I 

113TH CONGRESS 

2D SESSION H. R. 5553 

To provide access to information and loan modifications for successors in 

interest, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 18, 2014 

Mrs. BEATTY (for herself and Mr. HECK of Washington) introduced the 

following bill; which was referred to the Committee on Financial Services 

A BILL 

To provide access to information and loan modifications for 

successors in interest, 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 ‘‘Preventing Improper 

5 Foreclosures Act of 2014’’. 

6 SEC. 2. ACCESS TO INFORMATION AND LOAN MODIFICA7 TIONS. 

8 Section 341 of the Garn-St Germain Depository In9 stitutions Act of 1982 (12 U.S.C. 1701j–3) is amended 

10 by adding at the end the following: 


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1 ‘‘(h) ACCESS TO INFORMATION AND LOAN MODI2 FICATIONS.— 

3 ‘‘(1) IN GENERAL.—In the case of a transfer 

4 described under paragraph (3), (5), (6), (7), (8), or 

5 (9) of subsection (d), a lender shall— 

6 ‘‘(A) provide the successor homeowner with 

7 information about the mortgage loan, including 

8 the outstanding amount due, monthly payment, 

9 if any, and available loan modification options; 

10 and 

11 ‘‘(B) with respect to a transfer involving a 

12 real property loan other than a reverse mort13 gage— 

14 ‘‘(i) promptly evaluate the successor 

15 homeowner for a loan modification on the 

16 same terms as if the successor homeowner 

17 had been the original borrower and mort18 gagor; and 

19 ‘‘(ii) perform such evaluation and 

20 offer any available loss mitigation prior to 

21 any assumption of the obligations under 

22 the note. 

23 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

24 this subsection shall be construed to— 


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1 ‘‘(A) limit or interfere with the inde2 pendent rights of a successor homeowner to as3 sume a mortgage under State law; or 

4 ‘‘(B) empower a lender to place any re5 strictions on the right of successor homeowners 

6 protected by subsection (d) to assume a mort7 gage. 

8 ‘‘(3) DEFENSE IN FORECLOSURE.—If a lender 

9 fails to comply with paragraph (1), such failure may 

10 be asserted as a defense to any judicial or non-judi11 cial foreclosure. 

12 ‘‘(4) RECOVERY OF STATUTORY DAMAGES, AC13 TUAL DAMAGES, AND COSTS.—In any successful ac14 tion brought by a successor homeowner under this 

15 subsection, the homeowner shall be entitled to re16 cover statutory damages not to exceed $1,000 per 

17 violation, actual damages, costs, and attorneys 

18 fees.’’. 

19 SEC. 3. PROTECTION OF HOME EQUITY CONVERSION 

20 MORTGAGORS. 

21 (a) SAFEGUARD TO PREVENT DISPLACEMENT OF

22 HOMEOWNER.—Subsection (j) of section 255 of the Na23 tional Housing Act (12 U.S.C. 1715z–20(j)) is amended— 

24 (1) in the first sentence by striking ‘‘the home25 owner’s obligation to satisfy the loan obligation is 


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1 deferred until the homeowner’s death’’ and inserting 

2 ‘‘maturity of the loan obligation is deferred until the 

3 death of the homeowner and the homeowner’s 

4 spouse, the permanent relocation of the homeowner 

5 and the homeowner’s spouse’’; and 

6 (2) by striking the second sentence. 

7 (b) SALE TERMS OF ELIGIBLE MORTGAGES.—Para8 graph (7) of section 255(d) of the National Housing Act 

9 (12 U.S.C. 1715z–20(d)(7)) is amended— 

10 (1) by redesignating subparagraphs (A) and 

11 (B) as clauses (i) and (ii), respectively, and realign12 ing such subparagraphs, as so redesignated, so as to 

13 be indented 6 ems from the left margin; and 

14 (2) by striking the matter that precedes clause 

15 (i) (as so redesignated by paragraph (1) of this sub16 section) and inserting the following: 

17 ‘‘(7)(A) provide that— 

18 ‘‘(i) the mortgagor may sell the dwelling 

19 that is subject to the mortgage for at least the 

20 lesser of the remaining balance on the mortgage 

21 or the appraised value of such dwelling; 

22 ‘‘(ii) if the loan is due and payable, the 

23 mortgagor may sell the dwelling that is subject 

24 to the mortgage for the lesser of the remaining 

25 balance on the mortgage or the amount that is 


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1 equal to 5 percent less than the appraised value 

2 of such dwelling; and 

3 ‘‘(iii) upon the death of the mortgagor, the 

4 estate or heirs of the mortgagor may satisfy the 

5 loan obligation by paying the lesser of the re6 maining balance on the mortgage or the 

7 amount that is equal to 5 percent less than the 

8 appraised value of the dwelling that is subject 

9 to the mortgage; and 

10 ‘‘(B) provide that the mortgagor, the estate of 

11 the mortgagor, or the heirs of the mortgagor shall 

12 not be liable for any difference between the amount 

13 of indebtedness under the mortgage and the amount 

14 recovered by the mortgagee from—’’. 

Æ 


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