II 

110TH CONGRESS 

2D SESSION S. 3686 

To establish an Office of Foreclosure Evaluation to coordinate the responsibilities of the Department of the Treasury, the Department of Housing 

and Urban Development, the Federal Housing Administration, the Federal Housing Finance Agency, the Neighborhood Reinvestment Corporation, the Federal Deposit Insurance Corporation, the Board of Governors 

of the Federal Reserve System, and other Federal Government entities 

regarding foreclosure prevention, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 17 (legislative day, SEPTEMBER 17), 2008 

Mr. SPECTER introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To establish an Office of Foreclosure Evaluation to coordinate the responsibilities of the Department of the Treasury, the Department of Housing and Urban Development, the Federal Housing Administration, the Federal 

Housing Finance Agency, the Neighborhood Reinvestment Corporation, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve 

System, and other Federal Government entities regarding 

foreclosure prevention, 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, 


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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Foreclosure Diversion and Residential Mortgage Loan 

4 Modification Act’’. 

5 (b) TABLE OF CONTENTS.—The table of contents for 

6 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings. 

Sec. 3. Office of Foreclosure Evaluation. 

Sec. 4. Working group on foreclosure prevention. 

Sec. 5. Authorization of appropriations. 

Sec. 6. Definitions. 

Sec. 7. Modification of existing programs to prevent foreclosure. 

Sec. 8. Sunset. 

7 SEC. 2. FINDINGS. 

8 Congress finds that— 

9 (1) for the second quarter of 2008, foreclosure 

10 filings nationwide had increased 121 percent over 

11 the second quarter of 2007, and in the same time 

12 period, nearly 250,000 properties were foreclosed; 

13 (2) in both the prime and subprime markets, 

14 seriously delinquent residential mortgage loans have 

15 been rising at an alarming rate, increasing 3-fold 

16 since early 2006; 

17 (3) the number of adjustable rate mortgages 

18 that are seriously delinquent has more than quad19 rupled since early 2006, and nationwide, it is esti20 mated that 2,200,000 families with subprime mort21 gage loans have lost or will lose their homes to fore22 closure over the next several years; 


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1 (4) renters suffer as well, as they may be evict2 ed from foreclosed homes with little or no notice, de3 spite being up to date on rent payments; 

4 (5) neighborhoods are deteriorating as fore5 closed homes are left vacant, depressing neighboring 

6 property values, and leading to higher crime rates; 

7 (6) crafting affordable and sustainable loan 

8 modifications for distressed homeowners is labor in9 tensive; 

10 (7) securitization has brought many benefits 

11 but also leads to greater complexity in finding solu12 tions; 

13 (8) under many mortgage pooling and servicing 

14 agreements, additional labor costs incurred by 

15 servicers who engage in the modification process are 

16 not compensated by the loan owner, but servicers 

17 are paid a fee to foreclose on a homeowner, and 

18 servicers may be permitted to retain ancillary fees, 

19 such as late fees and loan collection fees; 

20 (9) under such a cost and incentive structure, 

21 servicers may continue to push homeowners into less 

22 labor intensive repayment plans, often with higher 

23 monthly payment obligations, or towards foreclosure; 

24 (10) despite widespread efforts since early 2007 

25 to encourage voluntary residential mortgage loan 


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1 modifications, the pace of affordable and sustainable 

2 modifications has not been sufficient to achieve the 

3 scale necessary to contain broad harm to commu4 nities and the economy; 

5 (11) there is a need to focus more Federal re6 sources on foreclosure prevention efforts, including 

7 court supervised mediation programs, that have 

8 proven to be effective and that are handled on a 

9 mortgage-by-mortgage basis; and 

10 (12) to prevent foreclosures where avoidable, 

11 there is a need to ensure that— 

12 (A) there are substantive communications 

13 between servicers and homeowners, that 

14 servicers have authority to answer questions 

15 and resolve issues related to loss mitigation ac16 tivities, and that servicers and loan owners con17 sider or offer reasonable loss mitigation, pri18 marily through reduction in monthly payments 

19 by lowering interest rates or extending the pay20 ment period prior to foreclosure; and 

21 (B) homeowners are responding to 

22 servicers’ communications, meeting with feder23 ally certified housing counselors and trained pro 

24 bono attorneys, and availing themselves of State 


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1 and local housing finance and foreclosure pre2 vention programs. 

3 SEC. 3. OFFICE OF FORECLOSURE EVALUATION. 

4 (a) ESTABLISHMENT OF OFFICE.—Section 109 of 

5 the Emergency Economic Stabilization Act of 2008 (divi6 sion A of Public Law 110–343) is amended by adding at 

7 the end the following new subsection: 

8 ‘‘(d) OFFICE OF FORECLOSURE EVALUATION.— 

9 ‘‘(1) ESTABLISHMENT.—There is established, 

10 in the Office of Domestic Finance of the Depart11 ment of the Treasury, the Office of Foreclosure 

12 Evaluation (hereafter in this section referred to as 

13 the ‘Office’). 

14 ‘‘(2) DIRECTOR.— 

15 ‘‘(A) IN GENERAL.—The Office shall be 

16 headed by the Director of Foreclosure Evalua17 tion (hereafter in this section referred to as the 

18 ‘Director’), who shall be an Assistant Secretary 

19 of the Treasury, appointed by the President, by 

20 and with the advice and consent of the Senate, 

21 except that an interim Assistant Secretary may 

22 be appointed by the Secretary notwithstanding 

23 such advice and consent. 

24 ‘‘(B) APPOINTMENT.—The Director shall 

25 be appointed from among individuals who are 


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1 citizens of the United States, have a dem2 onstrated understanding of financial manage3 ment or oversight, and have a demonstrated un4 derstanding of mortgage securities markets and 

5 housing finance. 

6 ‘‘(3) FUNCTIONS OF THE DIRECTOR.— 

7 ‘‘(A) IN GENERAL.—The Director shall 

8 have ultimate responsibility within the Depart9 ment of the Treasury, except for the Secretary, 

10 for all activities and matters relating to fore11 closure evaluation and prevention, including— 

12 ‘‘(i) research, grant administration, 

13 public outreach, and policy development re14 lating to foreclosure prevention; and 

15 ‘‘(ii) establishment, coordination, and 

16 administration of requirements, standards, 

17 and performance measures under programs 

18 and laws administered by the Department 

19 of the Treasury that relate to housing fore20 closure prevention. 

21 ‘‘(B) OTHER SPECIFIC FUNCTIONS.—The 

22 Director shall carry out the functions assigned 

23 to the Director and the Office under this sub24 section and any other provisions of law, includ25 ing— 


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1 ‘‘(i) serving as the Chairperson of the 

2 Working Group on Foreclosure Prevention 

3 established under subsection (e); 

4 ‘‘(ii) coordinating the responsibilities 

5 of the Department of the Treasury, the 

6 Department of Housing and Urban Devel7 opment, the Federal Housing Administra8 tion, the Federal Housing Finance Agency, 

9 the Neighborhood Reinvestment Corpora10 tion, the Federal Deposit Insurance Cor11 poration, the Board of Governors of the 

12 Federal Reserve System, and other Federal 

13 Government entities regarding foreclosure 

14 prevention; 

15 ‘‘(iii) collaborating in foreclosure pre16 vention efforts with State and local govern17 ment agencies, State and local courts, com18 munity based nonprofit organizations and 

19 counselors with expertise in the field of 

20 housing counseling, and State and local 

21 bar associations; 

22 ‘‘(iv) certifying qualified foreclosure 

23 prevention programs, as provided in para24 graph (4); 


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1 ‘‘(v) responding to inquiries and ren2 dering opinions as to the reasonableness of 

3 the foreclosure mitigation actions of 

4 servicers, as provided in paragraph (5); 

5 ‘‘(vi) conducting the National Public 

6 Service Multimedia Campaign To Promote 

7 Foreclosure Prevention Programs created 

8 under paragraph (6); 

9 ‘‘(vii) working with and gathering 

10 data from the mortgage and real estate in11 dustries to ensure that servicers are engag12 ing in reasonable mitigation and fore13 closure prevention actions; 

14 ‘‘(viii) encouraging servicers to use 

15 technology that would standardize the in16 come to expense and loan resolution proc17 ess; and 

18 ‘‘(ix) considering payment of incen19 tives to servicers for modifications com20 pleted within certain periods of time. 

21 ‘‘(4) CERTIFICATION AND PROMOTION OF

22 FORECLOSURE PREVENTION PROGRAMS.— 

23 ‘‘(A) REQUIREMENT FOR ASSISTANCE.— 

24 An organization may not receive assistance for 

25 foreclosure preventions programs under this 


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1 subsection, unless the organization has been 

2 certified by the Office for such purpose, in ac3 cordance with this paragraph. 

4 ‘‘(B) STANDARDS AND PROCEDURES.—The 

5 Director shall, by regulation, establish stand6 ards and procedures for the certification of 

7 foreclosure prevention programs, which shall re8 quire that any such program involves, at a min9 imum— 

10 ‘‘(i) efforts to identify, contact, and 

11 provide counseling to homeowners facing 

12 foreclosure or at significant risk of fore13 closure; 

14 ‘‘(ii) efforts to facilitate conciliation, 

15 mediation, or negotiation between home16 owners and servicers at minimal or no ad17 ditional cost to homeowners; and 

18 ‘‘(iii) performance measures to docu19 ment or demonstrate the success of the 

20 program in preventing or mitigating fore21 closures. 

22 ‘‘(C) PROMOTION OF CONCILIATION AND

23 MEDIATION.—The Director shall, in jurisdic24 tions with judicial foreclosure laws— 


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1 ‘‘(i) promote the adoption of fore2 closure prevention programs that require 

3 court supervised conciliation or mediation 

4 conferences between lenders or servicers or 

5 their legal representatives and homeowners 

6 or borrows or their legal representatives; 

7 and 

8 ‘‘(ii) promote the use of pro bono legal 

9 counsel to represent homeowners or bor10 rowers in such conciliation or mediation 

11 conferences. 

12 ‘‘(D) CONSISTENCY WITH EXISTING PRO13 GRAMS.—The certification standards and proce14 dures established under this paragraph shall, to 

15 the extent practical, be consistent with the cer16 tification procedures for housing counselors 

17 under section 106(e) of the Housing and Urban 

18 Development Act of 1968 (12 U.S.C. 1701x(e)). 

19 ‘‘(E) CONSULTATION WITH WORKING

20 GROUP.—The certification standards and proce21 dures established under this paragraph shall be 

22 developed in consultation with the Working 

23 Group established under subsection (e). 

24 ‘‘(F) GRANTS.—The Director, in consulta25 tion with the Working Group, shall identify and 


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1 promote Federal grant opportunities for cer2 tified foreclosure prevention programs. To the 

3 extent necessary to establish or build the capac4 ity of certified foreclosure prevention programs, 

5 the Director may award grants directly to such 

6 programs. 

7 ‘‘(5) ADMINISTRATIVE PREREQUISITES RE8 LATED TO CLAIMS BASED ON RESIDENTIAL MORT9 GAGE LOAN MODIFICATIONS.— 

10 ‘‘(A) IN GENERAL.— 

11 ‘‘(i) LIMITATION.—No civil action or 

12 complaint to recover damages resulting 

13 from a case-by-case residential mortgage 

14 loan modification or loss mitigation action, 

15 including delaying foreclosure, changing 

16 the interest rate on a prospective basis, 

17 capitalizing arrearages, extending the ma18 turity date, extending the time for pay19 ment, accepting partial payments, or par20 tially discharging principal, occurring from 

21 January 1, 2008 through January 1, 

22 2010, and allegedly in violation of a pool23 ing and servicing agreement, or equivalent 

24 claims, whether in tort or in contract, shall 

25 be filed unless the attorney or party filing 


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1 the action has made a reasonable inquiry 

2 with the Office to determine that there are 

3 grounds for a good faith belief that the 

4 servicer has failed to comply with the duty 

5 described in section 119(b). 

6 ‘‘(ii) PROCEDURAL REQUIREMENTS.— 

7 With respect to an action or complaint de8 scribed in clause (i)— 

9 ‘‘(I) the complaint or initial 

10 pleading shall contain a certification 

11 by the attorney or party filing the ac12 tion that an inquiry required by 

13 clause (i) has been made and a signed 

14 opinion from the Office that the ac15 tions of the servicer were unreason16 able and inconsistent with accepted 

17 servicing practices, or not permitted 

18 by the restrictions on real estate 

19 mortgage investment conduits under 

20 sections 860A through 860G of the 

21 Internal Revenue Code of 1986; 

22 ‘‘(II) such opinion shall be ad23 missible but not conclusive; and 

24 ‘‘(III) the failure to obtain and 

25 file the written opinion from the OfVerDate Aug 31 2005 00:02 Nov 18, 2008 Jkt 079200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S3686.IS S3686

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1 fice shall be grounds for the dismissal 

2 of the action. 

3 ‘‘(B) LIMITATION ON ENFORCEMENT OF

4 CONTRACT TERMS.—For residential mortgage 

5 loan modification occurring between January 1, 

6 2008 and January 1, 2010, limitations in a 

7 pooling and servicing agreement as to the total 

8 number of loans that may be modified to a 

9 specified percentage are unenforceable, to the 

10 extent that the actual number of loans modified 

11 by the servicer is less than 25 percent of the 

12 total. 

13 ‘‘(C) STATUTE OF LIMITATIONS AND DE14 TERMINATION OF THE DATE ON WHICH A

15 CLAIM ACCRUES.—The date on which the stat16 ute of limitations begins to run on any claim 

17 described in this paragraph shall be the later 

18 of— 

19 ‘‘(i) the date of the issuance of the 

20 opinion of the Office, as required under 

21 subparagraph (A); or 

22 ‘‘(ii) the date on which the cause of 

23 action accrues. 


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1 ‘‘(6) NATIONAL PUBLIC SERVICE MULTIMEDIA

2 CAMPAIGN TO PROMOTE FORECLOSURE PREVENTION

3 PROGRAMS.— 

4 ‘‘(A) IN GENERAL.—The Director shall de5 velop, implement, and conduct a national public 

6 service multimedia campaign designed to make 

7 homeowners facing default or mortgage fore8 closure aware of certified foreclosure prevention 

9 programs. 

10 ‘‘(B) CONTACT INFORMATION.—Each seg11 ment of the multimedia campaign under sub12 paragraph (A) shall publicize the toll-free tele13 phone number and website of State or local pro14 grams that assist homeowners facing default or 

15 foreclosure. 

16 ‘‘(7) EDUCATION PROGRAMS.—The Director 

17 shall provide advice and technical assistance to the 

18 States, units of general local government, and non19 profit organizations regarding the establishment and 

20 operation of foreclosure prevention programs that 

21 assist homeowners in obtaining assistance from 

22 housing counselors certified by the Department of 

23 Housing and Urban Development, community legal 

24 services organizations, pro bono attorneys, and State 

25 court programs that coordinate conciliation conVerDate Aug 31 2005 00:02 Nov 18, 2008 Jkt 079200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S3686.IS S3686

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1 ferences before foreclosures and sheriff sales may 

2 proceed. 

3 ‘‘(8) STUDY AND REPORT BY THE DIRECTOR ON

4 LOSS MITIGATION ACTIVITY.— 

5 ‘‘(A) STUDY REQUIRED.—The Director 

6 shall conduct a study of the barriers to reason7 able and timely residential mortgage loan modi8 fications to prevent foreclosure of home loans, 

9 as well as the success of programs designed to 

10 prevent foreclosures, using as much empirical 

11 data as are available. The study shall include, 

12 among other relevant data, an assessment of 

13 whether the fee structure of typical loan serv14 icing agreements creates a disincentive for 

15 servicers to engage in activities to mitigate or 

16 prevent foreclosure. 

17 ‘‘(B) SUBMISSION TO CONGRESS.—Not 

18 later than— 

19 ‘‘(i) 6 months after the date of enact20 ment of this subsection, the Director shall 

21 submit to Congress a preliminary report 

22 regarding the study required by this para23 graph; and 

24 ‘‘(ii) 12 months after such date of en25 actment, the Director shall submit a final 


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1 report regarding the results of the study, 

2 including any recommendations for legisla3 tion, for best practices, and for processes 

4 to identify and effectively assist home5 owners who can avoid foreclosure. 

6 ‘‘(9) REPORTING BY SERVICERS.— 

7 ‘‘(A) IN GENERAL.—Each servicer that 

8 participates in a certified foreclosure prevention 

9 program shall report regularly, but not less fre10 quently than monthly, to the Director on the 

11 extent and scope of the loss mitigation activities 

12 of the mortgage owner. 

13 ‘‘(B) REPORT CONTENTS.—The report re14 quired by subparagraph (B) shall include— 

15 ‘‘(i) the number of residential mort16 gage loans receiving loss mitigation that 

17 have become performing loans; 

18 ‘‘(ii) the number of residential mort19 gage loans receiving loss mitigation that 

20 have proceeded to foreclosure; 

21 ‘‘(iii) the total number of foreclosures 

22 initiated during the reporting period; 

23 ‘‘(iv) data on loss mitigation activities 

24 disaggregated to reflect whether the loss 

25 mitigation was— 


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1 ‘‘(I) waiver of any late payment 

2 charge, penalty interest, or any other 

3 fees or charges, or any combination 

4 thereof; 

5 ‘‘(II) establishment of a repay6 ment plan under which the home7 owner resumes regularly scheduled 

8 payments and pays additional 

9 amounts at scheduled intervals to cure 

10 the delinquency; 

11 ‘‘(III) forbearance under the loan 

12 that provides for a temporary reduc13 tion in or cessation of monthly pay14 ments followed by a reamortization of 

15 the amounts due under the loan, in16 cluding arrearage, and a new schedule 

17 of repayment amounts; 

18 ‘‘(IV) waiver, modification, or 

19 variation of any material term of the 

20 loan, including short-term, long-term, 

21 or life-of-loan modification that 

22 changes the interest rate, forgives the 

23 payment of principal or interest, or 

24 extends the final maturity date of the 

25 loan; 


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1 ‘‘(V) short refinancing of the 

2 loan consisting of acceptance of pay3 ment from or on behalf of the home4 owner of an amount less than the 

5 amount alleged to be due and owing 

6 under the loan, including principal, in7 terest, and fees, in full satisfaction of 

8 the obligation under such loan and as 

9 part of a refinance transaction in 

10 which the property is intended to re11 main the principal residence of the 

12 homeowner; 

13 ‘‘(VI) acquisition of the property 

14 by the owner or servicer by deed in 

15 lieu of foreclosure; 

16 ‘‘(VII) short sale of the principal 

17 residence that is subject to the lien se18 curing the loan; 

19 ‘‘(VIII) assumption of the home20 owner’s obligation under the loan by a 

21 third party; 

22 ‘‘(IX) cancellation or postpone23 ment of a foreclosure sale to allow the 

24 homeowner additional time to sell the 

25 property; or 


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1 ‘‘(X) any other loss mitigation 

2 activity not covered; and 

3 ‘‘(v) such other information as the Di4 rector determines to be relevant. 

5 ‘‘(10) ADDITIONAL REPORTING REQUIRE6 MENTS.—The Director shall consult with the Sec7 retary of the Treasury and the Secretary of Housing 

8 and Urban Development to amend, as necessary, the 

9 reporting requirements applicable to federally related 

10 mortgage loans to ensure that such reporting re11 quirements capture data necessary for the Director 

12 to satisfy the reporting requirements of this sub13 section.’’. 

14 (b) CLERICAL AMENDMENTS.— 

15 (1) TITLE 5.—Section 5315 of title 5, United 

16 States Code, is amended in the item relating to As17 sistant Secretaries of the Treasury, by striking 

18 ‘‘(10)’’ and inserting ‘‘(11)’’. 

19 (2) TITLE 31.—Section 301(e) of title 31, 

20 United States Code, is amended by striking ‘‘10’’ 

21 and inserting ‘‘11’’. 

22 SEC. 4. WORKING GROUP ON FORECLOSURE PREVENTION. 

23 Section 109 of the Emergency Economic Stabilization 

24 Act of 2008 (division A of Public Law 110–343), as 


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1 amended by this Act, is amended by adding at the end 

2 the following new subsection: 

3 ‘‘(e) WORKING GROUP ON FORECLOSURE PREVEN4 TION.— 

5 ‘‘(1) ESTABLISHMENT.—There is established a 

6 Working Group on Foreclosure Prevention (in this 

7 subsection referred to as the ‘Working Group’). 

8 ‘‘(2) COMPOSITION.—The Working Group shall 

9 be composed of senior representatives of— 

10 ‘‘(A) the Department of the Treasury; 

11 ‘‘(B) the Department of Housing and 

12 Urban Development; 

13 ‘‘(C) the Federal Housing Administration; 

14 ‘‘(D) the Federal Housing Finance Agen15 cy; 

16 ‘‘(E) the Neighborhood Reinvestment Cor17 poration; 

18 ‘‘(F) the Federal Deposit Insurance Cor19 poration; 

20 ‘‘(G) the Board of Governors of the Fed21 eral Reserve System; and 

22 ‘‘(H) such other Federal Government enti23 ties engaged in foreclosure prevention activities 

24 as may be designated by the Chairperson of the 

25 Working Group. 


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1 ‘‘(3) CHAIRPERSON.—The Director of the Of2 fice of Foreclosure Evaluation shall serve as the 

3 Chairperson of the Working Group. 

4 ‘‘(4) PURPOSE AND FUNCTIONS.—The Working 

5 Group shall— 

6 ‘‘(A) improve coordination of Federal Gov7 ernment efforts to prevent foreclosure and per8 mit homeowners to remain in their homes; 

9 ‘‘(B) build the capacity of Federal entities, 

10 as well as State and local entities and nonprofit 

11 organizations to offer housing counseling and 

12 pro bono legal services to homeowners in areas 

13 that lack sufficient services; 

14 ‘‘(C) share information and best practices 

15 concerning foreclosure prevention programs; 

16 and 

17 ‘‘(D) review and provide input regarding 

18 the criteria used by the Chairperson, as the Di19 rector of the Office of Foreclosure Evaluation, 

20 to certify foreclosure prevention programs. 

21 ‘‘(5) ADMINISTRATION.—The Director shall 

22 provide the Working Group with such administrative 

23 and support services as may be necessary for the 

24 performance of the functions of the Working Group. 


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1 ‘‘(6) COOPERATION OF OTHER AGENCIES.—The 

2 heads of executive departments, agencies, and inde3 pendent instrumentalities shall, to the extent per4 mitted by law, provide the Working Group with such 

5 information as the Working Group requires to carry 

6 out this subsection. 

7 ‘‘(7) CONSULTATION.—The Working Group 

8 shall consult, as appropriate, with representatives of 

9 financial institutions, government entities, and non10 profit organizations engaged in foreclosure preven11 tion programs, and representatives of the general 

12 public.’’. 

13 SEC. 5. AUTHORIZATIONS. 

14 Section 109 of the Emergency Economic Stabilization 

15 Act of 2008 (division A of Public Law 110–343), as 

16 amended by this Act, is amended by adding at the end 

17 the following new subsection: 

18 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—The au19 thorization limitations established under section 115(a) 

20 shall be reduced by the amounts necessary to carry out 

21 the education and outreach campaigns and other activities 

22 described in this section.’’. 

23 SEC. 6. DEFINITIONS. 

24 Section 109 of the Emergency Economic Stabilization 

25 Act of 2008 (division A of Public Law 110–343), as 


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1 amended by this Act, is amended by adding at the end 

2 the following new subsection: 

3 ‘‘(g) DEFINITIONS.—As used in this section— 

4 ‘‘(1) the term ‘Federally related mortgage loan’ 

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

6 Estate Settlement Procedure Act of 1974 (12 U.S.C. 

7 2602). 

8 ‘‘(2) the term ‘homeowner’ means a person 

9 who— 

10 ‘‘(A) has resided at the property secured 

11 by a mortgage since the mortgage transaction 

12 was entered into; 

13 ‘‘(B) intends to reside at such property 

14 during the period of the loan; and 

15 ‘‘(C) treats the property as his or her pri16 mary residence; 

17 ‘‘(3) the term ‘residential mortgage loan’ means 

18 any extension of credit primarily for personal, fam19 ily, or household use that is secured by a mortgage, 

20 deed of trust, or other equivalent consensual security 

21 interest on a dwelling (as defined in section 103(v) 

22 of the Truth in Lending Act) or residential real es23 tate on which is constructed or intended to be con24 structed a dwelling (as so defined); and 


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1 ‘‘(4) the term ‘servicer’ has the same meaning 

2 as in section 6(i)(2) of the Real Estate Settlement 

3 Procedures Act of 1974 (12 U.S.C. 2605(i)(2)).’’. 

4 SEC. 7. MODIFICATION OF EXISTING PROGRAMS TO PRE5 VENT FORECLOSURE. 

6 The Housing and Economic Recovery Act or 2008 

7 (Public Law 110–289) is amended— 

8 (1) in section 2301(c)(3) (42 U.S.C. 5301 

9 note)— 

10 (A) in subparagraph (D), by striking 

11 ‘‘and’’ at the end; 

12 (B) in subparagraph (E), by striking the 

13 period at the end and inserting ‘‘; and’’; and 

14 (C) by adding at the end the following: 

15 ‘‘(F) fund State and local mortgage fore16 closure prevention programs that support or re17 quire counseling, conciliation, and mediation 

18 prior to sheriff sale or foreclosure.’’; 

19 (2) in section 1132(c)(1) (12 U.S.C. 1701x 

20 note)— 

21 (A) in subparagraph (A)— 

22 (i) by striking ‘‘or’’ at the end; and 

23 (ii) by inserting ‘‘(1)’’ after ‘‘(e)’’ the 

24 second place it appears; 


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1 (B) in subparagraph (B), by striking the 

2 period at the end and inserting ‘‘; or’’; and 

3 (C) by adding at the end the following: 

4 ‘‘(C) certified by the Office of Foreclosure 

5 Evaluation of the Department of the Treasury, 

6 in accordance with section 109(d)(4) of the 

7 Emergency Economic Stabilization Act of 2008 

8 (Public Law 110–343).’’; and 

9 (3) in the fourth undesignated proviso of sec10 tion 2305 (42 U.S.C. 5301 note), by inserting after 

11 ‘‘civil litigation’’ the following: ‘‘, except with respect 

12 to the representation of a homeowner in foreclosure 

13 litigation’’. 

14 SEC. 8. SUNSET. 

15 (a) IN GENERAL.—Except as provided in subsections 

16 (b) and (c), this Act and the amendments made by this 

17 Act shall cease to have effect on December 31, 2012, and 

18 the Office of Foreclosure Evaluation and the Working 

19 Group on Foreclosure Prevention shall terminate on that 

20 date. 

21 (b) EXCEPTION.—Notwithstanding subsection (a), 

22 the provisions of section 109(d)(5) of the Emergency Eco23 nomic Stabilization Act of 2008 (Public Law 110–343), 

24 regarding administrative prerequisites related to claims 


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1 based on loan modifications, as added by this Act, shall 

2 remain in effect after December 31, 2012. 

3 (c) DISCHARGE OF DUTIES.—After December 31, 

4 2012, the duties and responsibilities assigned to the Direc5 tor of the Office of Foreclosure Evaluation by section 

6 109(d)(5) of the Emergency Economic Stabilization Act 

7 of 2008 (Public Law 110–343), as added by this Act, shall 

8 be discharged by the Under Secretary for Domestic Fi9 nance or an Assistant Secretary of the Treasury des10 ignated for such purpose by the Under Secretary. 

Æ 


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