(5) the property mortgaged is the mortgagor’s 
principal place of residence; 
(6) the mortgagor does not own other property 
which is subject to a mortgage insured or held by 
the Secretary; 
(7) the mortgagor has applied to the Secretary 
for assistance in accordance with section 4; and 
(8) the mortgagor has not been more than 60 
days in arrears on a residential mortgage within the 
2-year period preceding the delinquency for which 
assistance is requested, unless the mortgagor can 
demonstrate that the prior delinquency was the re-
sult of financial hardship due to circumstances be-
yond the control of the mortgagor. 
(b) EFFECT
OF FINDING
OF INELIGIBILITY.—If, 
after reviewing an application for assistance submitted in 
accordance with section 4, the Secretary determines that 
the mortgagor has not met the conditions of eligibility de-
scribed in subsection (a), the mortgagor shall be prohib-
ited from reapplying for assistance under this Act until 
the expiration of the 6-month period beginning on the date 
of such determination unless there is a material change 
in the financial circumstances of the mortgagor. 
(c) DETERMINATION
RELATING
TO
FINANCIAL 
HARDSHIP.—In determining whether a financial hardship
(which may be caused by a reduction in income or an in-
crease in expenses, or both) is due to circumstances be-
yond the control of a mortgagor, the Secretary may con-
sider information regarding the mortgagor’s employment 
record, credit history, and current income. Such cir-
cumstances shall include, but not be limited to—
(1) loss of job of a member of the household; 
(2) salary, wage or earnings reduction of a 
member of the household; 
(3) injury, disability or illness of a member of 
the household; 
(4) divorce or separation in the household; or 
(5) death of a member of the household. 
(d) HOUSING COUNSELING AGENCIES.—The Sec-
retary shall designate and approve nonprofit housing 
counseling agencies in each State to be available to assist 
the Secretary in implementing the program established 
pursuant to subsection (a) of this section and to section 
4(b)(1)(A). Nonprofit housing agencies designated and ap-
proved under this subsection shall provide assistance to 
an eligible mortgagor during the entire period that such 
mortgagor receives assistance under this Act. 
SEC. 3. LEGAL ACTION. 
(a) CONDITIONS UNDER WHICH LEGAL ACTION IS 
PROHIBITED.—Except as otherwise provided in the Act,
a mortgagee of a mortgage which is insured under the Na-
tional Housing Act for a 1- to 4-family residence may not 
accelerate the maturity of or commence any legal action 
regarding such a mortgage (including, but not limited to, 
mortgage foreclosure to recover under such obligation) or 
take possession of any security of the mortgagor for such 
mortgage obligation unless the mortgagee has sent to the 
mortgagor notice pursuant to subsection (b). In addition, 
the mortgagee may not take such action—
(1) before the expiration of the 30-day period 
beginning on the date that notice of the intent to 
take such action was sent to the mortgagor in ac-
cordance with subsection (b); 
(2) before the expiration of the 30-day period 
beginning on the date of the initial meeting between 
the mortgagor and an approved counseling agency 
held in accordance with section 4(a); 
(3) if an application for such assistance under 
this Act has been submitted to the Secretary on be-
half of the mortgagor and such application—
(A) is pending; or 
(B) has been approved but payments have 
not yet been made toward the mortgage; or 
(4) if payment toward the mortgage is being 
made under this Act.