FHA In-Person Servicing Improvement Act of 2015

To authorize a pilot program to improve asset recovery levels, asset management, and homeownership retention with respect to delinquent single-family mortgages insured under the FHA mortgage insurance programs by providing for in-person contact outreach activities with mortgagors under such mortgages, and for other purposes. 1. Short title This Act may be cited as the FHA In-Person Servicing Improvement Act of 2015 2. Pilot program (a) Authority The Secretary of Housing and Urban Development shall carry out a pilot program under this section to use the authority under section 204(a)(2) of the National Housing Act ( 12 U.S.C. 1710(a)(2) (1) identifying mortgagors eligible for loan modifications or refinances and providing packages to the mortgagee for such purposes; (2) identifying mortgagers not eligible for a loan modification or refinance but willing to engage in pre-foreclosure sales or deeds in lieu of foreclosure, and providing information to the mortgagee in order to facilitate such actions; (3) identifying whether a home’s current occupant is the mortgagor or a renter, and if not occupied, taking steps to locate and make contact with the mortgagor; (4) providing information to the Secretary and the mortgagee regarding the condition of the home, in order to facilitate any actions needed to prevent the deterioration and loss of value of the home and assist the Department more generally in its asset management responsibilities; and (5) providing all relevant information on mortgagors and homes to the mortgagee on the loan and the Secretary in a format, approved by the Secretary, which helps improve asset management and maximize asset recovery of these delinquent loans. (b) Qualified entities For purposes of this section, the term qualified entity (1) have experience in carrying out the activities identified in subsection (a); (2) are not affiliated with the mortgagor under any of the covered mortgages for which it is authorized to carry out actions under the pilot program under this section; and (3) comply with all relevant State and Federal laws. (c) Selection of a qualified entity or entities (1) Scope The Secretary shall have the discretion to select qualified entities to participate in the pilot program under this section. (2) Criteria Such selection shall be based on the qualifications and experience of the entity or entities to carry out the specific activities identified in subsection (a), including the level of infrastructure capability in reporting detailed information on the mortgage loan, underlying property, and the mortgagor. (3) Participating loans The Secretary shall make available not less than 50,000 and not more than 100,000 loans that meet the delinquency criteria of subsection (a) for this pilot program. (4) Timing The Secretary shall select the qualified entity and entities and make available loans under the pilot for their performance within 90 days of the enactment of the Act. (d) Payments Payments to the entity or entities selected to carry out the pilot program under this section may be based on— (1) a flat amount per covered mortgage; (2) a performance success basis based on— (A) completed packages; or (B) completed loan modifications, pre-foreclosure sales, and deeds in lieu of foreclosure; or (3) a combination of the methods under paragraphs (1) and (2). (e) Prohibition on fees Entities selected to participate in the pilot program under this section may not charge any fees or require any payments, directly or indirectly, from the mortgagor or the mortgagee of a covered mortgage in connection any activities under the program. (f) HUD review and reporting The Secretary shall publish periodic updates on the status of the pilot program under this section, commencing not later than 30 days after the completion of actions under subsection (c)(1) and (c)(3), and thereafter not less often than every 90 days until termination of the pilot program under subsection (h). Not later than 60 days after termination of the pilot program, the Secretary shall submit to the Congress and make publicly available a final report on the pilot program, including information and analysis of performance characteristics, which may include comparisons of estimated asset recovery levels under the pilot program compared to comparable loans not included in the pilot and loans that have gone through loan sales. (g) Definitions For purposes of this section, the following definitions shall apply: (1) Covered mortgage The term covered mortgage (2) Secretary The term Secretary (h) Termination The Secretary may not make any payments under the pilot program under this section to any qualified entity for any in-person contact with a mortgagor that occurs after the expiration of the 24-month period beginning upon the completion of the actions under subsection (c)(1) and (c)(3).

Summary: FHA In-Person Servicing Improvement Act of 2015 Directs the Secretary of Housing and Urban Development (HUD) to carry out a pilot program to use authority under the National Housing Act to pay insurance benefits to compensate a mortgagee for any costs of taking loss mitigation actions providing an alternative to foreclosure of a mortgage in default or facing imminent default. Requires the Secretary to make payments to a qualified entity or entities to compensate for their costs of making in-person contact with mortgagors whose payments under covered mortgages are more than 60 days past due.