IB 
Union Calendar No. 5 
111TH CONGRESS 
1ST SESSION 
H. R. 788 
[Report No. 111–13] 
To provide a safe harbor for mortgage servicers who engage in specified 
mortgage loan modifications, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 2, 2009 
Mr. KANJORSKI (for himself, Mr. CASTLE, and Mr. FRANK of Massachusetts) 
introduced the following bill; which was referred to the Committee on Fi-
nancial Services 
FEBRUARY 10, 2009 
Additional sponsor: Mr. CAPUANO 
FEBRUARY 10, 2009 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on February 2, 2009] 
A BILL 
To provide a safe harbor for mortgage servicers who engage 
in specified mortgage loan modifications, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SERVICER SAFE HARBOR. 
(a) SAFE HARBOR.— 
(1) 
LOAN
MODIFICATIONS
AND
WORKOUT 
PLANS.—Notwithstanding any other provision of law, 
and notwithstanding any investment contract between 
a servicer and a securitization vehicle or investor, a 
servicer that acts consistent with the duty set forth in 
section 129A(a) of Truth in Lending Act (15 U.S.C. 
1639a) shall not be liable for entering into a loan 
modification or workout plan with respect to any 
such mortgage that meets all of the criteria set forth 
in paragraph (2)(B) to— 
(A) any person, based on that person’s own-
ership of a residential mortgage loan or any in-
terest in a pool of residential mortgage loans or 
in securities that distribute payments out of the 
principal, interest and other payments in loans 
on the pool; 
(B) any person who is obligated pursuant 
to a derivatives instrument to make payments 
determined in reference to any loan or any in-
terest referred to in subparagraph (A); or 
(C) any person that insures any loan or 
any interest referred to in subparagraph (A) 
under any law or regulation of the United States 
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or any law or regulation of any State or polit-
ical subdivision of any State. 
(2) ABILITY TO MODIFY MORTGAGES.— 
(A) ABILITY.—Notwithstanding any other 
provision of law, and notwithstanding any in-
vestment contract between a servicer and a 
securitization vehicle or investor, a servicer— 
(i) shall not be limited in the ability to 
modify mortgages, the number of mortgages 
that can be modified, the frequency of loan 
modifications, or the range of permissible 
modifications; and 
(ii) shall not be obligated to repurchase 
loans from or otherwise make payments to 
the securitization vehicle on account of a 
modification, workout, or other loss mitiga-
tion plan for a residential mortgage or a 
class of residential mortgages that constitute 
a part or all of the mortgages in the 
securitization vehicle, 
if any mortgage so modified meets all of the cri-
teria set forth in subparagraph (B). 
(B) CRITERIA.—The criteria under this 
subparagraph with respect to a mortgage are as 
follows: 
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(i) Default on the payment of such 
mortgage has occurred or is reasonably fore-
seeable. 
(ii) The property securing such mort-
gage is occupied by the mortgagor of such 
mortgage. 
(iii) The servicer reasonably and in 
good faith believes that the anticipated re-
covery on the principal outstanding obliga-
tion of the mortgage under the particular 
modification or workout plan or other loss 
mitigation action will exceed, on a net 
present value basis, the anticipated recovery 
on the principal outstanding obligation of 
the mortgage to be realized through fore-
closure. 
(3) APPLICABILITY.—This subsection shall apply 
only with respect to modifications, workouts, and 
other loss mitigation plans initiated before January 
1, 2012. 
(b) REPORTING.—Each servicer that engages in loan 
modifications or workout plans subject to the safe harbor 
in subsection (a) shall report to the Secretary on a regular 
basis regarding the extent, scope and results of the servicer’s 
modification activities. The Secretary shall prescribe regu-
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lations specifying the form, content, and timing of such re-
ports. 
(c) DEFINITION OF SECURITIZATION VEHICLES.—For 
purposes of this section, the term ‘‘securitization vehicle’’ 
means a trust, corporation, partnership, limited liability 
entity, special purpose entity, or other structure that— 
(1) is the issuer, or is created by the issuer, of 
mortgage pass-through certificates, participation cer-
tificates, mortgage-backed securities, or other similar 
securities backed by a pool of assets that includes resi-
dential mortgage loans; and 
(2) holds such mortgages. 
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Union Calendar No. 5 
111TH CONGRESS 
1ST SESSION 
H. R. 788 
[Report No. 111–13] 
A BILL 
To provide a safe harbor for mortgage servicers 
who engage in specified mortgage loan modifica-
tions, and for other purposes. 
FEBRUARY 10, 2009 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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00:07 Feb 11, 2009
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