I 
116TH CONGRESS 
1ST SESSION H. R. 3958 
To make necessary reforms to improve compliance with loss mitigation re-
quirements by servicers of mortgages for single family housing insured 
by the FHA and to prevent foreclosures on FHA borrowers, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 25, 2019 
Ms. WATERS (for herself, Mrs. CAROLYN B. MALONEY of New York, Mr. 
CLAY, Ms. TLAIB, Mr. FOSTER, and Mr. CLEAVER) introduced the fol-
lowing bill; which was referred to the Committee on Financial Services 
A BILL 
To make necessary reforms to improve compliance with loss 
mitigation requirements by servicers of mortgages for 
single family housing insured by the FHA and to prevent 
foreclosures on FHA borrowers, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘FHA Foreclosure Pre-
vention Act of 2019’’. 
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SEC. 2. DOCUMENTATION OF LOSS MITIGATION EFFORTS. 
Subsection (a) of section 204 of the National Hous-
ing Act (12 U.S.C. 1710(a)) is amended by adding at the 
end the following new paragraph: 
‘‘(10) DOCUMENTATION OF LOSS MITIGATION 
EFFORTS.—Notwithstanding any other provision of 
this title, the Secretary may not pay insurance bene-
fits to any mortgagee of a single family mortgage in-
sured under this Act unless the mortgagee or other 
servicer for the mortgage has provided documenta-
tion to the Secretary that is sufficient to dem-
onstrate compliance with any requirements of the 
Secretary applicable to such mortgage relating to 
loss mitigation. This paragraph may not be con-
strued to limit the authority of the Secretary to im-
pose civil monetary penalties.’’. 
SEC. 3. HUD OVERSIGHT OF SERVICERS. 
Section 533 of the National Housing Act (12 U.S.C. 
1735f–11) is amended by adding at the end the following 
new subsection: 
‘‘(d) OVERSIGHT OF MORTGAGE SERVICERS.— 
‘‘(1) OVERSIGHT.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
conduct oversight of servicers of single family 
mortgages insured under this Act on a regular 
and ongoing basis and in a manner designed to 
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ensure that such servicers comply with the re-
quirements of this Act and the standards and 
guidelines established by the Secretary for serv-
icing of such mortgages and to identify systemic 
problems and trends with such compliance. 
‘‘(B) LOSS MITIGATION REQUIREMENTS.— 
Such oversight shall include oversight designed 
to ensure that such servicers comply with the 
requirements under this Act, and the standards 
and guidelines established by the Secretary, for 
loss mitigation, and shall include appropriate 
sampling and review of such servicer compli-
ance, including direct information collection 
through generally accepted means from bor-
rowers whose files were sampled, such as sur-
veys, focus groups, interview, or other similar 
measures. 
‘‘(2) 
CORRECTIVE
ACTION.—The 
Secretary 
shall take such actions as may be necessary to rem-
edy failures by servicers of single family mortgages 
insured under this Act to comply with the require-
ments of this Act and the standards and guidelines 
established by the Secretary for servicing of such 
mortgages, including ordering non-compliant servi-
cers to take corrective actions, including barring 
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foreclosure and cancelling from the borrowers ac-
count balance and from any insurance claim any in-
terest and other fees that accrued during periods of 
noncompliance.’’. 
SEC. 4. COMPLAINT PROCEDURE REGARDING LOSS MITI-
GATION. 
Title V of the National Housing Act (12 U.S.C. 
1731a et seq.) is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 543. COMPLAINT PROCEDURE REGARDING LOSS 
MITIGATION. 
‘‘(a) COMPLAINT PROCEDURE FOR BORROWERS.— 
‘‘(1) FEATURES.—The Secretary shall establish 
and maintain a procedure for mortgagors under sin-
gle family mortgages insured under this Act to reg-
ister complaints with the Secretary regarding serv-
icing, including loss mitigation actions, which shall 
include making available to the public a website of 
the Department, an e-mail address, a phone number, 
and a mailing address for such purpose. Such proce-
dure shall provide an opportunity for servicers to re-
spond to such complaints and submit information re-
garding complaints. 
‘‘(2) ATTEMPT TO RESOLVE.—For each com-
plaint registered under the procedure established 
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pursuant to this subsection, the Secretary shall re-
view the complaint and any response by the servicer 
and shall seek to resolve any dispute between the 
mortgagor and the servicer and make a determina-
tion with regard to complaint. 
‘‘(3) USE OF INFORMATION.—In making any 
determinations regarding servicers’ compliance with 
the requirements, standards, and guidelines for serv-
icing, including in identifying systemic problems and 
trends with servicing, the Secretary shall take into 
consideration information obtained under the com-
plaint procedure under this subsection. 
‘‘(b) NOTIFICATION OF OPPORTUNITY TO APPEAL.— 
Upon making a determination with respect to a complaint, 
the Secretary shall notify the complainant of such deter-
mination, of the opportunity for the complainant to appeal 
an adverse determination under the procedure established 
pursuant to subsection (a), and the requirements for and 
how to initiate such an appeal. 
‘‘(c) APPEALS PROCEDURE.— 
‘‘(1) ESTABLISHMENT.—The Secretary shall 
provide a procedure for mortgagors to appeal an ad-
verse determination by the Secretary regarding a 
complaint registered under the procedure established 
pursuant to subsection (a), and, if appropriate, may 
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take action pursuant to section 533(d)(2) pursuant 
to a decision on such an appeal. 
‘‘(2) LIMITATION.—The Secretary shall provide 
that the procedure established pursuant to this sub-
section may not provide an appeal for any complaint 
that was previously appealed under such procedure. 
‘‘(d) PROHIBITION
ON FORECLOSURE.—The Sec-
retary shall prohibit the foreclosure of a mortgage during 
any period that a complaint or appeal regarding such 
mortgage is pending under the procedures established pur-
suant to this section and during a reasonable period after 
a complainant is notified of a determination regarding a 
complaint that provides the complainant an opportunity 
to appeal such decision. 
‘‘(e) REPORTING.—The Secretary shall submit a re-
port to the Congress annually regarding complaints re-
ceived under the procedure maintained pursuant to sub-
section (a), which shall specify the number of complaints 
received, disaggregated by types of complaints, status of 
complaints, geographic distribution of complaints, and av-
erage times for resolution of complaints, shall include rel-
evant information submitted by servicers, and shall in-
clude any other information that the Secretary considers 
relevant. Such report shall comply with any applicable pri-
vacy protections.’’. 
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SEC. 5. NOTICE TO BORROWERS OF LOSS MITIGATION STA-
TUS AND DECISIONS. 
Subsection (a) of section 204 of the National Hous-
ing Act (12 U.S.C. 1710(a)), as amended by the preceding 
provisions of this Act, is further amended by adding at 
the end the following new paragraph: 
‘‘(11) NOTICE TO BORROWERS OF LOSS MITIGA-
TION STATUS AND DECISIONS.— 
‘‘(A) REQUIRED
NOTICE.—The Secretary 
shall require that before any acceleration of the 
indebtedness due under a mortgage, the servicer 
for the mortgage shall provide written notice to 
the mortgagor that includes— 
‘‘(i) a summary explaining how the 
servicer applied the loss mitigation option 
priority analysis established by the Sec-
retary, including the loss mitigation review 
waterfall under section III.A.2.j.iii of the 
Secretary’s Handbook 4000.1 or any suc-
cessor provision, and setting forth the ac-
tual information entered in applying such 
analysis; 
‘‘(ii) with respect to any mortgage for 
which the servicer did not conduct the 
analysis referred to in clause (i) because 
the servicer determined that the mortgagor 
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rower, the Secretary will provide the bor-
rower with all loss mitigation evaluation 
documentation required by the Secretary 
with respect to the mortgage, including 
monthly evaluations referred to in clause 
(iii); and 
‘‘(vi) information describing the proce-
dure under section 543(a) for registering 
complaints regarding loss mitigation and 
the procedure under section 543(c) for ap-
pealing a servicer’s decisions regarding loss 
mitigation actions. 
‘‘(B) REFERENCES.—Such notice shall 
contain references to the applicable provisions 
of applicable handbook of the Secretary regard-
ing ongoing loss mitigation reviews and stand-
ards for such reviews and shall identify how 
such provisions may be accessed on a publicly 
accessible website of the Department.’’. 
SEC. 6. RULE OF CONSTRUCTION. 
Nothing in this Act may be construed to supercede, 
or exempt any person from complying with, any provision 
of the Real Estate Settlement Procedures Act of 1974 (12 
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U.S.C. 2601 et seq.) or the regulations issued under such 
Act. 
Æ 
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