I 

111TH CONGRESS 

2D SESSION H. R. 5028 

To allow homeowners of moderate-value homes who are subject to mortgage 

foreclosure proceedings to remain in their homes as renters. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 15, 2010 

Mr. GRIJALVA (for himself and Ms. KAPTUR) introduced the following bill; 

which was referred to the Committee on Financial Services 

A BILL 

To allow homeowners of moderate-value homes who are subject to mortgage foreclosure proceedings to remain in 

their homes as renters. 

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 ‘‘Right to Rent Act of 

5 2010’’. 

6 SEC. 2. RIGHT TO RENT HOME SUBJECT TO FORECLOSURE. 

7 (a) EXERCISE OF RIGHT.—If, at any time after no8 tice under subsection (b) for an eligible mortgage is pro9 vided to the eligible mortgagor and before the commence10 ment of the 7-day period that ends on the first date that 


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1 the foreclosing creditor may first commence or execute 

2 such foreclosure pursuant to such notice, the eligible mort3 gagor under the eligible mortgage that is subject to such 

4 foreclosure provides notice in accordance with section 3, 

5 notwithstanding such foreclosure or any other interests in 

6 the property, the eligible mortgagor may, at the sole op7 tion of the eligible mortgagor, continue to occupy the fore8 closed property during the 5-year period that begins upon 

9 the commencement of such occupancy, subject to the re10 quirements of subsection (c). 

11 (b) LIMITATION ON TIMING OF FORECLOSURE; NO12 TICE OF DEFAULT AND RIGHT TO RENT.—Notwith13 standing any other provision of law or any contract, a 

14 foreclosure of an eligible mortgage may not be commenced 

15 or executed before the expiration of the 25-day period (not 

16 including Saturdays, Sundays, and legal public holidays) 

17 beginning upon the receipt, by the eligible mortgagor, of 

18 written notice provided by the foreclosing creditor for the 

19 mortgage that— 

20 (1) clearly states that— 

21 (A) the eligible mortgagor is in default on 

22 the mortgage; and 

23 (B) foreclosure on the mortgage may or 

24 will be commenced on account of such default; 


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1 (2) clearly states that the eligible mortgagor 

2 has the right, notwithstanding foreclosure, to con3 tinue to occupy the foreclosed property in accord4 ance with this Act, and sets forth the terms of such 

5 occupancy under subsections (a) and (c); and 

6 (3) clearly identifies the first date, pursuant to 

7 this section and any other provisions of law and con8 tract, that such foreclosure may be commenced. 

9 (c) TERMS OF PERIODIC TENANCY.—Occupancy, by 

10 an eligible mortgagor, of a foreclosed property pursuant 

11 to subsection (a) shall be under a periodic month-to-month 

12 tenancy under which the owner of the property may termi13 nate the tenancy for material breach but shall have no 

14 authority, at will, to terminate the tenancy during the oc15 cupancy pursuant to subsection (a) if the mortgagor— 

16 (1) timely pays to the owner of the foreclosed 

17 property rent on a monthly basis in the amount of 

18 the fair market rent for the property determined in 

19 accordance with section 4; and 

20 (2) uses property as the principal residence of 

21 the mortgagor. 

22 SEC. 3. REQUIRED NOTICE. 

23 With respect to an eligible mortgage for which notice 

24 under section 2(b) has been provided, notice in accordance 

25 with this section is notice that— 


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1 (1) is made in writing; 

2 (2) is submitted, by a means under which the 

3 act of delivery is recorded, to— 

4 (A) the court having jurisdiction and venue 

5 to conduct the covered foreclosure proceeding 

6 for the eligible mortgage or, in the case of non7 judicial foreclosure, the court in which an ac8 tion is brought pursuant to section 5; and 

9 (B) the foreclosing creditor; and 

10 (3) states that the eligible mortgagor is exer11 cising the authority under section 2(a) to continue 

12 to occupy the foreclosed property. 

13 SEC. 4. DETERMINATION OF FAIR MARKET RENT. 

14 (a) INITIAL DETERMINATION.—For purposes of this 

15 Act, the fair market rent for a foreclosed property involved 

16 in a covered foreclosure proceeding shall be the amount 

17 that is determined by an independent appraiser who is li18 censed or certified, as applicable, to conduct appraisals in 

19 the jurisdiction in which the property is located, who shall 

20 be appointed for such purpose by the court conducting 

21 such proceeding or hearing an action pursuant to section 

22 5. 

23 (b) PERIODIC ADJUSTMENTS.—The fair market rent 

24 determined under subsection (a) for a foreclosed property 

25 shall be adjusted annually to reflect changes in the owners’ 


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1 equivalent rent of primary residence component, for the 

2 appropriate city, region, or class of city, as available, of 

3 the Consumer Price Index for All Urban Consumers of 

4 the Bureau of Labor Statistics of the Department of 

5 Labor. 

6 (c) REDETERMINATION.—If the owner of a foreclosed 

7 property or the eligible mortgagor under the eligible mort8 gage requests the court described in subsection (a) to re9 determine the fair market rent for a foreclosed property 

10 determined pursuant to this section (as such amount may 

11 have been adjusted pursuant to subsection (b)) and agrees 

12 to pay any costs of such redetermination (including costs 

13 of the appraisal involved), the court shall provide for rede14 termination of the fair market rent for the foreclosed 

15 property in the manner provided under subsection (a), ex16 cept that no such redetermination shall be made pursuant 

17 to a request under this subsection made before the expira18 tion of the 12-month period beginning upon the most re19 cent redetermination conducted at the request of the same 

20 party. 

21 SEC. 5. NONJUDICIAL FORECLOSURE PROCEEDINGS. 

22 In the case of any covered foreclosure proceeding that 

23 is not conducted or administered by a court, the eligible 

24 mortgagor may bring an action in an appropriate court 

25 of the State in which the foreclosed property is located 


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1 for a determination of fair market rent for the foreclosed 

2 property for purposes of this Act, by filing notice in ac3 cordance with section 3 with such court and otherwise 

4 complying with the rules of such court. 

5 SEC. 6. NO BAR TO FORECLOSURE. 

6 This Act may not be construed to delay, or otherwise 

7 modify, affect, or alter any right of a creditor under an 

8 eligible mortgage to foreclose on the mortgage and to sell 

9 the foreclosed property in connection with such fore10 closure, except that the right of any owner of the property 

11 to possession of the property shall be subject to the lease12 hold interest established pursuant to section 2(c). 

13 SEC. 7. RIGHT TO REINSTATEMENT. 

14 This Act may not be construed to affect any right 

15 of any eligible mortgagor to reinstatement of an eligible 

16 mortgage, including any right established under contract 

17 or State law. 

18 SEC. 8. JURISDICTION OF FEDERAL COURTS. 

19 At the option of the eligible mortgagor, a proceeding 

20 under section 4 or 5 shall be removed to the appropriate 

21 district court of the United States in accordance with sec22 tion 1441 of title 28, United States Code. 

23 SEC. 9. EFFECT ON STATE LAW. 

24 (a) FORECLOSURE LAWS.—This Act does not annul, 

25 alter, affect, or exempt any person subject to the proviVerDate Nov 24 2008 22:55 Apr 16, 2010 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5028.IH H5028

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1 sions of this Act from complying with the laws of any 

2 State regarding foreclosure on residential properties, ex3 cept to the extent that such laws are inconsistent with any 

4 provision of this Act, and then only to the extent of such 

5 inconsistency. 

6 (b) LANDLORD-TENANT LAWS.—Nothing in this Act 

7 may be construed to not annul, alter, affect, or exempt 

8 any such tenancy created pursuant to section 2(c) from 

9 any applicable State or local laws regarding the rights or 

10 responsibilities of landlords or tenants. 

11 SEC. 10. OVERSIGHT BY HUD. 

12 The Secretary of Housing and Urban Development 

13 shall— 

14 (1) monitor compliance with the requirements 

15 under this Act; 

16 (2) make available, and provide, appropriate as17 sistance to eligible mortgagors in exercising their 

18 rights under this Act; 

19 (3) conduct outreach activities appropriate to 

20 inform eligible mortgagors of the provisions of this 

21 Act; and 

22 (4) submit to the Congress, not less than annu23 ally, reports describing the implementation of this 

24 Act, the extent to which this Act is utilized by eligiVerDate Nov 24 2008 22:55 Apr 16, 2010 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5028.IH H5028

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1 ble mortgagors, and any issues regarding such im2 plementation or utilization. 

3 SEC. 11. DEFINITIONS. 

4 For purposes of this Act, the following definitions 

5 apply: 

6 (1) COVERED FORECLOSURE PROCEEDING.— 

7 The term ‘‘covered foreclosure proceeding’’ means a 

8 foreclosure proceeding with respect to an eligible 

9 mortgage, and includes any foreclosure proceeding 

10 authorized under the law of the applicable State, in11 cluding judicial and non-judicial foreclosure pro12 ceedings. 

13 (2) ELIGIBLE MORTGAGOR.—The term ‘‘eligible 

14 mortgagor’’ means a mortgagor under an eligible 

15 mortgage. 

16 (3) ELIGIBLE MORTGAGE.—The term ‘‘eligible 

17 mortgage’’ means a first or subordinate mortgage— 

18 (A) on a property that— 

19 (i) is a single family property; 

20 (ii) has been used as the principal res21 idence of the eligible mortgagor for a pe22 riod of not less than 2 years immediately 

23 preceding the initiation of the covered fore24 closure proceeding involved; and 


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1 (iii) had a purchase price, at the time 

2 purchased by the eligible mortgagor, that 

3 is less than the median purchase price for 

4 residences that are located in— 

5 (I) the same metropolitan statis6 tical area; or 

7 (II) if the property is not located 

8 in a metropolitan statistical area or 

9 information for the area is not avail10 able, the same State; and 

11 (B) that was originated before July 1, 

12 2007. 

13 For purposes of subparagraph (A)(iii), the median 

14 purchase price of residences located within a metro15 politan area or State shall be determined according 

16 to information collected and made available by the 

17 National Association of Realtors for such area or 

18 State for the most recently completed month for 

19 which such information is available. 

20 (4) FORECLOSED PROPERTY.—The term ‘‘fore21 closed property’’ means, with respect to a covered 

22 foreclosure proceeding, the single family property 

23 that is subject to the eligible mortgage being fore24 closed under the proceeding. 


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1 (5) FORECLOSING CREDITOR.—The term ‘‘fore2 closing creditor’’ means, with respect to a covered 

3 foreclosure proceeding, the creditor that is fore4 closing the eligible mortgage through such pro5 ceeding. 

6 (6) OWNER.—The term ‘‘owner’’ means, with 

7 respect to a foreclosed property, the person who has 

8 title to the property pursuant to the foreclosure pro9 ceeding for the property, and any successor or as10 sign of such person. 

11 (7) SINGLE FAMILY PROPERTY.—The term 

12 ‘‘single family property’’ means— 

13 (A) a structure consisting of 1 to 4 dwell14 ing units; 

15 (B) a dwelling unit in a multi-unit condo16 minium property together with an undivided in17 terest in the common areas and facilities serv18 ing the property; or 

19 (C) a dwelling unit in a multi-unit project 

20 for which purchase of stock or a membership 

21 interest entitles the purchaser to permanent oc22 cupancy of that unit. 

23 SEC. 12. APPLICABILITY AND SUNSET. 

24 (a) APPLICABILITY.—Subject to subsection (b), this 

25 Act shall apply to any covered foreclosure proceeding that 


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1 has not been finally adjudicated as of the date of the en2 actment of this Act. 

3 (b) SUNSET.—This Act shall not apply to any fore4 closure proceeding commenced after the expiration of the 

5 5-year period beginning on the date of the enactment of 

6 this Act. 

Æ 


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