I 
111TH CONGRESS 
1ST SESSION 
H. R. 788 
To provide a safe harbor for mortgage servicers who engage in specified 
mortgage loan modifications, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 2, 2009 
Mr. KANJORSKI (for himself, Mr. CASTLE, and Mr. FRANK of Massachusetts) 
introduced the following bill; which was referred to the Committee on Fi-
nancial Services 
A BILL 
To provide a safe harbor for mortgage servicers who engage 
in specified mortgage loan modifications, 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. SERVICER SAFE HARBOR. 
(a) SAFE HARBOR.— 
(1) LOAN
MODIFICATIONS
AND
WORKOUT 
PLANS.—Notwithstanding any other provision of 
law, and notwithstanding any investment contract 
between a servicer and a securitization vehicle or in-
vestor, a servicer that acts consistent with the duty 
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set forth in section 129A(a) of Truth in Lending Act 
(15 U.S.C. 1639a) shall not be liable for entering 
into a loan modification or workout plan with re-
spect to any such mortgage that meets all of the cri-
teria set forth in paragraph (2)(B) to— 
(A) any person, based on that person’s 
ownership of a residential mortgage loan or any 
interest in a pool of residential mortgage loans 
or in securities that distribute payments out of 
the principal, interest and other payments in 
loans on the pool; 
(B) any person who is obligated to make 
payments determined in reference to any loan 
or any interest referred to in subparagraph (A); 
or 
(C) any person that insures any loan or 
any interest referred to in subparagraph (A) 
under any law or regulation of the United 
States or any law or regulation of any State or 
political subdivision of any State. 
(2) ABILITY TO MODIFY MORTGAGES.— 
(A) ABILITY.—Notwithstanding any other 
provision of law, and notwithstanding any in-
vestment contract between a servicer and a 
securitization vehicle or investor, a servicer— 
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(i) shall not be limited in the ability 
to modify mortgages, the number of mort-
gages that can be modified, the frequency 
of loan modifications, or the range of per-
missible modifications; and 
(ii) shall not be obligated to repur-
chase loans from or otherwise make pay-
ments to the securitization vehicle on ac-
count of a modification, workout, or other 
loss mitigation plan for a residential mort-
gage or a class of residential mortgages 
that constitute a part or all of the mort-
gages in the securitization vehicle, 
if any mortgage so modified meets all of the cri-
teria set forth in subparagraph (B). 
(B) CRITERIA.—The criteria under this 
subparagraph with respect to a mortgage are as 
follows: 
(i) Default on the payment of such 
mortgage has occurred or is reasonably 
foreseeable. 
(ii) The property securing such mort-
gage is occupied by the mortgagor of such 
mortgage. 
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(iii) The servicer reasonably and in 
good faith believes that the anticipated re-
covery on the principal outstanding obliga-
tion of the mortgage under the particular 
modification or workout plan or other loss 
mitigation action will exceed, on a net 
present value basis, the anticipated recov-
ery on the principal outstanding obligation 
of the mortgage to be realized through 
foreclosure. 
(3) 
APPLICABILITY.—This 
subsection 
shall 
apply only with respect to modifications, workouts, 
and other loss mitigation plans initiated before Jan-
uary 1, 2012. 
(b) REPORTING.—Each servicer that engages in loan 
modifications or workout plans subject to the safe harbor 
in subsection (a) shall report to the Secretary on a regular 
basis regarding the extent, scope and results of the 
servicer’s modification activities. The Secretary shall pre-
scribe regulations specifying the form, content, and timing 
of such reports. 
(c) DEFINITION OF SECURITIZATION VEHICLES.— 
For purposes of this section, the term ‘‘securitization vehi-
cle’’ means a trust, corporation, partnership, limited liabil-
ity entity, special purpose entity, or other structure that— 
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(1) is the issuer, or is created by the issuer, of 
mortgage pass-through certificates, participation cer-
tificates, mortgage-backed securities, or other similar 
securities backed by a pool of assets that includes 
residential mortgage loans; and 
(2) holds such mortgages. 
Æ 
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