II 

112TH CONGRESS 

1ST SESSION S. 690 

To establish the Office of the Homeowner Advocate. 

IN THE SENATE OF THE UNITED STATES 

MARCH 30, 2011 

Mr. FRANKEN (for himself, Ms. SNOWE, Mr. MENENDEZ, Mr. ROCKEFELLER, 

Mr. DURBIN, Mr. SANDERS, Mr. BROWN of Ohio, Mrs. SHAHEEN, Mr. 

LAUTENBERG, Mr. LEAHY, Mr. REED, Mr. MERKLEY, and Mrs. MURRAY) introduced the following bill; which was read twice and referred to 

the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To establish the Office of the Homeowner Advocate. 

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 ‘‘Homeowner Advocate 

5 Act of 2011’’. 

6 SEC. 2. OFFICE OF THE HOMEOWNER ADVOCATE. 

7 (a) ESTABLISHMENT.—There is established in the 

8 Department of the Treasury an office to be known as the 

9 ‘‘Office of the Homeowner Advocate’’ (in this Act referred 

10 to as the ‘‘Office’’). 


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1 (b) DIRECTOR.— 

2 (1) IN GENERAL.—The Director of the Office of 

3 the Homeowner Advocate (in this Act referred to as 

4 the ‘‘Director’’) shall report directly to the Assistant 

5 Secretary of the Treasury for Financial Stability, 

6 and shall be entitled to compensation at the same 

7 rate as the highest rate of basic pay established for 

8 the Senior Executive Service under section 5382 of 

9 title 5, United States Code. 

10 (2) APPOINTMENT.—The Director shall be ap11 pointed by the Secretary, after consultation with the 

12 Secretary of the Department of Housing and Urban 

13 Development, and without regard to the provisions 

14 of title 5, United States Code, relating to appoint15 ments in the competitive service or the Senior Exec16 utive Service. 

17 (3) QUALIFICATIONS.—An individual appointed 

18 under paragraph (2) shall have— 

19 (A) experience as an advocate for home20 owners; and 

21 (B) experience dealing with mortgage 

22 servicers. 

23 (4) RESTRICTION ON EMPLOYMENT.—An indi24 vidual may be appointed as Director only if such in25 dividual was not an officer or employee of either a 


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1 mortgage servicer or the Department of the Treas2 ury during the 4-year period preceding the date of 

3 such appointment. 

4 (5) HIRING AUTHORITY.—The Director shall 

5 have the authority to hire staff, obtain support by 

6 contract, and manage the budget of the Office of the 

7 Homeowner Advocate. 

8 SEC. 3. FUNCTIONS OF THE OFFICE. 

9 (a) IN GENERAL.—It shall be the function of the Of10 fice— 

11 (1) to assist homeowners, housing counselors, 

12 and housing lawyers in resolving problems with the 

13 Home Affordable Modification Program of the Mak14 ing Home Affordable initiative of the Secretary, au15 thorized under the Emergency Economic Stabiliza16 tion Act of 2008 (in this Act referred to as the 

17 ‘‘Home Affordable Modification Program’’); 

18 (2) to identify areas, both individual and sys19 tematic, in which homeowners, housing counselors, 

20 and housing lawyers have problems in dealings with 

21 the Home Affordable Modification Program; 

22 (3) to the extent possible, to propose changes in 

23 the administrative practices of the Home Affordable 

24 Modification Program, to mitigate problems identi25 fied under paragraph (2); 


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1 (4) to identify potential legislative changes 

2 which may be appropriate to mitigate such problems; 

3 and 

4 (5) to implement other programs and initiatives 

5 that the Director deems important to assisting 

6 homeowners, housing counselors, and housing law7 yers in resolving problems with the Home Affordable 

8 Modification Program, which may include— 

9 (A) running a triage hotline for home10 owners at risk of foreclosure; 

11 (B) providing homeowners with access to 

12 housing counseling programs of the Department 

13 of Housing and Urban Development at no cost 

14 to the homeowner; 

15 (C) developing Internet tools related to the 

16 Home Affordable Modification Program; and 

17 (D) developing training and educational 

18 materials. 

19 (b) AUTHORITY.— 

20 (1) IN GENERAL.—Staff designated by the Di21 rector shall have the authority to implement servicer 

22 remedies, on a case-by-case basis, subject to the ap23 proval of the Assistant Secretary of the Treasury for 

24 Financial Stability. 


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1 (2) RESOLUTION OF HOMEOWNER CON2 CERNS.—The Office shall, to the extent possible, re3 solve all homeowner concerns not later than 30 days 

4 after the opening of a case with such homeowner. 

5 (c) COMMENCEMENT OF OPERATIONS.—The Office 

6 shall commence its operations, as required by this Act, not 

7 later than 3 months after the date of enactment of this 

8 Act. 

9 (d) SUNSET.—The Office shall cease operations as of 

10 the date on which the Home Affordable Modification Pro11 gram ceases to operate. 

12 SEC. 4. RELATIONSHIP WITH EXISTING ENTITIES. 

13 (a) TRANSFER.—The Office shall coordinate and cen14 tralize all complaint escalations relating to the Home Af15 fordable Modification Program. 

16 (b) HOTLINE.—The HOPE hotline (or any successor 

17 triage hotline) shall reroute all complaints relating to the 

18 Home Affordable Modification Program to the Office. 

19 (c) COORDINATION.—The Office shall coordinate 

20 with the compliance office of the Office of Financial Sta21 bility of the Department of the Treasury and the Home22 ownership Preservation Office of the Department of the 

23 Treasury. 


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1 SEC. 5. RULE OF CONSTRUCTION. 

2 Nothing in this Act shall prohibit a mortgage servicer 

3 from evaluating a homeowner for eligibility under the 

4 Home Affordable Foreclosure Alternatives Program while 

5 a case is still open with the Office of the Homeowner Ad6 vocate. Nothing in this Act may be construed to relieve 

7 any loan services from otherwise applicable rules, direc8 tives, or similar guidance under the Home Affordable 

9 Modification Program relating to the continuation or com10 pletion of foreclosure proceedings. 

11 SEC. 6. REPORTS TO CONGRESS. 

12 (a) TESTIMONY.—The Director shall be available to 

13 testify before the Committee on Banking, Housing, and 

14 Urban Affairs of the Senate and the Committee on Finan15 cial Services of the House of Representatives, not less fre16 quently than 4 times a year, or at any time at the request 

17 of the Chairs of either committee. 

18 (b) REPORTS.—Once annually, the Director shall 

19 provide a detailed report to Congress on the Home Afford20 able Modification Program. Such report shall contain full 

21 and substantive analysis, in addition to statistical informa22 tion, including, at a minimum— 

23 (1) data and analysis of the types and volume 

24 of complaints received from homeowners, housing 

25 counselors, and housing lawyers, broken down by 


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1 category of servicer, except that servicers may not be 

2 identified by name in the report; 

3 (2) a summary of not fewer than 20 of the 

4 most serious problems encountered by Home Afford5 able Modification Program participants, including a 

6 description of the nature of such problems; 

7 (3) to the extent known, identification of the 10 

8 most litigated issues for Home Affordable Modifica9 tion Program participants, including recommenda10 tions for mitigating such disputes; 

11 (4) data and analysis on the resolutions of the 

12 complaints received from homeowners, housing coun13 selors, and housing lawyers; 

14 (5) identification of any programs or initiatives 

15 that the Office has taken to improve the Home Af16 fordable Modification Program; 

17 (6) recommendations for such administrative 

18 and legislative action as may be appropriate to re19 solve problems encountered by Home Affordable 

20 Modification Program participants; and 

21 (7) such other information as the Director may 

22 deem advisable. 

23 SEC. 7. FUNDING. 

24 Amounts made available for the costs of administra25 tion of the Home Affordable Modification Program that 


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1 are not otherwise obligated shall be available to carry out 

2 the duties of the Office. Funding shall be maintained at 

3 levels adequate to reasonably carry out the functions of 

4 the Office. 

5 SEC. 8. PROHIBITION ON PARTICIPATION IN MAKING HOME 

6 AFFORDABLE FOR BORROWERS WHO STRA7 TEGICALLY DEFAULT. 

8 No mortgage may be modified under the Making 

9 Home Affordable Program, or with any funds from the 

10 Troubled Asset Relief Program, unless the servicer of the 

11 mortgage loan has determined, in accordance with stand12 ards and requirements established by the Secretary of the 

13 Treasury, that the mortgagor cannot afford to make pay14 ments under the terms of the existing mortgage loan. The 

15 Secretary of the Treasury, in consultation with the Sec16 retary of Housing and Urban Development, shall issue 

17 rules to carry out this section not later than 90 days after 

18 the date of enactment of this Act. This section shall not 

19 apply to any refinancing or modifications made under the 

20 ‘‘FHA Program Adjustments to Support Refinancings for 

21 Underwater Homeowners,’’ announced by the Department 

22 of the Treasury and the Department of Housing and 

23 Urban Development on March 26, 2010, as long as the 

24 program continues to be structured so that borrowers par25 ticipating in the FHA refinance program cannot be in deVerDate Mar 15 2010 02:25 Mar 31, 2011 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S690.IS S690

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1 fault on their primary mortgage at the time of refinance 

2 and their eligibility in the program is not helped if they 

3 are in default on their second mortgage, and thus lack 

4 a strategic reason to go into default on either their first 

5 or second mortgage to participate in the program. 

6 SEC. 9. PUBLIC AVAILABILITY OF INFORMATION. 

7 (a) PUBLIC AVAILABILITY OF DATA.—The Secretary 

8 of the Treasury shall revise the guidelines for the Home 

9 Affordable Modification Program of the Making Home Af10 fordable initiative of the Secretary of the Treasury, au11 thorized under the Emergency Economic Stabilization Act 

12 of 2008 (Public Law 110–343), to establish that the data 

13 collected by the Secretary of the Treasury from each mort14 gage servicer and lender participating in the Program is 

15 made public in accordance with subsection (b). 

16 (b) CONTENT.—Not more than 60 days after each 

17 monthly deadline for submission of data by mortgage 

18 servicers and lender participating in the program, the 

19 Treasury shall make all data tables available to the public 

20 at the individual record level. This data shall include but 

21 not be limited to— 

22 (1) higher risk loans, including loans made in 

23 connection with any program to provide expanded 

24 loan approvals, shall be reported separately; 

25 (2) disclose— 


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1 (A) the rate or pace at which such mort2 gages are becoming seriously delinquent; 

3 (B) whether such rate or pace is increasing 

4 or decreasing; 

5 (C) if there are certain subsets within the 

6 loans covered by this section that have greater 

7 or lesser rates or paces of delinquency; and 

8 (D) if such subsets exist, the characteris9 tics of such subset of mortgages; 

10 (3) with respect to the loss mitigation efforts of 

11 the loan— 

12 (A) the processes and practices that the re13 porter has in effect to minimize losses on mort14 gages covered by this section; and 

15 (B) the manner and methods by which 

16 such processes and practices are being mon17 itored for effectiveness; 

18 (4) disclose, with respect to loans that are or 

19 become 60 or more days past due, (provided that for 

20 purposes of disclosure under this paragraph that 

21 each loan should have a unique number that is not 

22 the same as any loan number the borrower, origi23 nator, or servicer uses), the following attributes— 

24 (A) the original loan amount; 

25 (B) the current loan amount; 


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1 (C) the loan-to-value ratio and combined 

2 loan-to-value ratio, both at origination and cur3 rently, and the number of liens on the property; 

4 (D) the property valuation at the time of 

5 origination of the loan, and all subsequent prop6 erty valuations and the date of each valuation; 

7 (E) each relevant credit score of each bor8 rower obtained at any time in connection with 

9 the loan, with the date of the credit score, to 

10 the extent allowed by existing law; 

11 (F) whether the loan has any mortgage or 

12 other credit insurance or guarantee; 

13 (G) the current interest rate on such loan; 

14 (H) any rate caps and floors if the loan is 

15 an adjustable rate mortgage loan; 

16 (I) the adjustable rate mortgage index or 

17 indices for such loan; 

18 (J) whether the loan is currently past due, 

19 and if so how many days such loan is past due; 

20 (K) the total number of days the loan has 

21 been past due at any time; 

22 (L) whether the loan is subject to a balloon 

23 payment; 

24 (M) the date of each modification of the 

25 loan; 


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1 (N) whether any amounts of loan principal 

2 has been deferred or written off, and if so, the 

3 date and amount of each deferral and the date 

4 and amount of each writedown; 

5 (O) whether the interest rate was changed 

6 from a rate that could adjust to a fixed rate, 

7 and if so, the period of time for which the rate 

8 will be fixed; 

9 (P) the amount by which the interest rate 

10 on the loan was reduced, and for what period 

11 of time it was reduced; 

12 (Q) if the interest rate was reduced or 

13 fixed for a period of time less than the remain14 ing loan term, on what dates, and to what 

15 rates, could the rate potentially increase in the 

16 future; 

17 (R) whether the loan term was modified, 

18 and if so, whether it was extended or shortened, 

19 and by what amount of time; 

20 (S) whether the loan is in the process of 

21 foreclosure or similar procedure, whether judi22 cial or otherwise; and 

23 (T) whether a foreclosure or similar proce24 dure, whether judicial or otherwise, has been 

25 completed. 


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1 (c) GUIDELINES AND REGULATIONS.—The Secretary 

2 of the Treasury shall establish guidelines and regulations 

3 necessary— 

4 (1) to ensure that the privacy of individual con5 sumers is appropriately protected in the reports 

6 under this section; 

7 (2) to make the data reported under this sub8 section available on a public Web site with no cost 

9 to access the data, in a consistent format; 

10 (3) to update the data no less frequently than 

11 monthly; 

12 (4) to establish procedures for disclosing such 

13 data to the public on a public Web site with no cost 

14 to access the data; and 

15 (5) to allow the Secretary to make such dele16 tions as the Secretary may determine to be appro17 priate to protect any privacy interest of any loan 

18 modification applicant, including the deletion or al19 teration of the applicant’s name and identification 

20 number. 

21 (d) EXCEPTION.—No data shall have to be disclosed 

22 if it voids or violates existing contracts between the Sec23 retary of Treasury and mortgage servicers as part of the 

24 Making Home Affordable Program. 

Æ 


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