I 
108TH CONGRESS 
1ST SESSION H. R. 1357
To establish a program to assist homeowners experiencing unavoidable, tem-
porary difficulty making payments on mortgages insured under the Na-
tional Housing Act. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 19, 2003
Mr. FATTAH introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To establish a program to assist homeowners experiencing 
unavoidable, temporary difficulty making payments on 
mortgages insured under the National Housing Act.
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 ‘‘Homeowners’ Emer-
gency Mortgage Assistance Act’’. 
SEC. 2. MORTGAGE EMERGENCY ASSISTANCE PROGRAM. 
(a) IN GENERAL.—The Secretary shall establish a 
program to make payments on a mortgage insured under
the National Housing Act for a 1- to 4-family residence 
when—
(1) the mortgagee has given the mortgagor no-
tice in accordance with section 3(b) that it intends 
to foreclose the mortgage; 
(2) at least 2 full monthly installments due on 
the mortgage are unpaid after the application of any 
partial payments that may have been accepted but 
not yet applied to the mortgage account; 
(3) the mortgagor is suffering financial hard-
ship due to circumstances beyond the control of the 
mortgagor which render the mortgagor unable to 
correct the delinquency on the mortgage and unable 
to make full mortgage payments before the expira-
tion of the 60-day period beginning on the date that 
notice was sent to the mortgagor in accordance with 
section 3(b); 
(4) there is a reasonable prospect that the 
mortgagor will be able to resume full mortgage pay-
ments not later than 36 months after the beginning 
of the period for which assistance payments are pro-
vided and to pay the mortgage in full by its maturity 
date or by a later date agreed upon by the mort-
gagee;
(5) the property mortgaged is the mortgagor’s 
principal place of residence; 
(6) the mortgagor does not own other property 
which is subject to a mortgage insured or held by 
the Secretary; 
(7) the mortgagor has applied to the Secretary 
for assistance in accordance with section 4; and 
(8) the mortgagor has not been more than 60 
days in arrears on a residential mortgage within the 
2-year period preceding the delinquency for which 
assistance is requested, unless the mortgagor can 
demonstrate that the prior delinquency was the re-
sult of financial hardship due to circumstances be-
yond the control of the mortgagor. 
(b) EFFECT
OF FINDING
OF INELIGIBILITY.—If, 
after reviewing an application for assistance submitted in 
accordance with section 4, the Secretary determines that 
the mortgagor has not met the conditions of eligibility de-
scribed in subsection (a), the mortgagor shall be prohib-
ited from reapplying for assistance under this Act until 
the expiration of the 6-month period beginning on the date 
of such determination unless there is a material change 
in the financial circumstances of the mortgagor. 
(c) DETERMINATION
RELATING
TO
FINANCIAL 
HARDSHIP.—In determining whether a financial hardship
(which may be caused by a reduction in income or an in-
crease in expenses, or both) is due to circumstances be-
yond the control of a mortgagor, the Secretary may con-
sider information regarding the mortgagor’s employment 
record, credit history, and current income. Such cir-
cumstances shall include, but not be limited to—
(1) loss of job of a member of the household; 
(2) salary, wage or earnings reduction of a 
member of the household; 
(3) injury, disability or illness of a member of 
the household; 
(4) divorce or separation in the household; or 
(5) death of a member of the household. 
(d) HOUSING COUNSELING AGENCIES.—The Sec-
retary shall designate and approve nonprofit housing 
counseling agencies in each State to be available to assist 
the Secretary in implementing the program established 
pursuant to subsection (a) of this section and to section 
4(b)(1)(A). Nonprofit housing agencies designated and ap-
proved under this subsection shall provide assistance to 
an eligible mortgagor during the entire period that such 
mortgagor receives assistance under this Act. 
SEC. 3. LEGAL ACTION. 
(a) CONDITIONS UNDER WHICH LEGAL ACTION IS 
PROHIBITED.—Except as otherwise provided in the Act,
a mortgagee of a mortgage which is insured under the Na-
tional Housing Act for a 1- to 4-family residence may not 
accelerate the maturity of or commence any legal action 
regarding such a mortgage (including, but not limited to, 
mortgage foreclosure to recover under such obligation) or 
take possession of any security of the mortgagor for such 
mortgage obligation unless the mortgagee has sent to the 
mortgagor notice pursuant to subsection (b). In addition, 
the mortgagee may not take such action—
(1) before the expiration of the 30-day period 
beginning on the date that notice of the intent to 
take such action was sent to the mortgagor in ac-
cordance with subsection (b); 
(2) before the expiration of the 30-day period 
beginning on the date of the initial meeting between 
the mortgagor and an approved counseling agency 
held in accordance with section 4(a); 
(3) if an application for such assistance under 
this Act has been submitted to the Secretary on be-
half of the mortgagor and such application—
(A) is pending; or 
(B) has been approved but payments have 
not yet been made toward the mortgage; or 
(4) if payment toward the mortgage is being 
made under this Act.
(b) REQUIREMENTS
OF NOTICE.—The Secretary 
shall issue regulations that include, but are not limited 
to, a uniform notice under this section. Such notice shall 
be in plain language and shall—
(1) inform the mortgagor in large bold type 
that he or she may be eligible for temporary assist-
ance in making mortgage payments; 
(2) include an explanation of the mortgage as-
sistance program under this Act; 
(3) inform the mortgagor that to apply for 
mortgage assistance, he or she shall attend a meet-
ing in accordance with section 4(a) within 30 days 
of the date of the notice; 
(4) include the legal action intended and the 
basis therefore; 
(5) include a list of approved counseling agen-
cies located in the State in which the mortgagor re-
sides; 
(6) be sent via first class mail to the last known 
address of the mortgagor; and 
(7) be subject to such other requirements as 
prescribed by the Secretary. 
SEC. 4. APPLICATION FOR ASSISTANCE. 
(a) MEETING.—
the mortgage, or the full amount of any alternative mort-
gage payments agreed to by the mortgagee and mortgagor 
on the date that the application is approved by the Sec-
retary. This amount shall include the amount of principal, 
interest, taxes, assessments, ground rents, hazard insur-
ance, any mortgage insurance or credit insurance pre-
miums, and reasonable attorneys’ fees incurred by such 
mortgagee in relation to the arrearage. 
(b) MONTHLY ASSISTANCE PAYMENTS.—
(1) IN GENERAL.—The Secretary shall make 
monthly mortgage assistance payments to the mort-
gagee on behalf of the mortgagor pursuant to this 
Act. 
(2) OBLIGATION
OF
THE
MORTGAGOR.—A 
mortgagor on whose behalf the Secretary is making 
the mortgage assistance payments shall pay monthly 
payments to the Secretary. Such payments shall be 
in an amount which will cause the mortgagor’s total 
housing expense not to exceed 35 percent of the 
mortgagor’s net effective income. This shall be the 
maximum amount the mortgagor can be required to 
pay during the 36 months a mortgagor is eligible for 
mortgage assistance. 
(3) OBLIGATION
OF
THE
SECRETARY.—Upon 
receipt of this payment from the mortgagor, the Sec-
retary or the Secretary’s duly authorized agent shall 
send the total mortgage payment directly to the 
mortgagee. 
(c) REVIEW UPON DELINQUENCY.—If the mortgagor 
fails to pay to the Secretary any amounts due directly 
from the mortgagor under this section not later than 15 
days after such due date, the Secretary or its designated 
agent shall review the mortgagor’s financial circumstances 
to determine whether a delinquency in payments due from 
the mortgagor under this section or section 6 is the result 
of a change in the mortgagor’s financial circumstances 
since the payment amount was last determined. If the de-
linquency is not the result of a change in the mortgagor’s 
financial circumstances, the Secretary shall terminate fu-
ture mortgage assistance payments and the mortgagee 
may, at any time thereafter, take any legal action to en-
force its mortgage without any further restriction or re-
quirement. If the delinquency is the result of such a 
change, the Secretary shall modify the mortgagor’s re-
quired payments to the Secretary as the Secretary shall 
determine. 
(d) PERIOD FOR ASSISTANCE.—Payments under this 
Act shall be provided for a period not to exceed 36 months, 
either consecutively or nonconsecutively. The Secretary 
shall establish procedures for periodic review of the mort-
gagor’s financial circumstances for the purpose of deter-
mining the necessity for continuation, termination, or ad-
justment of the amount of the payments. 
SEC. 6. REPAYMENT OF ASSISTANCE. 
(a) ASSISTANCE LOAN.—The amount by which the 
assistance payments made by the Secretary to the mort-
gagee exceeds the amount of payments made by the mort-
gagor to the Secretary shall be a loan by the Secretary 
to the mortgagor. The loan shall be evidenced by such doc-
uments as the Secretary shall determine necessary to pro-
tect the interests of the United States. 
(b) REPAYMENT
OF ASSISTANCE LOAN.—Before 
making assistance payments under this Act on behalf of 
a mortgagor, the Secretary shall enter into an agreement 
with the mortgagor for repayment of all mortgage assist-
ance made by the Secretary under section 5, plus interest 
as provided in subsection (c). The agreement shall provide 
for monthly payments by the mortgagor to the Secretary 
which (1) shall begin once the Secretary has determined 
that continuation of mortgage assistance payments to the 
mortgagee is unnecessary, and (2) shall be in an amount 
determined as follows: 
(1) HOUSING
EXPENSE
LESS
THAN
PER-
CENT.—If the mortgagor’s total housing expense is 
less than 35 percent of the mortgagor’s net effective
income, the mortgagor shall pay to the Secretary the 
difference between 35 percent of the mortgagor’s net 
effective income and the mortgagor’s total housing 
expense unless otherwise determined by the Sec-
retary after examining the mortgagor’s financial cir-
cumstances and ability to contribute to repayment of 
the mortgage assistance. 
(2) HOUSING EXPENSE GREATER THAN 35 PER-
CENT.—If the mortgagor’s total housing expense is 
more than 35 percent of the mortgagor’s net effec-
tive income, repayment of the mortgage assistance 
shall be deferred until the mortgagor’s total housing 
expense is less than 35 percent of the mortgagor’s 
net effective income. 
(3) WHEN MORTGAGE PAID IN FULL.—Notwith-
standing paragraphs (1) and (2), if repayment of 
mortgage assistance is not made by the date that 
the mortgage is paid in full, the mortgagor shall 
make mortgage assistance repayments in an amount 
not less than the previous regular mortgage payment 
until the mortgage assistance is repaid. 
(c) INTEREST.—Interest shall accrue on all mortgage 
assistance made under this Act at the rate determined 
monthly by the Secretary of the Treasury to be equal to 
the then current average yield on outstanding 30-year
bonds issued by the Secretary of the Treasury under sec-
tion 3102 of title 31, United States Code, and shall accrue 
only during the period in which the mortgagor is required 
to make repayment under this section. 
(d) LIEN
TO SECURE REPAYMENT
OF ASSIST-
ANCE.—Repayment of amounts owed to the Secretary 
from a mortgagor shall be secured by a mortgage lien on 
the property and by such other obligation as the Secretary 
may require. The lien or other security interest of the Sec-
retary shall not be deemed to take priority over any other 
secured lien or secured interest in effect against the mort-
gagor’s property on the date assistance payments begin. 
The Secretary may allow subordination of the mortgage 
assistance lien only if such subordination is necessary to 
permit the mortgagor to obtain a home improvement loan 
for repairs necessary to preserve the property. 
(e) TIME FOR REPAYMENT.—Payments under this 
section shall be made by the mortgagor to the Secretary 
not later than 14 days after each mortgage payment is 
due under the mortgage (or in the case of repayment after 
the mortgage has been paid in full, not later than the date 
the mortgage payments were due under the mortgage). 
SEC. 7. DEFINITIONS. 
For the purposes of this Act, the following definitions 
apply:
(1) APPROVED
COUNSELING
AGENCY.—The 
term ‘‘approved counseling agency’’ means a non-
profit housing counseling agency approved by the 
Secretary pursuant to section 2(e). 
(2) GROSS
HOUSEHOLD
INCOME.—The term 
‘‘gross household income’’ means the total income of 
a mortgagor, the mortgagor’s spouse, children resid-
ing in the same residence as the mortgagor, and any 
other person living in such residence that is declared 
by the mortgagor as a dependent for Federal income 
tax purposes. 
(3) 
HOUSEHOLD.—The 
term 
‘‘household’’ 
means a mortgagor, the mortgagor’s spouse, chil-
dren residing in the same residence as the mort-
gagor, and any other person living in such residence 
that is declared by the mortgagor as a dependent for 
Federal income tax purposes. 
(4) HOUSING
EXPENSE.—The term ‘‘housing 
expense’’ means the sum of the mortgagor’s monthly 
maintenance, utility, and hazard insurance expense, 
taxes, and required mortgage payments, including 
escrows. 
(5) MORTGAGEE; 
MORTGAGOR.—The terms 
‘‘mortgagee’’ and ‘‘mortgagor’’ have the meanings
given such terms in section 201 of the National 
Housing Act (12 U.S.C. 1707). 
(6) NET EFFECTIVE INCOME.—The term ‘‘net 
effective income’’ means the gross household income 
of the mortgagor, less city, State, and Federal in-
come and social security taxes. 
(7) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Housing and Urban Development.
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