I 
112TH CONGRESS 
1ST SESSION H. R. 1477 
To require certain mortgagees to evaluate loans for modifications, to establish 
a grant program for State and local government mediation programs, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 12, 2011 
Mr. CUMMINGS (for himself, Mr. CLARKE of Michigan, Mr. MILLER of North 
Carolina, Mr. GEORGE MILLER of California, Mr. CLAY, Ms. BERKLEY, 
Ms. ESHOO, Ms. WOOLSEY, Mr. WELCH, Ms. SPEIER, Mr. GARAMENDI, 
Ms. BROWN of Florida, Ms. NORTON, Mr. TIERNEY, Mr. GRIJALVA, Mr. 
HINCHEY, Ms. EDWARDS, Mr. HOLT, Mr. CICILLINE, Ms. MOORE, Ms. 
SUTTON, Ms. SCHAKOWSKY, Mr. HASTINGS of Florida, and Mr. AL 
GREEN of Texas) introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To require certain mortgagees to evaluate loans for modifica-
tions, to establish a grant program for State and local 
government mediation programs, 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 ‘‘Preserving Homes and 
Communities Act of 2011’’. 
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SEC. 2. DEFINITION. 
In this Act, the term ‘‘Secretary’’ means the Sec-
retary of Housing and Urban Development. 
SEC. 3. LOAN MODIFICATION REQUIREMENTS. 
(a) DEFINITIONS.—In this section— 
(1) the term ‘‘covered mortgagee’’ means— 
(A) an original lender under a federally re-
lated mortgage loan; 
(B) any servicer, affiliate, agent, sub-
sidiary, successor, or assignee of a lender under 
a federally related mortgage loan; and 
(C) any purchaser, trustee, or transferee of 
any mortgage or credit instrument issued by an 
original lender under a federally related mort-
gage loan; 
(2) the term ‘‘covered mortgagor’’— 
(A) means an individual— 
(i) who— 
(I) is a mortgagor under a feder-
ally related mortgage loan— 
(aa) made by a covered 
mortgagee; and 
(bb) secured by the principal 
residence of the mortgagor; or 
(II) is eligible to assume a feder-
ally related mortgage loan described 
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in clause (I) in a manner described in 
paragraph (3), (5), (6), or (7) of sec-
tion 341(d) of the Garn-St Germain 
Depository Institutions Act of 1982 
(12 U.S.C. 1701j–3(d)), if the prin-
cipal residence of the individual is the 
principal residence securing the feder-
ally related mortgage loan; and 
(ii) who cannot make payments on a 
federally related mortgage loan due to fi-
nancial hardship, as determined by the 
Secretary, in consultation with the Sec-
retary of the Treasury and the Director of 
the Bureau of Consumer Financial Protec-
tion; and 
(B) does not include an individual who the 
Secretary, in consultation with the Secretary of 
the Treasury and the Director of the Bureau of 
Consumer Financial Protection, determines has 
abandoned the principal residence securing the 
federally related mortgage loan; 
(3) the term ‘‘federally related mortgage loan’’ 
has the same meaning as in section 3 of the Real 
Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2602); 
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(4) the term ‘‘home loan modification protocol’’ 
means a home loan modification protocol that— 
(A) is developed under a home loan modi-
fication program developed or put into effect by 
the Secretary of the Treasury, the Secretary, or 
the Director of the Bureau of Financial Protec-
tion; 
(B) includes principal reduction; and 
(C) to the extent possible, in the case of 
real property on which there is a first lien and 
a subordinate lien securing a federally related 
mortgage loan, requires that any principal re-
duction with respect to the first lien be accom-
panied by a proportional principal reduction 
with respect to the subordinate lien; 
(5) the term ‘‘qualified loan modification’’ 
means a modification to the terms of a mortgage 
agreement between a covered mortgagee and a cov-
ered mortgagor that— 
(A) is made pursuant to a determination 
by the covered mortgagee using a home loan 
modification 
protocol 
that 
a 
modification 
would— 
(i) produce a greater net present value 
than not modifying the loan to— 
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(I) the covered mortgagee; or 
(II) in the aggregate, all persons 
that hold an interest in the mortgage 
agreement; and 
(ii) produce mortgage payments that, 
at a minimum, are reduced to an afford-
able and sustainable amount, based on a 
debt-to-income ratio that takes into ac-
count the total housing debt and gross 
household income of the covered mort-
gagor; 
(B) applies for the remaining term of the 
original mortgage agreement, prior to modifica-
tion or amendment; and 
(C) permits the maximum amount of prin-
cipal reduction that produces a greater net 
present value than foreclosure to the persons 
described in subparagraph (A)(i); and 
(6) the term ‘‘State’’ means any State of the 
United States, the District of Columbia, any terri-
tory of the United States, Puerto Rico, Guam, 
American Samoa, the Trust Territory of the Pacific 
Islands, the Virgin Islands, and the Northern Mar-
iana Islands. 
(b) LOAN MODIFICATION PROCEDURES.— 
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(1) INITIATION OF FORECLOSURE.—A covered 
mortgagee may not initiate a nonjudicial foreclosure 
or a judicial foreclosure against a covered mortgagor 
that is otherwise authorized under State law un-
less— 
(A) the covered mortgagee has used its 
best efforts to determine whether the covered 
mortgagor is eligible for a qualified loan modi-
fication; 
(B) in the case of a covered mortgagor 
who the covered mortgagee determines is eligi-
ble for a qualified loan modification, the covered 
mortgagee has used its best efforts to promptly 
offer a qualified loan modification to the cov-
ered mortgagor; and 
(C) in the case of a covered mortgagor who 
the covered mortgagee determines is not eligible 
for a qualified loan modification, the covered 
mortgagee has made available to the covered 
mortgagor documentation of— 
(i) a loan modification calculation or 
net present value calculation, including the 
information necessary to verify and evalu-
ate the calculation, made by the covered 
mortgagee in relation to the federally re-
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lated mortgage using a home loan modi-
fication protocol; 
(ii) the loan origination, including any 
note, deed of trust, or other document nec-
essary to establish the right of the mort-
gagee to foreclose on the mortgage, includ-
ing proof of assignment of the mortgage to 
the mortgagee and the right of the mort-
gagee to enforce the relevant note under 
the law of the State in which the real prop-
erty securing the mortgage is located; 
(iii) any pooling and servicing agree-
ment that the covered mortgagee believes 
prohibits a qualified loan modification; 
(iv) the payment history of the cov-
ered mortgagor and a detailed accounting 
of any costs or fees associated with the ac-
count of the covered mortgagor; and 
(v) the specific alternatives to fore-
closure considered by the covered mort-
gagee, including qualified loan modifica-
tions, workout agreements, and short sales. 
(2) FORECLOSURE IN PROGRESS.—If a covered 
mortgagee initiated a nonjudicial foreclosure or a ju-
dicial foreclosure proceeding against a covered mort-
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gagor before the date of enactment of this Act, the 
covered mortgagee— 
(A) shall use its best efforts to take all 
steps necessary to— 
(i) suspend the foreclosure or fore-
closure proceeding, as permitted under the 
law of the State in which the real property 
securing the federally related mortgage 
loan is located, including the cancellation 
of any sale date that has been scheduled 
with respect to the real property securing 
the federally related mortgage loan; and 
(ii) toll any deadlines limiting the 
rights of the covered mortgagor, whether 
imposed by statute, scheduling order, or 
otherwise, until the covered mortgagee has 
complied with the requirements under this 
section; and 
(B) may not— 
(i) conduct or schedule a sale of the 
real property securing the federally related 
mortgage loan; or 
(ii) cause judgment to be entered 
against the covered mortgagor. 
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(3) REEVALUATION
OF
APPLICATION
FOR 
QUALIFIED LOAN MODIFICATION.—If, after receiving 
information under paragraph (1)(C), a covered 
mortgagor is able to demonstrate that the covered 
mortgagor is eligible for a qualified loan modifica-
tion, the covered mortgagee shall— 
(A) promptly reevaluate the application by 
the covered mortgagor for a qualified loan 
modification; and 
(B) if the covered mortgagor is eligible, 
offer the covered mortgagor a qualified loan 
modification. 
(4) DISPUTE RESOLUTION.—Not later than 90 
days after the date of enactment of this Act, the 
Secretary of the Treasury, the Secretary, and the 
Director of the Bureau of Financial Protection shall 
ensure that any home loan modification protocol es-
tablished by the Secretary of the Treasury, the Sec-
retary, or the Director of the Bureau of Financial 
Protection, respectively, includes a procedure with a 
neutral third party to resolve disputes between cov-
ered mortgagors and covered mortgagees regarding 
applications for qualified loan modifications. 
(5) NO WAIVER OF RIGHTS.—A covered mort-
gagee may not require a covered mortgagor to waive 
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any right of the covered mortgagor as a condition of 
making a qualified loan modification. 
(6) CERTIFICATION REQUIRED PRIOR TO SALE 
OF REAL PROPERTY SECURING MORTGAGE.— 
(A) CERTIFICATION.—A covered mort-
gagee shall submit to the appropriate State en-
tity in the State in which the real property se-
curing a federally related mortgage loan is lo-
cated a certification that the covered mortgagee 
has complied with all requirements of this sec-
tion, before— 
(i) the covered mortgagee may sell the 
real property; or 
(ii) a purchaser at sale may file an ac-
tion to recover possession of the real prop-
erty. 
(B) RECORDATION OF DEED PROHIBITED 
WITHOUT CERTIFICATION.—The government of-
ficial responsible for recording deeds and other 
transfers of real property in a jurisdiction may 
not permit the recordation of a deed transfer-
ring title after a foreclosure relating to a feder-
ally related mortgage loan in the jurisdiction 
unless the government official certifies that— 
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