in which there are incidences of 

10 fraud or lender misconduct have high foreclosure 

11 rates, including those in which— 

12 (A) a mortgage was obtained despite the 

13 lender fraudulently encouraging or requiring 

14 the borrower to falsify or omit information 

15 which was then used to call back the loan and 

16 leading to foreclosure; 

17 (B) a mortgage was obtained despite the 

18 failure by the lender to give the borrower prop19 er documentation, including Good Faith Re20 quirements and Truth in Lending Disclosures; 

21 (C) a mortgage was obtained despite occa22 sions where the borrower was given incomplete 

23 forms to sign, with the required information 

24 added by the lender after the borrower’s signa25 ture was obtained; and 


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1 (D) a mortgage was obtained despite hav2 ing terms which was substantially or wholly dif3 ferent at closing than what was previously 

4 agreed to. 

5 (4) Standard, qualifying front-end debt ratios, 

6 that is the monthly cost of a mortgage principal, in7 terest, taxes, and insurance (PITI) against the gross 

8 monthly income of the borrower have historically 

9 been approximately 28%, increasing for those with 

10 stellar credit histories. 

11 (5) However, many foreclosures and mortgage12 related bankruptcies involve borrowers who were 

13 given mortgages with flat or adjustable rates that 

14 caused front-end ratios well over 36% in many 

15 cases. 

16 (6) The effects of foreclosure or a resulting 

17 bankruptcy can have a negative impact on an indi18 vidual’s credit history for up to 7 years (10 years for 

19 bankruptcy) for purchases under $150,000 with re20 lated effects, and effects for purchases over 

21 $150,000 lasting much longer. 

22 (7) Borrowers who unknowingly obtained bad, 

23 improper or fraudulent mortgages which subse24 quently led to foreclosure, should be given the oppor25 tunity to rebuild their credit in a responsible way 


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1 without the substantial and lingering effects of fore2 closure outweighing present and past responsible 

3 borrowing practices. 

4 SEC. 3. AMENDMENT TO DEFINITIONS. 

5 Section 603 of the Fair Credit Reporting Act (U.S.C. 

6 1681a) is amended by adding at the end the following new 

7 subsection: 

8 ‘‘(y) FRONT END RATIO.—The term ‘front end ratio’ 

9 means a ratio that indicates what portion of an individ10 ual’s income is used to make mortgage payments, cal11 culated by dividing an individual’s gross monthly income 

12 by their housing expenses, particularly the mortgage prin13 cipal, interest, taxes, and insurance (PITI).’’. 

14 SEC. 4. SPECIAL CIRCUMSTANCE RELIEF. 

15 Section 605(a) of the Fair Credit Reporting Act 

16 (U.S.C. 1681c(a)) is amended— 

17 (1) by redesignating paragraphs (2), (3), (4), 

18 (5), and (6) as paragraphs (3), (4), (5), (7), and 

19 (8), respectively; 

20 (2) by inserting after paragraph (1) the fol21 lowing new paragraph: 

22 ‘‘(2) Cases under title 11 or under the Bank23 ruptcy Act that, from the date of entry of the order 

24 for relief or the date of the adjudication, as the case 


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1 may be, antedate the report by more than 3 years 

2 when each of the following are met: 

3 ‘‘(A) During a period not less than 6 

4 months prior to and continuing through the 

5 time that the bankruptcy is filed, a consumer’s 

6 front-end debt ratio on a mortgage instrument 

7 originated or refinanced on or after January 1, 

8 2003, was 37% or higher. 

9 ‘‘(B) The consumer filed for bankruptcy no 

10 earlier than January 1, 2004. 

11 ‘‘(C) The consumer has not disputed the 

12 accuracy of their report under paragraph (6) 

13 during the period beginning January 1, 2004. 

14 ‘‘(D) The consumer notifies the consumer 

15 reporting agency directly and is able to submit 

16 documentation to verify the above before March 

17 31, 2009.’’; and 

18 (3) by inserting after paragraph (5) the fol19 lowing new paragraph: 

20 ‘‘(6) Any adverse information excluding bank21 ruptcy, but including closed accounts, accounts in 

22 collections, accounts charged to profit or loss, repos23 sessions, and foreclosures, shall be excluded if all of 

24 the following circumstances have occurred: 


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1 ‘‘(A) The adverse information in the con2 sumer’s report was for new accounts and trans3 actions added after the first payment due date 

4 on the consumer’s mortgage note, where the 

5 front end ratio then became 37% or higher, but 

6 not earlier than January 1, 2004. 

7 ‘‘(B) The adverse information in the con8 sumer’s report was not added more than 6 

9 months after a foreclosure on that consumer’s 

10 primary residence or March 31, 2009, which11 ever is earlier. 

12 ‘‘(C) The consumer notifies the consumer 

13 reporting agency directly of their intent to seek 

14 relief under this paragraph and is able to pro15 vide proper documentation and verification be16 fore March 31, 2009.’’. 

17 SEC. 5. CONFORMING AMENDMENT. 

18 Subsection (b) of section 605 of the Fair Credit Re19 porting Act (U.S.C. 1681c(b)) is amended (in the matter 

20 preceding paragraph (1)) by striking ‘‘paragraphs (1) 

21 through (5)’’ and inserting ‘‘paragraphs (1), (3), (4), (5), 

22 and (7)’’. 

Æ 


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