(i) the person conducting the sale has 
demonstrated that the requirements of this 
subsection have been met with respect to 
the federally related mortgage loan; or 
(ii) the requirements of this sub-
section do not apply to the federally re-
lated mortgage loan. 
(C) VOIDING OF SALE.—A sale of property 
in violation of this subsection is void. 
(D) REGULATIONS.—The Secretary, in 
consultation with the Secretary of the Treasury 
and Director of the Bureau of Consumer Fi-
nancial Protection, shall issue regulations estab-
lishing the content of the certification under 
this subparagraph. 
(7) BAR TO FORECLOSURE.—Failure to comply 
with this subsection is a bar to foreclosure under the 
applicable law of a State. 
(8) RULE OF CONSTRUCTION.—Nothing in this 
subsection may be construed to prevent a covered 
mortgagee from offering or making a loan modifica-
tion with a lower payment, lower interest rate, or 
principal reduction beyond that required by a modi-
fication made using a home loan modification pro-
tocol with respect to a covered mortgagor. 
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(c) FEES PROHIBITED.— 
(1) LOAN MODIFICATION FEES PROHIBITED.— 
A covered mortgagee may not charge a fee to a cov-
ered mortgagor for carrying out the requirements 
under subsection (b). 
(2) FORECLOSURE-RELATED FEES.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B) and (C), a covered mortgagee 
may not charge a foreclosure-related fee to a 
covered mortgagor before— 
(i) the covered mortgagee has made a 
determination under subsection (b)(1); and 
(ii) the mortgage has entered the fore-
closure process. 
(B) 
DELINQUENCY
FEES.—A 
covered 
mortgagee may charge 1 delinquency fee for 
each late payment by a covered mortgagor, if 
the fee is specified by the mortgage agreement 
and permitted by other applicable Federal and 
State law. A delinquency fee may be collected 
only once on an installment however long it re-
mains in default. 
(C) OTHER FEES.—A covered mortgagee 
may charge a covered mortgagor 1 property 
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valuation fee and 1 title search fee in connec-
tion with a foreclosure. 
(3) FEES NOT IN CONTRACT.—A covered mort-
gagee may charge a fee to a covered mortgagor only 
if— 
(A) the fee was specified by the mortgage 
agreement before a modification or amendment; 
and 
(B) the fee is otherwise permitted under 
this subsection. 
(4) FEES FOR EXPENSES INCURRED.— 
(A) IN
GENERAL.—A covered mortgagee 
may charge a fee to a covered mortgagor only— 
(i) for services actually performed by 
the covered mortgagee or a third party in 
relation to the mortgage agreement, before 
a modification or amendment; and 
(ii) if the fee is reasonably related to 
the actual cost of providing the service. 
(B) HOME
PRESERVATION
SERVICES.—A 
covered mortgagee may charge a fee to a cov-
ered mortgagor for home preservation services, 
only if the covered mortgagor has not submitted 
a payment under the federally related mortgage 
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during the 60-day period ending on the date the 
fee is charged. 
(5) FORCEPLACED INSURANCE.— 
(A) FEE PERMITTED.—If a home insur-
ance policy on the real property securing a fed-
erally related mortgage loan lapses due to the 
failure of a covered mortgagor to make a pay-
ment, a covered mortgagee may charge the cov-
ered mortgagor a fee in an amount equal to the 
actual cost of continuing or re-establishing the 
home insurance policy on the same terms in ef-
fect before the lapse. 
(B) RECOVERY OF FEE.—A covered mort-
gagee may recover the fee described in subpara-
graph (A)— 
(i) by establishing an escrow account 
in accordance with section 10 of the Real 
Estate Settlement Procedures Act of 1974 
(12 U.S.C. 2609); or 
(ii) in equal monthly amounts during 
one 12-month period. 
(6) PENALTY.—The Director of the Bureau of 
Consumer Financial Protection shall collect from 
any covered mortgagee that charges a fee in viola-
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tion of this subsection an amount equal to $6,000 
for each such fee. 
(d) REGULATIONS.—Not later than 3 months after 
the date of enactment of this Act, the Secretary, in con-
sultation with the Secretary of the Treasury and the Di-
rector of the Bureau of Consumer Financial Protection, 
shall issue by notice any requirements to carry out this 
section. The Secretary shall subsequently issue, after no-
tice and comment, final regulations to carry out this sec-
tion. 
(e) BUREAU OF CONSUMER FINANCIAL PROTECTION 
HOME LOAN MODIFICATION PROTOCOL.—Not later than 
90 days after the date of enactment of this Act, the Direc-
tor of the Bureau of Consumer Financial Protection shall 
develop a home loan modification protocol. 
(f) TREASURY AND HUD HOME LOAN MODIFICA-
TION PROTOCOLS.—Not later than 90 days after the date 
of enactment of this Act, the Secretary of the Treasury 
and the Secretary shall make any changes to the home 
loan modification protocol of the Secretary of the Treasury 
and the Secretary, respectively, that are necessary to carry 
out this Act. 
SEC. 4. MEDIATION INITIATIVES. 
(a) DEFINITIONS.—In this section— 
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(1) the term ‘‘mortgagee’’ includes the agent of 
a mortgagee; and 
(2) the term ‘‘mediation’’ means a process in 
which a neutral third party presides over discussions 
between mortgagors and mortgagees to review and 
discuss available loss mitigation options in order to 
avoid foreclosure. 
(b) GRANT PROGRAM ESTABLISHED.—The Secretary 
shall establish a grant program to make competitive 
grants to State and local governments to establish medi-
ation programs that assist mortgagors facing foreclosure. 
(c) MEDIATION PROGRAMS.—A mediation program 
established using a grant under this section shall— 
(1) require participation in the program by— 
(A) any mortgagee that seeks to initiate or 
has initiated a judicial or nonjudicial fore-
closure; and 
(B) any mortgagor who is subject to a ju-
dicial or nonjudicial foreclosure; 
(2) require that a representative of the mort-
gagee who has authority to decide on loss mitigation 
options (including loan modification) participate, in 
person, in scheduled sessions; 
(3) require any mortgagee or mortgagor re-
quired to participate in the program to make a good 
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faith effort to resolve promptly, through mediation, 
issues relating to the default on the mortgage; 
(4) if mediation is not made available to the 
mortgagor before a foreclosure proceeding is initi-
ated, allow the mortgagor to request mediation at 
any time before a foreclosure sale; 
(5) provide that any proceeding to foreclose 
that is initiated by the mortgagee shall be stayed 
until the mediator has issued a written certification 
that the mortgagee complied in good faith with its 
obligations under the mediation program established 
under this section; 
(6) provide for— 
(A) supervision by a State court (or a 
State court in conjunction with an agency or 
department of a State or local government) of 
the mediation program; 
(B) selection and training of neutral, third- 
party mediators by a State court (or an agency 
or department of the State or local govern-
ment); 
(C) penalties to be imposed by a State 
court, or an agency or department of a State or 
local government, if a mortgagee fails to comply 
with an order to participate in mediation; and 
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(D) consideration by a State court (or an 
agency or department of a State or local gov-
ernment) of recommendations by a mediator re-
lating to penalties for failure to fulfill the re-
quirements of the mediation program; 
(7) require that each mortgagee that partici-
pates in the mediation program make available to 
the mortgagor, before and during participation in 
the mediation program, documentation of— 
(A) a loan modification calculation or net 
present value calculation, including the informa-
tion necessary to verify and evaluate the cal-
culation, made by the mortgagee in relation to 
the mortgage using a home loan modification 
protocol; 
(B) the loan origination, including any 
note, deed of trust, or other document nec-
essary to establish the right of the mortgagee to 
foreclose on the mortgage, including proof of 
assignment of the mortgage to the mortgagee 
and the right of the mortgagee to enforce the 
relevant note under the law of the State in 
which the real property securing the mortgage 
is located; 
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(C) any pooling and servicing agreement 
that the mortgagee believes prohibits a loan 
modification; 
(D) the payment history of the mortgagor 
and a detailed accounting of any costs or fees 
associated with the account of the mortgagor; 
and 
(E) the specific alternatives to foreclosure 
considered by the mortgagee, including loan 
modifications, workout agreements, and short 
sales; 
(8) prohibit a mortgagee from shifting the costs 
of participation in the mediation program, including 
the attorney’s fees of the mortgagee, to a mortgagor; 
(9) provide that— 
(A) any holder of a junior lien against the 
property that secures a mortgage that is the 
subject of a mediation— 
(i) be notified of the mediation; and 
(ii) be permitted to participate in the 
mediation; and 
(B) any proceeding initiated by a holder of 
a junior lien against the property that secures 
a mortgage that is the subject of a mediation 
be stayed pending the mediation; 
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(10) provide information to mortgagors about 
housing counselors approved by the Secretary; and 
(11) be free of charge to the mortgagor and 
mortgagee. 
(d) RECORDKEEPING.—A State or local government 
that receives a grant under this section shall keep a record 
of the outcome of each mediation carried out under the 
mediation program, including the nature of any loan modi-
fication made as a result of participation in the mediation 
program. 
(e) TARGETING.—A State that receives a grant under 
this section may establish— 
(1) a statewide mediation program; or 
(2) a mediation program in a specific locality 
that the State determines has a high need for such 
program due to— 
(A) the number of foreclosures in the local-
ity; or 
(B) other characteristics of the locality 
that contribute to the number of foreclosures in 
the locality. 
(f) FEDERAL SHARE.—The Federal share of the cost 
of a mediation program established using a grant under 
this section may not exceed 50 percent. 
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(g) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
such sums as may be necessary for each of fiscal years 
2011 through 2014. 
SEC. 5. OVERSIGHT OF PUBLIC AND PRIVATE EFFORTS TO 
REDUCE MORTGAGE DEFAULTS AND FORE-
CLOSURES. 
(a) DEFINITIONS.—In this section— 
(1) the term ‘‘heads of appropriate agencies’’ 
means the Comptroller of the Currency, the Board 
of Governors of the Federal Reserve System, the 
Federal Deposit Insurance Corporation, the National 
Credit Union Administration, the Director of the 
Bureau of Consumer Financial Protection, the Di-
rector of the Office of Financial Research of the De-
partment of the Treasury, and a representative of 
State banking regulators selected by the Secretary; 
(2) the term ‘‘mortgagee’’ means— 
(A) an original lender under a mortgage; 
(B) any servicers, affiliates, agents, sub-
sidiaries, successors, or assignees of an original 
lender; and 
(C) any subsequent purchaser, trustee, or 
transferee of any mortgage or credit instrument 
issued by an original lender; and 
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(3) the term ‘‘servicer’’ means any person who 
collects on a home loan, whether such person is the 
owner, the holder, the assignee, the nominee for the 
loan, or the beneficiary of a trust, or any person act-
ing on behalf of such person. 
(b) MONITORING OF HOME LOANS.— 
(1) IN GENERAL.—The Secretary, in consulta-
tion with the heads of appropriate agencies, shall de-
velop and implement a plan to monitor— 
(A) conditions and trends in homeowner-
ship and the mortgage industry, in order to pre-
dict trends in foreclosures to better understand 
other critical aspects of the mortgage market; 
and 
(B) the effectiveness of public and private 
efforts to reduce mortgage defaults and fore-
closures. 
(2) REPORT TO CONGRESS.—Not later than 1 
year after the development of the plan under para-
graph (1), and each year thereafter, the Secretary 
shall submit a report to Congress that— 
(A) summarizes and describes the findings 
of the monitoring required under paragraph 
(1); and 
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(B) includes recommendations or proposals 
for legislative or administrative action nec-
essary— 
(i) to increase the authority of the 
heads of appropriate agencies to levy pen-
alties against any mortgagee, or other per-
son or entity, who fails to comply with the 
requirements described in this section; 
(ii) to improve coordination between 
public and private initiatives to reduce the 
overall rate of mortgage defaults and fore-
closures; and 
(iii) to improve coordination between 
initiatives undertaken by Federal, State, 
and local governments. 
SEC. 6. HOUSING TRUST FUND. 
From funds received or to be received by the Sec-
retary of the Treasury from the sale of warrants under 
title I of the Emergency Economic Stabilization Act of 
2008 (12 U.S.C. 5211 et seq.), the Secretary of the Treas-
ury shall transfer and credit $1,000,000,000 to the Hous-
ing Trust Fund established under section 1338 of the 
Federal Housing Enterprises Financial Safety and Sound-
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