SEC. 2. DUTY TO ENGAGE IN LOSS MITIGATION. 
(a) DUTY.—The Real Estate Settlement Procedures 
Act of 1974 is amended by inserting after section 6 (12 
U.S.C. 2605) the following new section: 
‘‘SEC. 6A. DUTY TO ENGAGE IN LOSS MITIGATION. 
‘‘(a) DUTY
FOR COVERED FEDERALLY RELATED 
MORTGAGE LOANS.— 
‘‘(1) DUTY.—Upon default of any federally re-
lated mortgage loan that is secured by a lien on the 
principal residence of the borrower or mortgagor, 
the mortgagee shall engage in reasonable loss miti-
gation activities that provide for— 
‘‘(A) the long-term affordability of the 
loan; and 
‘‘(B) the maximum retention of home eq-
uity. 
‘‘(2) RESPONSIBILITIES
BY
LIENHOLDERS.— 
With respect to a default referred to in paragraph 
(1): 
‘‘(A) SENIOR LIEN.—The mortgagee of the 
senior lien on the residence shall have primary 
responsibility for the loss mitigation activities 
required under such paragraph. 
‘‘(B) SUBORDINATE
LIENS.—The mort-
gagee of any subordinate lien shall refrain from 
interfering with or inhibiting the modification of 
VerDate Mar 15 2010 
22:53 Apr 19, 2011
Jkt 099200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H1567.IH
H1567
srobinson on DSKHWCL6B1PROD with BILLS
the senior lien and shall comply with the rules 
prescribed in subsection (g) to modify the sub-
ordinate lien. 
‘‘(b) NO FORECLOSURE WITHOUT LOSS MITIGA-
TION.— 
‘‘(1) PROHIBITION.—No foreclosure of any cov-
ered federally related mortgage loan shall be initi-
ated, continued, or completed if the mortgagee or 
servicer has at any time failed to comply with the re-
quirements of this section with respect to such loan. 
‘‘(2) CERTIFICATION OF LOSS MITIGATION AC-
TIVITIES.— 
‘‘(A) PRECONDITION TO SALE.—The filing 
of a certification of loss mitigation activities 
with respect to a covered federally related mort-
gage loan shall be a condition precedent— 
‘‘(i) to any valid sale pursuant to fore-
closure of the principal residence that is 
subject the lien securing the loan; and 
‘‘(ii) to the filing of any action to re-
cover possession of the residence by the 
purchaser at such a sale. 
‘‘(B) FILING.—In the case of a residence 
that is subject to a lien securing a covered fed-
erally related mortgage loan, after foreclosure 
VerDate Mar 15 2010 
22:53 Apr 19, 2011
Jkt 099200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H1567.IH
H1567
srobinson on DSKHWCL6B1PROD with BILLS
on such loan, the State or local government of-
ficial responsible for recording deeds and other 
transfers of real property in the jurisdiction in 
which the residence is located shall not record, 
nor permit the recordation of, any deed trans-
ferring title to such residence unless such offi-
cial certifies that— 
‘‘(i) that this section does not apply to 
such federally related mortgage loan; or 
‘‘(ii) the party conducting the sale or 
transfer has demonstrated that the re-
quirements of this section have been met. 
‘‘(C) FORM AND CONTENT.—The Director 
of the Bureau of Consumer Financial Protec-
tion of the Federal Reserve System shall, by 
regulation, provide for the form and content of 
a certification pursuant to this paragraph. 
‘‘(3) VOIDANCE
OF
SALE.—Notwithstanding 
any other provision of Federal or State law or any 
contract, a sale or other transfer of property in vio-
lation of this subsection shall be null and void. 
‘‘(c) LOSS MITIGATION ACTIVITIES.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, loss mitigation activities shall include— 
VerDate Mar 15 2010 
22:53 Apr 19, 2011
Jkt 099200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H1567.IH
H1567
srobinson on DSKHWCL6B1PROD with BILLS
‘‘(A) priority loss mitigation activities 
under paragraph (5); 
‘‘(B) secondary loss mitigation activities 
under paragraph (6); and 
‘‘(C) last-resort loss mitigation activities 
under paragraph (7). 
‘‘(2) ORDER OF PURSUIT.—In complying with 
subsection (a), the mortgagee or servicer shall pur-
sue loss mitigation activities in the following order: 
first priority loss mitigation activities, then sec-
ondary loss mitigation activities, and then last-resort 
loss mitigation activities. If any loss mitigation activ-
ity is taken, the mortgagee or servicer shall provide 
written notice of such activity to the borrower or 
mortgagor by mail not later than 7 business days 
after such action is taken. 
‘‘(3) CONSIDERATION
OF
CIRCUMSTANCES
IN 
PROVISION OF LOSS MITIGATION ACTIVITIES.— 
‘‘(A) DETERMINATION.—In determining 
the type of loss mitigation activity to provide 
with respect to a covered federally related mort-
gage loan, the mortgagee or servicer shall con-
sider the nature of the financial hardship expe-
rienced by the borrower or mortgagor and 
whether such hardship is a temporary hardship. 
VerDate Mar 15 2010 
22:53 Apr 19, 2011
Jkt 099200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H1567.IH
H1567
srobinson on DSKHWCL6B1PROD with BILLS
The Director shall, by regulation, define ‘hard-
ship’ and ‘temporary hardship’ for purposes of 
this subsection. 
‘‘(B) 
ACTIONS
BASED
ON
CIR-
CUMSTANCES.—The mortgagee or servicer shall 
provide— 
‘‘(i) priority loss mitigation activities 
with respect to borrowers and mortga-
gees— 
‘‘(I) who cannot make scheduled 
payments due under the loan or other 
payments due to financial hardship; 
and 
‘‘(II) for whom providing such 
loss mitigation activities are con-
sistent with maximizing net present 
value of the loan (as determined in ac-
cordance with subsection (d)(4)); 
‘‘(ii) secondary loss mitigation activi-
ties with respect to borrowers or mortga-
gors who have experienced a change in 
their financial condition that has resulted 
in temporary financial hardship; and 
‘‘(iii) last-resort loss mitigation activi-
ties with respect to borrowers or mortga-
VerDate Mar 15 2010 
01:42 Apr 20, 2011
Jkt 099200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H1567.IH
H1567
srobinson on DSKHWCL6B1PROD with BILLS
gors who, notwithstanding priority or sec-
ondary loss mitigation activities taken with 
respect to the mortgage, will be unable to 
make payments due under the loan. 
‘‘(4) PROHIBITIONS.—A mortgagee or servicer 
with respect to a covered federally related mortgage 
loan— 
‘‘(A) may not limit the number of loss 
mitigation activities provided with respect to a 
borrower or mortgagor if such activities are 
provided in connection with financial hardships 
of differing natures, but may limit the number 
of loss mitigation activities provided with re-
spect to a borrower or mortgagor pursuant to 
recurring financial hardships of the same na-
ture; 
‘‘(B) shall comply with the requirements of 
under this section with respect to the loan with-
out regard to whether there has been a previous 
default under the loan; and 
‘‘(C) initiate foreclosure proceedings while 
simultaneously providing loss mitigation activi-
ties to a borrower or mortgagor; and 
‘‘(D) assess fees for the provision of loss 
mitigation services, notwithstanding the fees 
VerDate Mar 15 2010 
22:53 Apr 19, 2011
Jkt 099200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H1567.IH
H1567
srobinson on DSKHWCL6B1PROD with BILLS