I 

111TH CONGRESS 

1ST SESSION H. R. 3142 

To establish a program to assist homeowners experiencing unavoidable, 

temporary difficulty making payments on home mortgages. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 9, 2009 

Mr. FATTAH introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To establish a program to assist homeowners experiencing 

unavoidable, temporary difficulty making payments on 

home mortgages. 

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 ‘‘Homeowners’ Emer5 gency Mortgage Assistance Act’’. 

6 SEC. 2. MORTGAGE EMERGENCY ASSISTANCE PROGRAM. 

7 (a) IN GENERAL.—The Secretary shall establish a 

8 program to make payments on a mortgage for a 1- to 4- 

9 family residence when— 


jbell on DSKHWCL6B1PROD with BILLS
2 

•HR 3142 IH

1 (1) the mortgagee has given the mortgagor no2 tice in accordance with section 3(b) that it intends 

3 to foreclose the mortgage; 

4 (2) at least 2 full monthly installments due on 

5 the mortgage are unpaid after the application of any 

6 partial payments that may have been accepted but 

7 not yet applied to the mortgage account; 

8 (3) the mortgagor is suffering financial hard9 ship due to circumstances beyond the control of the 

10 mortgagor which render the mortgagor unable to 

11 correct the delinquency on the mortgage and unable 

12 to make full mortgage payments before the expira13 tion of the 60-day period beginning on the date that 

14 notice was sent to the mortgagor in accordance with 

15 section 3(b); 

16 (4) there is a reasonable prospect that the 

17 mortgagor will be able to resume full mortgage pay18 ments not later than 36 months after the beginning 

19 of the period for which assistance payments are pro20 vided and to pay the mortgage in full by its maturity 

21 date or by a later date agreed upon by the mort22 gagee; 

23 (5) the property mortgaged is the mortgagor’s 

24 principal place of residence; 


jbell on DSKHWCL6B1PROD with BILLS
3 

•HR 3142 IH

1 (6) the mortgagor does not own other residen2 tial property which is subject to a mortgage; 

3 (7) the mortgagor has applied to the Secretary 

4 for assistance in accordance with section 4; and 

5 (8) the mortgagor has not been more than 60 

6 days in arrears on a residential mortgage within the 

7 2-year period preceding the delinquency for which 

8 assistance is requested, unless the mortgagor can 

9 demonstrate that the prior delinquency was the re10 sult of financial hardship due to circumstances be11 yond the control of the mortgagor. 

12 (b) EFFECT OF FINDING OF INELIGIBILITY.—If, 

13 after reviewing an application for assistance submitted in 

14 accordance with section 4, the Secretary determines that 

15 the mortgagor has not met the conditions of eligibility de16 scribed in subsection (a), the mortgagor shall be prohib17 ited from reapplying for assistance under this Act until 

18 the expiration of the 6-month period beginning on the date 

19 of such determination unless there is a material change 

20 in the financial circumstances of the mortgagor. 

21 (c) DETERMINATION RELATING TO FINANCIAL

22 HARDSHIP.—In determining whether a financial hardship 

23 (which may be caused by a reduction in income or an in24 crease in expenses, or both) is due to circumstances be25 yond the control of a mortgagor, the Secretary may conVerDate Nov 24 2008 05:16 Jul 10, 2009 Jkt 079200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3142.IH H3142

jbell on DSKHWCL6B1PROD with BILLS
4 

•HR 3142 IH

1 sider information regarding the mortgagor’s employment 

2 record, credit history, and current income. Such cir3 cumstances shall include, but not be limited to— 

4 (1) loss of job of a member of the household; 

5 (2) salary, wage, or earnings reduction of a 

6 member of the household; 

7 (3) injury, disability, or illness of a member of 

8 the household; 

9 (4) divorce or separation in the household; or 

10 (5) death of a member of the household. 

11 (d) HOUSING COUNSELING AGENCIES.—The Sec12 retary shall designate and approve nonprofit housing 

13 counseling agencies in each State to be available to assist 

14 the Secretary in implementing the program established 

15 pursuant to subsection (a) of this section and to section 

16 4(b)(1)(A). Nonprofit housing agencies designated and ap17 proved under this subsection shall provide assistance to 

18 an eligible mortgagor during the entire period that such 

19 mortgagor receives assistance under this Act. 

20 SEC. 3. LEGAL ACTION. 

21 (a) CONDITIONS UNDER WHICH LEGAL ACTION IS

22 PROHIBITED.—Except as otherwise provided in the Act, 

23 a mortgagee of a mortgage for a 1- to 4-family residence 

24 may not accelerate the maturity of or commence any legal 

25 action regarding such a mortgage (including, but not limVerDate Nov 24 2008 05:16 Jul 10, 2009 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3142.IH H3142

jbell on DSKHWCL6B1PROD with BILLS
5 

•HR 3142 IH

1 ited to, mortgage foreclosure to recover under such obliga2 tion) or take possession of any security of the mortgagor 

3 for such mortgage obligation unless the mortgagee has 

4 sent to the mortgagor notice pursuant to subsection (b). 

5 In addition, the mortgagee may not take such action— 

6 (1) before the expiration of the 30-day period 

7 beginning on the date that notice of the intent to 

8 take such action was sent to the mortgagor in ac9 cordance with subsection (b); 

10 (2) before the expiration of the 30-day period 

11 beginning on the date of the initial meeting between 

12 the mortgagor and an approved counseling agency 

13 held in accordance with section 4(a); 

14 (3) if an application for such assistance under 

15 this Act has been submitted to the Secretary on be16 half of the mortgagor and such application— 

17 (A) is pending; or 

18 (B) has been approved but payments have 

19 not yet been made toward the mortgage; or 

20 (4) if payment toward the mortgage is being 

21 made under this Act. 

22 (b) REQUIREMENTS OF NOTICE.—The Secretary 

23 shall issue regulations that include, but are not limited 

24 to, a uniform notice under this section. Such notice shall 

25 be in plain language and shall— 


jbell on DSKHWCL6B1PROD with BILLS
6 

•HR 3142 IH

1 (1) inform the mortgagor in large bold type 

2 that he or she may be eligible for temporary assist3 ance in making mortgage payments; 

4 (2) include an explanation of the mortgage as5 sistance program under this Act; 

6 (3) inform the mortgagor that to apply for 

7 mortgage assistance, he or she shall attend a meet8 ing in accordance with section 4(a) within 30 days 

9 of the date of the notice; 

10 (4) include the legal action intended and the 

11 basis therefore; 

12 (5) include a list of approved counseling agen13 cies located in the State in which the mortgagor re14 sides; 

15 (6) be sent via first class mail to the last known 

16 address of the mortgagor; and 

17 (7) be subject to such other requirements as 

18 prescribed by the Secretary. 

19 SEC. 4. APPLICATION FOR ASSISTANCE. 

20 (a) MEETING.— 

21 (1) IN GENERAL.—To apply for assistance 

22 under this Act, not later than 30 days after receiv23 ing notice in accordance with section 3(b), a mort24 gagor shall attend a face-to-face meeting with the 

25 mortgagee or an approved counseling agency to atVerDate Nov 24 2008 05:16 Jul 10, 2009 Jkt 079200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3142.IH H3142

jbell on DSKHWCL6B1PROD with BILLS
7 

•HR 3142 IH

1 tempt to prevent legal action for which the notice 

2 was sent by restructuring the mortgage payment 

3 schedule. A meeting under this paragraph may be 

4 conducted over the telephone under circumstances 

5 prescribed by the Secretary. 

6 (2) NOTICE.—If the mortgagor meets with the 

7 approved counseling agency within the period speci8 fied in paragraph (1), the approved counseling agen9 cy shall send notice of the meeting which includes, 

10 but is not limited to, the date of the meeting, to the 

11 mortgagee not later than 5 business days after the 

12 meeting. 

13 (b) PREPARATION; SUBMISSION.— 

14 (1) IN GENERAL.—If the mortgagor is not able 

15 to resolve the default and prevent foreclosure before 

16 the expiration of the 30-day period beginning on the 

17 date of the meeting, the mortgagor may file an ap18 plication for mortgage assistance under this Act. At 

19 the request of the mortgagor, an approved coun20 seling agency shall— 

21 (A) assist the mortgagor in preparing an 

22 application for assistance under this Act; and 

23 (B) not later than 30 days after the mort24 gagor initially requests assistance in the prepaVerDate Nov 24 2008 05:16 Jul 10, 2009 Jkt 079200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3142.IH H3142

jbell on DSKHWCL6B1PROD with BILLS
8 

•HR 3142 IH

1 ration of the application, submit the completed 

2 application to the Secretary. 

3 (2) FEES.—The Secretary may pay approved 

4 counseling agencies a fee, in an amount determined 

5 by the Secretary, for rendering assistance pursuant 

6 to this Act. 

7 (c) NOTICE TO MORTGAGEE.—If the approved coun8 seling agency submits an application for assistance to the 

9 Secretary on behalf of a mortgagor, the approved coun10 seling agency shall, not later than 5 business days after 

11 submitting the application, inform the mortgagee of the 

12 date that the application was submitted. 

13 (d) FORM; CONTENTS.—An application for assistance 

14 under this Act shall be submitted on a form prescribed 

15 by the Secretary and shall include a financial statement 

16 disclosing all assets and liabilities of the mortgagor, 

17 whether singly or jointly held, and all household income 

18 regardless of source. 

19 (e) EFFECT OF MISREPRESENTATION.—A mortgagor 

20 who intentionally misrepresents any financial information 

21 in connection with the filing of an application for assist22 ance under this Act may be denied assistance and required 

23 to immediately repay any amount of assistance received, 

24 and the mortgagee may, at any time thereafter, take any 


jbell on DSKHWCL6B1PROD with BILLS
9 

•HR 3142 IH

1 legal action to enforce the mortgage without any further 

2 restrictions or requirements under this Act. 

3 (f) AVAILABILITY.—An application for assistance 

4 under this Act may be obtained from an approved coun5 seling agency. 

6 (g) DETERMINATION ON APPLICATION.— 

7 (1) TIME PERIOD.—The Secretary shall deter8 mine eligibility of a mortgagor for assistance under 

9 this Act not later than 60 days after receipt of the 

10 application of the mortgagor. 

11 (2) NOTIFICATION.—Not later than 5 business 

12 days after making the determination on an applica13 tion for assistance, the Secretary shall notify the 

14 mortgagor and the mortgagee as to whether the ap15 plication has been approved or disapproved. 

16 SEC. 5. ASSISTANCE PAYMENTS BY SECRETARY. 

17 (a) AMOUNT TO BRING MORTGAGE CURRENT.—If 

18 the Secretary determines that a mortgagor is eligible for 

19 assistance under this Act and the Secretary approves such 

20 mortgagor for assistance, the Secretary shall pay to the 

21 mortgagee from any amounts made available to carry out 

22 this Act the full amount due to the mortgagee pursuant 

23 to the terms of the mortgage without regard to any accel24 eration under the mortgage, or the full amount of any al25 ternative mortgage payments agreed to by the mortgagee 


jbell on DSKHWCL6B1PROD with BILLS
10 

•HR 3142 IH

1 and mortgagor on the date that the application is ap2 proved by the Secretary. This amount shall include the 

3 amount of principal, interest, taxes, assessments, ground 

4 rents, hazard insurance, any mortgage insurance or credit 

5 insurance premiums, and reasonable attorneys’ fees in6 curred by such mortgagee in relation to the arrearage. 

7 (b) MONTHLY ASSISTANCE PAYMENTS.— 

8 (1) IN GENERAL.—The Secretary shall make 

9 monthly mortgage assistance payments to the mort10 gagee on behalf of the mortgagor pursuant to this 

11 Act. 

12 (2) OBLIGATION OF THE MORTGAGOR.—A 

13 mortgagor on whose behalf the Secretary is making 

14 the mortgage assistance payments shall pay monthly 

15 payments to the Secretary. Such payments shall be 

16 in an amount which will cause the mortgagor’s total 

17 housing expense not to exceed 35 percent of the 

18 mortgagor’s net effective income. This shall be the 

19 maximum amount the mortgagor can be required to 

20 pay during the 36 months a mortgagor is eligible for 

21 mortgage assistance. 

22 (3) OBLIGATION OF THE SECRETARY.—Upon 

23 receipt of this payment from the mortgagor, the Sec24 retary or the Secretary’s duly authorized agent shall 


jbell on DSKHWCL6B1PROD with BILLS
11 

•HR 3142 IH

1 send the total mortgage payment directly to the 

2 mortgagee. 

3 (c) REVIEW UPON DELINQUENCY.—If the mortgagor 

4 fails to pay to the Secretary any amounts due directly 

5 from the mortgagor under this section not later than 15 

6 days after such due date, the Secretary or its designated 

7 agent shall review the mortgagor’s financial circumstances 

8 to determine whether a delinquency in payments due from 

9 the mortgagor under this section or section 6 is the result 

10 of a change in the mortgagor’s financial circumstances 

11 since the payment amount was last determined. If the de12 linquency is not the result of a change in the mortgagor’s 

13 financial circumstances, the Secretary shall terminate fu14 ture mortgage assistance payments and the mortgagee 

15 may, at any time thereafter, take any legal action to en16 force its mortgage without any further restriction or re17 quirement. If the delinquency is the result of such a 

18 change, the Secretary shall modify the mortgagor’s re19 quired payments to the Secretary as the Secretary shall 

20 determine. 

21 (d) PERIOD FOR ASSISTANCE.—Payments under this 

22 Act shall be provided for a period not to exceed 36 months, 

23 either consecutively or nonconsecutively. The Secretary 

24 shall establish procedures for periodic review of the mort25 gagor’s financial circumstances for the purpose of deterVerDate Nov 24 2008 05:16 Jul 10, 2009 Jkt 079200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3142.IH H3142

jbell on DSKHWCL6B1PROD with BILLS
12 

•HR 3142 IH

1 mining the necessity for continuation, termination, or ad2 justment of the amount of the payments. 

3 SEC. 6. REPAYMENT OF ASSISTANCE. 

4 (a) ASSISTANCE LOAN.—The amount by which the 

5 assistance payments made by the Secretary to the mort6 gagee exceeds the amount of payments made by the mort7 gagor to the Secretary shall be a loan by the Secretary 

8 to the mortgagor. The loan shall be evidenced by such doc9 uments as the Secretary shall determine necessary to pro10 tect the interests of the United States. 

11 (b) REPAYMENT OF ASSISTANCE LOAN.—Before 

12 making assistance payments under this Act on behalf of 

13 a mortgagor, the Secretary shall enter into an agreement 

14 with the mortgagor for repayment of all mortgage assist15 ance made by the Secretary under section 5, plus interest 

16 as provided in subsection (c). The agreement shall provide 

17 for monthly payments by the mortgagor to the Secretary 

18 which (1) shall begin once the Secretary has determined 

19 that continuation of mortgage assistance payments to the 

20 mortgagee is unnecessary, and (2) shall be in an amount 

21 determined as follows: 

22 (1) HOUSING EXPENSE LESS THAN 35 PER23 CENT.—If the mortgagor’s total housing expense is 

24 less than 35 percent of the mortgagor’s net effective 

25 income, the mortgagor shall pay to the Secretary the 


jbell on DSKHWCL6B1PROD with BILLS
13 

•HR 3142 IH

1 difference between 35 percent of the mortgagor’s net 

2 effective income and the mortgagor’s total housing 

3 expense unless otherwise determined by the Sec4 retary after examining the mortgagor’s financial cir5 cumstances and ability to contribute to repayment of 

6 the mortgage assistance. 

7 (2) HOUSING EXPENSE GREATER THAN 35 PER8 CENT.—If the mortgagor’s total housing expense is 

9 more than 35 percent of the mortgagor’s net effec10 tive income, repayment of the mortgage assistance 

11 shall be deferred until the mortgagor’s total housing 

12 expense is less than 35 percent of the mortgagor’s 

13 net effective income. 

14 (3) WHEN MORTGAGE PAID IN FULL.—Notwith15 standing paragraphs (1) and (2), if repayment of 

16 mortgage assistance is not made by the date that 

17 the mortgage is paid in full, the mortgagor shall 

18 make mortgage assistance repayments in an amount 

19 not less than the previous regular mortgage payment 

20 until the mortgage assistance is repaid. 

21 (c) INTEREST.—Interest shall accrue on all mortgage 

22 assistance made under this Act at the rate determined 

23 monthly by the Secretary of the Treasury to be equal to 

24 the then current average yield on outstanding 30-year 

25 bonds issued by the Secretary of the Treasury under secVerDate Nov 24 2008 05:16 Jul 10, 2009 Jkt 079200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H3142.IH H3142

jbell on DSKHWCL6B1PROD with BILLS
14 

•HR 3142 IH

1 tion 3102 of title 31, United States Code, and shall accrue 

2 only during the period in which the mortgagor is required 

3 to make repayment under this section. 

4 (d) LIEN TO SECURE REPAYMENT OF ASSIST5 ANCE.—Repayment of amounts owed to the Secretary 

6 from a mortgagor shall be secured by a mortgage lien on 

7 the property and by such other obligation as the Secretary 

8 may require. The lien or other security interest of the Sec9 retary shall not be deemed to take priority over any other 

10 secured lien or secured interest in effect against the mort11 gagor’s property on the date assistance payments begin. 

12 The Secretary may allow subordination of the mortgage 

13 assistance lien only if such subordination is necessary to 

14 permit the mortgagor to obtain a home improvement loan 

15 for repairs necessary to preserve the property. 

16 (e) TIME FOR REPAYMENT.—Payments under this 

17 section shall be made by the mortgagor to the Secretary 

18 not later than 14 days after each mortgage payment is 

19 due under the mortgage (or in the case of repayment after 

20 the mortgage has been paid in full, not later than the date 

21 the mortgage payments were due under the mortgage). 

22 SEC. 7. DEFINITIONS. 

23 For the purposes of this Act, the following definitions 

24 apply: 


jbell on DSKHWCL6B1PROD with BILLS
15 

•HR 3142 IH

1 (1) APPROVED COUNSELING AGENCY.—The 

2 term ‘‘approved counseling agency’’ means a non3 profit housing counseling agency approved by the 

4 Secretary pursuant to section 2(e). 

5 (2) GROSS HOUSEHOLD INCOME.—The term 

6 ‘‘gross household income’’ means the total income of 

7 a mortgagor, the mortgagor’s spouse, children resid8 ing in the same residence as the mortgagor, and any 

9 other person living in such residence that is declared 

10 by the mortgagor as a dependent for Federal income 

11 tax purposes. 

12 (3) HOUSEHOLD.—The term ‘‘household’’ 

13 means a mortgagor, the mortgagor’s spouse, chil14 dren residing in the same residence as the mort15 gagor, and any other person living in such residence 

16 that is declared by the mortgagor as a dependent for 

17 Federal income tax purposes. 

18 (4) HOUSING EXPENSE.—The term ‘‘housing 

19 expense’’ means the sum of the mortgagor’s monthly 

20 maintenance, utility, and hazard insurance expense, 

21 taxes, and required mortgage payments, including 

22 escrows. 

23 (5) MORTGAGEE; MORTGAGOR.—The terms 

24 ‘‘mortgagee’’ and ‘‘mortgagor’’ have the meanings 


jbell on DSKHWCL6B1PROD with BILLS
16 

•HR 3142 IH

1 given such terms in section 201 of the National 

2 Housing Act (12 U.S.C. 1707). 

3 (6) NET EFFECTIVE INCOME.—The term ‘‘net 

4 effective income’’ means the gross household income 

5 of the mortgagor, less city, State, and Federal in6 come and social security taxes. 

7 (7) SECRETARY.—The term ‘‘Secretary’’ means 

8 the Secretary of Housing and Urban Development. 

9 SEC. 8. AUTHORIZATION OF APPROPRIATIONS. 

10 There is authorized to be appropriated for each fiscal 

11 year such sums as may be necessary to provide assistance 

12 under this Act and for costs (as such term is defined in 

13 section 502 of the Federal Credit Reform Act of 1990 (2 

14 U.S.C. 661a)) of such assistance. 

Æ 


jbell on DSKHWCL6B1PROD with BILLS