(A) means a course of action with respect 
to a mortgage offered by a servicer to a bor-
rower as an alternative to a covered foreclosure 
action; and 
(B) includes a short sale and a deed in lieu 
of foreclosure. 
(2) BORROWER.—The term ‘‘borrower’’ means 
a mortgagor under a mortgage who is in default or 
at risk of imminent default, as determined by the 
Secretary through regulations. 
(3) FORECLOSURE ACTION.—The term ‘‘fore-
closure action’’ means a judicial or nonjudicial fore-
closure. 
(4) LOAN MODIFICATION PROGRAM.—The term 
‘‘loan modification program’’ means a program or 
procedure designed to change the terms of a mort-
gage in the case of the default, delinquency, or im-
minent default or delinquency of a mortgagor, in-
cluding a loan modification program established by 
a servicer that reduces the principal owed by the 
mortgagor on the mortgage. 
(5) MORTGAGE.—The term ‘‘mortgage’’ means 
a federally related mortgage loan, as defined in sec-
tion 3(1) of the Real Estate Settlement Procedures 
Act of 1974 (12 U.S.C. 2602(1)), that is secured by 
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a first or subordinate lien on residential real prop-
erty. 
(6) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Housing and Urban Development. 
(7) SERVICER.—The term ‘‘servicer’’— 
(A) has the same meaning as in section 
6(i) of the Real Estate Settlement Procedures 
Act of 1974 (12 U.S.C. 2605(i)); and 
(B) includes a person responsible for serv-
icing a pool of mortgages. 
SEC. 3. MEDIATION REQUIRED BEFORE FORECLOSURE. 
(a) INITIATION
OF
FORECLOSURE
ACTIONS.—A 
servicer may not initiate a foreclosure action against a 
borrower unless the servicer has— 
(1) made a reasonable effort to initiate medi-
ation proceedings in accordance with the process es-
tablished in regulations prescribed pursuant to sub-
section (c) to determine whether the borrower is eli-
gible for a loan modification or an alternative to 
foreclosure; and 
(2) offered the borrower a loan modification or 
an alternative to foreclosure, if the borrower is eligi-
ble for the loan modification or alternative to fore-
closure. 
(b) SUSPENSION OF FORECLOSURE ACTIONS.— 
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(1) IN GENERAL.—A servicer shall suspend a 
foreclosure action that was initiated before the date 
of enactment of this Act until the servicer— 
(A) completes a mediation proceeding in 
accordance with the process established in regu-
lations prescribed pursuant to subsection (c) to 
determine whether the borrower is eligible for a 
loan modification or an alternative to fore-
closure; and 
(B) offers the borrower a loan modification 
or an alternative to foreclosure, if the borrower 
is eligible for a loan modification or an alter-
native to foreclosure. 
(2) SUSPENSION.—During the period of the 
suspension under paragraph (1), a servicer may 
not— 
(A) send a notice of foreclosure to a bor-
rower; 
(B) conduct or schedule a sale of the real 
property securing the mortgage of the borrower; 
or 
(C) cause final judgment to be entered 
against the borrower. 
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