‘‘(e)(1) In this subsection, the term ‘covered mort-
gage’— 
‘‘(A) means any mortgage that is secured by a 
single-family residential property; and 
‘‘(B) includes the promissory note secured by 
the mortgage described in subparagraph (A). 
‘‘(2) The Corporation may not sell or transfer any 
covered mortgage under this section unless the require-
ments of this subsection are met. 
‘‘(3)(A) If the Corporation intends to sell or transfer 
a covered mortgage, the Corporation shall provide the cur-
rent borrower and all owners of record of the property se-
curing the covered mortgage, or require that the current 
borrower and owners of record be provided, a separate 
written notice of the intent to sell the covered mortgage 
that— 
‘‘(i) is mailed via certified and first class mail 
not less than 90 days before the date on which the 
loan is included in any proposed sale; and 
‘‘(ii) includes— 
‘‘(I) a description of the loss mitigation op-
tions of the Corporation that are available to 
borrowers in financial distress and the obliga-
tion of servicers to consider borrowers in de-
fault for those options; 
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‘‘(II) a description of the actions that the 
servicer of the loan has taken to review and im-
plement those options for the borrower; and 
‘‘(III) a description of the procedures the 
borrower may use to contest with the Corpora-
tion the compliance by the servicer with that 
obligation. 
‘‘(B) The Federal Housing Finance Agency, as re-
ceiver for the Corporation, may not sell any covered mort-
gage through any type of non-performing loan sale auction 
program until the Director of the Federal Housing Fi-
nance Agency issues rules, through the notice and com-
ment rule making procedures under section 553 of title 
5, United States Code, that address essential aspects of 
any non-performing loan sale program, including— 
‘‘(i) the method of selection of loans for sale; 
‘‘(ii) notice to borrowers prior to inclusion of 
the loan in a sale; and 
‘‘(iii) review of loss mitigation status prior to 
the sale, selection of eligible bidders, loss mitigation 
guidelines applicable to loan purchasers, and report-
ing requirements for purchasers. 
‘‘(4)(A) Each purchaser of a covered mortgage shall 
offer the borrower on the covered mortgage loss mitigation 
options that allow for payment reduction at least as great 
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as would be available to the borrower if the loan had not 
been sold. 
‘‘(B) The specific formula, calculations, waterfall 
steps, and other terms for loss mitigation options de-
scribed in subparagraph (A) shall be published by the Cor-
poration, made available to the public, and included in a 
written notice given to borrowers before any acceleration 
or foreclosure is initiated after a loan sale. 
‘‘(5) With respect to a transferee, including any sub-
sequent transferee, of a covered mortgage that is sold by 
the Corporation under this section— 
‘‘(A) the transferee shall certify in writing to 
the Corporation that the transferee will comply with 
the provisions of this subsection in the marketing 
and transfer of any property received in the disposi-
tion of any transferred loan; 
‘‘(B) the transferee shall provide to the Cor-
poration records documenting that the transfers of 
those properties are in compliance with this sub-
section; and 
‘‘(C) the failure of the Corporation or the trans-
feree to comply with the requirements under this 
subsection for a loan in default shall be a defense to 
foreclosure, and a transferee may not execute a fore-
closure judgment or order of sale, or conduct a fore-
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closure sale, until the transferee has complied with 
all requirements under this subsection. 
‘‘(6) With respect to covered mortgages that are sold 
by the Corporation under this section and foreclosed upon 
by the buyer, not less than 90 percent of the properties 
that are the subject of the covered mortgages in an auc-
tion shall be— 
‘‘(A) sold to owner-occupants; 
‘‘(B) operated or transferred to an entity that 
will operate the property as affordable rental hous-
ing for households below 80 percent of the area me-
dian income for a period of not less than 15 years; 
or 
‘‘(C) transferred or donated to a nonprofit 
agency that is certified by the Corporation and will 
redevelop the property for owner occupancy or af-
fordable rental housing. 
‘‘(7) The Corporation shall implement policies, proce-
dures, and controls to— 
‘‘(A) identify and recruit community partners; 
‘‘(B) engage in consultations with community 
partners before the sale of a pool of covered mort-
gages under this section to determine whether that 
sale can be designed to meet the specific needs of 
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the communities served by the community partners; 
and 
‘‘(C) prioritize the sale of pools of single-family 
mortgages to community partners by— 
‘‘(i) designing pools of covered mortgages 
for direct sale to a community partner, the 
price of which shall be set by the Corporation 
based on a pricing model that considers— 
‘‘(I) the current fair market value of 
the properties; and 
‘‘(II) the potential impact of fore-
closures on those properties to the value of 
other homes in the same census tract; or 
‘‘(ii) in the case of an auction, if the win-
ning bid is not from a community partner, per-
mitting any community partner that bid during 
that same auction to have a final opportunity to 
enter a higher bid on the pool.’’. 
(e) SALE OF RE-PERFORMING LOANS.—The Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4501 et seq.) is amended by inserting 
after section 1328 (12 U.S.C. 4548) the following: 
‘‘SEC. 1329. SALE OF RE-PERFORMING LOANS. 
‘‘(a) BULK AUCTION OR GROUP SALES.—An enter-
prise may not conduct bulk auctions or other group sales 
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of single family re-performing residential loans unless the 
following requirements are met: 
‘‘(1) The enterprise establishes a system that 
provides priority to Federal, State, local, or Tribal 
governments or nonprofit organizations that have 
the capacity and experience required for buying, 
servicing, and resolving single family mortgage loans 
in a manner that promotes affordable housing, fair 
housing, affordable homeownership, provision of 
housing counseling, or neighborhood stabilization. 
‘‘(2) Clear, written notice is sent by the enter-
prise or servicer through certified and first-class 
mail to the borrower and all owners of record, with 
a copy sent to the enterprise if sent by the servicer, 
not less than 90 days before the inclusion of the 
loan in any proposed sale— 
‘‘(A) stating that the loan will be included 
in a bulk auction or group sale of re-performing 
loans; and 
‘‘(B) describing the bulk auction or group 
sale process, including— 
‘‘(i) the loss mitigation or other pro-
tections available to the borrower and 
other owners of record both before and 
after the auction or sale; and 
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‘‘(ii) the obligations of the servicer of 
the loan before and after the auction or 
sale, including loss mitigation require-
ments. 
‘‘(3) The enterprise requires in the terms of the 
bulk auction or group sale that purchasers take 
loans subject to the following requirements: 
‘‘(A) The purchaser is required to offer 
targeted payment relief options to borrowers 
that become more than 60 days delinquent on 
their mortgage after their loan is sold that in-
cludes deferral of principal and term extension 
options that reduce payments to an affordable 
level. 
‘‘(B) The purchaser is required to offer a 
deferral program to borrowers that become 
more than 60 days delinquent on their mort-
gage after their loan is sold that offers terms 
and protections at least as favorable as those 
available under loss mitigation guidelines of the 
enterprise, including the absence of fees, to bor-
rowers who can afford their pre-hardship mort-
gage payment. 
‘‘(C) Failure by the purchaser to follow the 
established loss mitigation guidelines shall serve 
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as a defense to a judicial foreclosure and a 
basis to enjoin or otherwise stay a non-judicial 
foreclosure. 
‘‘(D) Data reporting as provided under 
subsection (b)(1). 
‘‘(E) If a property becomes vacant, the 
purchaser shall not release the lien until the 
property is sold or donated. 
‘‘(F) Use of contract for deed, lease to 
own, or a land installment contract to sell or 
otherwise transfer any property that is secured 
by a purchased loan shall be prohibited unless 
the tenant or purchaser is a nonprofit organiza-
tion. 
‘‘(b) DATA AND REPORTING.— 
‘‘(1) PURCHASER REPORTING.—During the 4- 
year period following any auction or sale of single 
family re-performing residential mortgage loans 
under subsection (a), the Director shall require the 
enterprise to collect from each purchaser of such 
loans, including any subsequent purchaser of a loan, 
quarterly loan-level data regarding the treatment 
and outcome of the loan, including— 
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‘‘(A) loan characteristics, including loan 
type, remaining loan term, loan to value ratio, 
number of months in arrears, and loan status; 
‘‘(B) loss mitigation data, including wheth-
er loss mitigation was provided by the pur-
chaser, debt-to-income ratio and percent pay-
ment reduction for any modified loans, and per-
formance of modified loans; 
‘‘(C) demographic data for each borrower 
and any co-borrower, including race, national 
origin, sex, ZIP Code, and census tract, and, if 
available, disability status and veteran status; 
and 
‘‘(D) other purchaser actions, including 
charge offs and resales of loans and dates for 
such actions. 
‘‘(2) SEMIANNUAL REPORTS TO CONGRESS.— 
The Director shall submit to Congress, and make 
publicly available at no cost to the public in a readily 
accessible format on the website of the Agency, 
semi-annual reports on— 
‘‘(A) loans sold in an auction or sale under 
subsection (a) by each enterprise, disaggregated 
by pool, including— 
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‘‘(i) the number of loans and types of 
loans; 
‘‘(ii) mean and median delinquency 
and loan to value ratios at the time of the 
sale; 
‘‘(iii) the number and percentage of 
loans modified prior to auction or sale; and 
‘‘(iv) demographic and geographic 
data, including property locations by cen-
sus tract or larger geographic location if 
necessary to protect personally identifiable 
information; 
‘‘(B) the performance of loans after an 
auction 
or 
sale 
under 
subsection 
(a), 
disaggregated by loan pool, including the initial 
purchaser, current owner, current servicer, data 
summarizing any alternatives to foreclosure of-
fered and enacted, and data summarizing the 
data collected under subparagraph (A); and 
‘‘(C) the results of a fair lending analysis 
conducted based on the data in subparagraphs 
(A) and (B) to identify any discriminatory im-
pacts or outcomes associated with the auctions 
or sales. 
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‘‘(c) PENALTIES FOR NONCOMPLIANCE.—The enter-
prises may forcibly retain loans or properties, without pro-
viding compensation, from purchasers that do not meet 
the requirements under subsection (a)(3). 
‘‘(d) REGULATIONS.—The Director shall issue regu-
lations defining the terms of permissible auctions or sales 
in accordance with the requirements in this section.’’. 
TITLE 
II—TAKING 
THE 
FIRST 
STEPS TO REVERSE THE LEG-
ACY OF HOUSING DISCRIMI-
NATION AND GOVERNMENT 
NEGLIGENCE 
SEC. 201. DOWN PAYMENT ASSISTANCE PROGRAM FOR 
FIRST-TIME HOMEBUYERS. 
(a) DEFINITIONS.—In this section: 
(1) ELIGIBLE RESIDENT.—The term ‘‘eligible 
resident’’ means an individual who— 
(A) is a first-time homebuyer; 
(B) is a first-generation homebuyer; and 
(C) has an income that is less than— 
(i) 120 percent of the area median in-
come; or 
(ii) in the case of a homebuyer acquir-
ing a property for use as a principal resi-
dence that is located in a high-cost area, 
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as determined by the Secretary, 140 per-
cent of the area median income. 
(2) 
FIRST-GENERATION
HOMEBUYER.—The 
term ‘‘first-generation homebuyer’’ means a home-
buyer who is, as self-attested by the homebuyer, an 
individual— 
(A) whose parents do not, or did not at the 
time of their death, to the best of the individ-
ual’s knowledge, have any present ownership in-
terest in a principal residence in any State, ex-
cluding ownership of heir property; and 
(B) whose spouse or domestic partner has 
not, during the 3-year period ending on the 
date of purchase of a property using a grant 
under subsection (b), had any present owner-
ship interest in a principal residence in any 
State, excluding ownership of heir property, 
without regard to whether the spouse or domes-
tic partner is a co-borrower on a mortgage for 
the property being purchased. 
(3) FIRST-TIME HOMEBUYER.—The term ‘‘first- 
time homebuyer’’ means a homebuyer who is, as 
self-attested by the homebuyer, an individual (and if 
married or in a domestic partnership, the spouse or 
domestic partner of the individual) who, during the 
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