I
106TH CONGRESS
1ST SESSION
H. R. 3492
To amend the Fair Debt Collection Practices Act to exempt mortgage
servicers from certain requirements of the Act with respect to federally
related mortgage loans secured by a first lien, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 18, 1999
Mr. ROYCE (for himself, Mr. BENTSEN, Mr. JONES of North Carolina, and
Mr. METCALF) introduced the following bill; which was referred to the
Committee on Banking and Financial Services
A BILL
To amend the Fair Debt Collection Practices Act to exempt
mortgage servicers from certain requirements of the Act
with respect to federally related mortgage loans secured
by a first lien, 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 ‘‘Residential Loan Serv-
icing Clarification Act’’.
SEC. 2. RESIDENTIAL LOAN SERVICING CLARIFICATION.
(a) IN GENERAL.—The Fair Debt Collection Prac-
tices Act (15 U.S.C. 1692 et seq.) is amended—
(1) by redesignating section 818 as section 819;
and
(2) by inserting after section 817 the following
new section:
‘‘§ 818. Mortgage servicer exemption
‘‘(a) EXEMPTION.—Any servicer of federally related
mortgage loans secured by first liens—
‘‘(1) who is a debt collector; and
‘‘(2) for whom the collection of delinquent debts
is secondary to the servicer’s primary function of
servicing federally related mortgage loans,
shall be exempt from the requirements of sections 807(11)
and 809 in connection with the collection of any debt
which is a federally related mortgage loan secured by a
first lien.
‘‘(b) VALIDATION STATEMENT.—If a debt collector is
exempt, pursuant to subsection (a), from the requirements
of section 809 with respect to any federally related mort-
gage loan to a consumer which is secured by a first lien,
the servicer shall provide to the consumer, at least 30 days
before any acceleration of the debt and without charge to
such consumer—
‘‘(A) a notice of the consumer’s right to re-
ceive a validation statement; or
‘‘(B) a validation statement.
‘‘(2) QUALIFIED VALIDATION REQUESTS.—
‘‘(A) 
RESPONSE
TO
REQUEST.—If 
a
servicer described in paragraph (1) provides a
consumer with a notice under subparagraph (A)
of such paragraph, the servicer shall provide
such consumer with a validation statement not
more than 10 days after receiving a qualified
validation request from such consumer.
‘‘(B) NO DELAY REQUIRED.—No provision
of this title shall be construed as requiring a
servicer described in paragraph (1) to delay ac-
celeration, foreclosure, or any other action with
respect to a federally related mortgage loan for
which the servicer provided a notice to the con-
sumer under paragraph (1)(A) due to the re-
ceipt by such servicer of a qualified validation
request from such consumer.
‘‘(C) RECEIPT
AND
HANDLING
OF
RE-
QUESTS.—A servicer described in paragraph (1)
may establish a separate and exclusive office for
the receipt and handling of any qualified valida-
tion request from any consumer under this sub-
section if the servicer provides notice of that
fact and the address of the office to the
consumer—
‘‘(i) in the notice provided to such
consumer pursuant to paragraph (1)(A); or
‘‘(ii) separately by 1st class mail with
prepaid postage.
‘‘(3) REASONABLE
ESTIMATES
OF
3D
PARTY
CHARGES.—A servicer described in paragraph (1)
shall not be liable under this title for any inaccurate
amount contained in a validation statement provided
to a consumer with respect to a federally related
mortgage loan secured by a first lien to the extent
the inaccurate amount—
‘‘(A) relates to costs for services to be pro-
vided by third parties; and
‘‘(B) constitutes a reasonable estimate of
such costs.
‘‘(c) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
‘‘(1) FEDERALLY RELATED MORTGAGE LOAN.—
The term ‘federally related mortgage loan’ has the
meaning given to such term in section 3(1) of the
Real Estate Settlement Procedures Act of 1974.
‘‘(2) QUALIFIED
VALIDATION
REQUEST.—The
term ‘qualified validation request’ means a written
request for a validation statement from a consumer
to a servicer which—
‘‘(A) includes the name and account num-
ber of the consumer or such other information
as may be necessary to allow the servicer to
identify such name and account number; and
‘‘(B) is not written on or otherwise in-
cluded with a payment coupon or other pay-
ment medium provided by the servicer.
‘‘(3) 
SERVICER; 
SERVICING.—The 
terms
‘servicer’ and ‘servicing’ have the meanings given to
such terms in section 6(i) of the Real Estate Settle-
ment Procedures Act of 1974.
‘‘(4) VALIDATION STATEMENT.—The term ‘vali-
dation statement’ means a statement of—
‘‘(A) the total amount a consumer must
pay, as of a particular date, to bring the con-
sumer’s loan current; and
‘‘(B) the total amount a consumer must
pay, as of a particular date, to satisfy the loan
in full.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for the Fair Debt Collection Practices Act (15 U.S.C.
1692 et seq.) is amended—
(1) by redesignating the item relating to section
818 as section 819; and
(2) by inserting after the item relating to sec-
tion 817 the following new item:
‘‘818. Mortgage servicer exemption.’’.
Æ