I 

112TH CONGRESS 

1ST SESSION H. R. 2636 

To authorize depository institutions, depository institution holding companies, 

Fannie Mae, and Freddie Mac to lease foreclosed property held by 

such entities for up to 5 years, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 25, 2011 

Mr. GARY G. MILLER of California (for himself, Mr. BACHUS, Mrs. MCCARTHY of New York, and Mr. FRANK of Massachusetts) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To authorize depository institutions, depository institution 

holding companies, Fannie Mae, and Freddie Mac to 

lease foreclosed property held by such entities for up 

to 5 years, 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 ‘‘Neighborhood Preser5 vation Act of 2011’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds as follows: 


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1 (1) Depository institutions and affiliates of de2 pository institutions currently may control and lease 

3 foreclosed property for a limited period of time often 

4 subject to safety and soundness considerations, 

5 under various Federal laws and the law of some 

6 States. 

7 (2) Authorizing such institutions, the GSEs, 

8 and affiliates to enter into a long-term lease with the 

9 occupant of the property or any other person would 

10 reduce the number of residential properties entering 

11 into the housing inventory, which in turn would help 

12 to stabilize home values and restore confidence in 

13 the housing markets. 

14 (3) Allowing depository institutions, the GSEs, 

15 and affiliates of such institutions to lease foreclosed 

16 property will allow the institution or affiliate to dis17 pose of such property into a presumably more stable 

18 market at the end of the lease term which would re19 duce the loss the institution or affiliate may other20 wise be required to recognize upon disposition of the 

21 property. 

22 (4) Providing a means for foreclosed property 

23 to remain occupied during the housing downturn will 

24 preserve the property itself as well as the aesthetic 


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1 and economic values of neighboring homes and even 

2 whole neighborhoods. 

3 SEC. 3. BANK LEASING OF FORECLOSED PROPERTIES. 

4 (a) IN GENERAL.—Section 18 of the Federal Deposit 

5 Insurance Act (12 U.S.C. 1828) is amended by adding at 

6 the end the following new subsection: 

7 ‘‘(y) LEASING OF FORECLOSED PROPERTY.— 

8 ‘‘(1) LEASING AUTHORIZED.—Notwithstanding 

9 any provision of Federal or State law restricting the 

10 time during which a depository institution, or any 

11 affiliate of a depository institution, may hold or 

12 lease property, or any provision of Federal or State 

13 law prohibiting a depository institution, or any affil14 iate of a depository institution, from leasing prop15 erty and subject to this subsection and regulations 

16 prescribed under this subsection, any depository in17 stitution, and any affiliate of a depository institu18 tion, may lease to any individual, including a lease 

19 with an option to purchase, for not to exceed 5 years 

20 an interest in residential property which— 

21 ‘‘(A) was or is security for an extension of 

22 credit by such depository institution or affiliate; 

23 and 

24 ‘‘(B) came under the ownership or control 

25 of the depository institution or affiliate through 


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1 foreclosure, or a deed in lieu of foreclosure, on 

2 the extension of credit. 

3 ‘‘(2) SAFETY AND SOUNDNESS REGULATIONS.— 

4 The Federal banking agencies shall jointly prescribe 

5 regulations which— 

6 ‘‘(A) establish criteria and minimum re7 quirements for the leasing activity of any depos8 itory institution or affiliate of a depository in9 stitution, including minimum capital require10 ments, that the agency determines to be appro11 priate for the preservation of the safety and 

12 soundness of the institution or affiliate; 

13 ‘‘(B) establish requirements or exceptions 

14 that the agency determines are appropriate 

15 under this subsection for any such institution 

16 or affiliate for any other purpose; and 

17 ‘‘(C) provide for appropriate actions under 

18 section 38 with respect to any such lease if nec19 essary to protect the capital or safety and 

20 soundness of the institution or affiliate or any 

21 other necessary enforcement action. 

22 ‘‘(3) LENGTH OF LEASE.—If any provision of 

23 any Federal or State law, including the Bank Hold24 ing Company Act of 1956, governing the permissible 

25 activities of depository institutions or affiliates of deVerDate Mar 15 2010 02:51 Jul 26, 2011 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2636.IH H2636

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1 pository institutions permits a depository institution 

2 or any such affiliate to hold property as described in 

3 paragraph (1) for a period longer than 5 years, any 

4 lease under paragraph (1) may be extended to the 

5 extent permitted by such provision of law. 

6 ‘‘(4) SUNSET.—This section shall apply only 

7 with respect to leases entered into during the 3-year 

8 period beginning on the date of the enactment of the 

9 Neighborhood Preservation Act.’’. 

10 (b) INTENT OF THE CONGRESS.—It is the intent of 

11 the Congress that— 

12 (1) no permanent change in policy on leasing 

13 foreclosed property is being established with respect 

14 to depository institutions and depository institution 

15 holding companies; and 

16 (2) subsection (y) of section 18 of the Federal 

17 Deposit Insurance Act should not apply to leases en18 tered into after the sunset date contained in such 

19 subsection. 

20 SEC. 4. GOVERNMENT SPONSORED ENTERPRISE LEASING 

21 OF FORECLOSED PROPERTIES. 

22 (a) IN GENERAL.—For the purpose of mitigating 

23 losses to the taxpayer and stabilizing home prices, an en24 terprise may market for rental any real estate owned prop25 erties and assets of such enterprises and enter into lease 


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1 agreements with lessees as the Federal Housing Finance 

2 Agency determines appropriate, prior to the sale of such 

3 properties and assets, except that any such lease agree4 ment shall be no greater than 5 years. Authority to enter 

5 into leasing agreements pursuant to this subsection shall 

6 terminate 3 years after the date of the enactment of this 

7 Act. 

8 (b) ENTERPRISE DEFINED.—The term ‘‘enterprise’’ 

9 means— 

10 (1) the Federal National Mortgage Association; 

11 and 

12 (2) the Federal Home Loan Mortgage Corpora13 tion. 

Æ 


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