II 

113TH CONGRESS 

1ST SESSION S. 361 

To require the lender or servicer of a home mortgage, upon a request by 

the homeowner for a short sale, to make a prompt decision whether 

to allow the sale. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 14, 2013 

Ms. MURKOWSKI (for herself, Mr. BROWN, Mr. ENZI, Mr. MENENDEZ, Mr. 

REED, and Mr. MERKLEY) introduced the following bill; which was read 

twice and referred to the Committee on Banking, Housing, and Urban 

Affairs 

A BILL 

To require the lender or servicer of a home mortgage, upon 

a request by the homeowner for a short sale, to make 

a prompt decision whether to allow the sale. 

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 ‘‘Prompt Notification 

5 of Short Sales Act’’. 

6 SEC. 2. DEFINITIONS. 

7 For purposes of this Act, the following definitions 

8 shall apply: 

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1 (a) RESIDENTIAL MORTGAGE LOAN.—The term 

2 ‘‘residential mortgage loan’’ means any consumer credit 

3 transaction that is secured by a mortgage, deed of trust, 

4 or other equivalent consensual security interest on a dwell5 ing or on residential real property that includes a dwelling, 

6 other than a consumer credit transaction under an open 

7 end credit plan or an extension of credit relating to a plan 

8 described in section 101(53D) of title 11, United States 

9 Code. 

10 (b) SECURITIZATION VEHICLE.—The term 

11 ‘‘securitization vehicle’’ means a trust, special purpose en12 tity, or other legal structure that is used to facilitate the 

13 issuing of securities, participation certificates, or similar 

14 instruments backed by or referring to a pool of assets that 

15 includes residential mortgage loans (or instruments that 

16 are related to residential mortgage loans, such as credit17 linked notes). 

18 (c) SERVICER.—The term ‘‘servicer’’ has the same 

19 meaning as in section 129A of the Truth in Lending Act 

20 (15 U.S.C. 1639a), as so designated by section 1402(a)(1) 

21 of Public Law 111–203, except that such term includes 

22 a person who makes or holds a residential mortgage loan 

23 (including a pool of residential mortgage loans), if such 

24 person also services the loan. 

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1 (d) SHORT SALE.—The term ‘‘short sale’’ means the 

2 sale of the dwelling or residential real property that is sub3 ject to the mortgage, deed or trust, or other security inter4 est that secures a residential mortgage loan that— 

5 (1) will result in proceeds in an amount that is 

6 less than the remaining amount due under the mort7 gage loan; and 

8 (2) requires authorization by the securitization 

9 vehicle or other investment vehicle or holder of the 

10 mortgage loan, or the servicer acting on behalf of 

11 such a vehicle or holder. 

12 SEC. 3. PROMPT NOTIFICATIONS AND DECISION REGARD13 ING SHORT SALE. 

14 (a) REQUIREMENT FOR PROMPT NOTIFICATIONS, 

15 DECISIONS.— 

16 (1) NOTIFICATIONS.— 

17 (A) IN GENERAL.—Each servicer shall pro18 vide in writing to a mortgagor of a residential 

19 mortgage loan— 

20 (i) an acknowledgment of receipt of a 

21 written request of the mortgagor, not later 

22 than 3 days after the date of such receipt; 

23 (ii) a notice of any missing or incom24 plete information required with respect to 

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1 such request, not later than 5 days after 

2 the date of such receipt; and 

3 (iii) a definitive response to such re4 quest approving or denying such request, 

5 not later than 30 days after the date of 

6 such receipt. 

7 (B) EXCEPTIONAL CIRCUMSTANCES.—In 

8 any case in which a servicer is unable to provide 

9 a decision with respect to a written request of 

10 a mortgagor of a residential mortgage loan dur11 ing the 30-day period required by subparagraph 

12 (A), such period may be extended to not later 

13 than 60 days after the date of receipt of a com14 pleted application, except that the servicer shall, 

15 verbally or in writing— 

16 (i) notify the mortgagor during the 

17 initial 30-day period that the application is 

18 still under review; and 

19 (ii) each week thereafter provide to 

20 the mortgagor a status update indicating 

21 the reasons why a decision is pending be22 yond the required 30-day period. 

23 (C) APPLICABILITY.—Subparagraph (A) 

24 shall apply, except as provided in subsection 

25 (b), and notwithstanding any other provision of 

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1 law or of any contract, including a contract be2 tween a servicer of a residential mortgage loan 

3 and a securitization vehicle or other investment 

4 vehicle. 

5 (D) CONTENT.—A written response by a 

6 servicer under subparagraph (A) shall specify a 

7 decision on whether such request has been de8 nied, approved, or that such request has been 

9 approved subject to specified changes. 

10 (2) MORTGAGOR SUBMISSION.—Paragraph (1) 

11 shall apply in any case in which the mortgagor 

12 under a residential mortgage loan submits to the 

13 servicer thereof— 

14 (A) a written offer for a short sale of the 

15 dwelling or residential real property that is sub16 ject to the mortgage, deed of trust, or other se17 curity interest that secures the mortgage loan; 

18 and 

19 (B) all information required by the servicer 

20 in connection with such a request (including a 

21 copy of an executed contract between the owner 

22 of the dwelling or property and the prospective 

23 buyer that is subject to approval by the 

24 servicer). 

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1 (3) CIVIL ACTIONS AUTHORIZED.—An ag2 grieved individual may bring an action in a court of 

3 competent jurisdiction, asserting a violation of this 

4 Act. Aggrieved individuals may be awarded all ap5 propriate relief, including equitable relief, and a 

6 monetary award of $1,000 per violation, plus reason7 able attorneys’ fees, or such higher amount as may 

8 be appropriate in the case of an established pattern 

9 or practice of such failures. 

10 (b) INAPPLICABILITY TO CERTAIN EXISTING MORT11 GAGES.—Subsection (a) shall not apply with respect to 

12 any residential mortgage with respect to which the mort13 gagor and the mortgagee or servicer have entered into a 

14 written agreement before the date of enactment of this Act 

15 explicitly providing a procedure or terms for approval of 

16 a short sale. 

17 (c) TREATMENT OF OTHER TIME LIMITS.—This sec18 tion may not be construed to preempt, annul, or otherwise 

19 affect any other provision of law or of any contract or pro20 gram that provides a shorter period than is provided under 

21 subsection (a) for a decision by the servicer of a residential 

22 mortgage loan regarding a short sale of the dwelling or 

23 residential real property that is subject to the mortgage, 

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1 deed or trust, or other security interest that secures the 

2 mortgage loan. 

Æ 

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