I 
112TH CONGRESS 
1ST SESSION H. R. 1783 
To provide for enhanced mortgage-backed and asset-backed security investor 
protections, to prevent foreclosure fraud, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 5, 2011 
Mr. MILLER of North Carolina (for himself, Mr. GEORGE MILLER of Cali-
fornia, Mr. TURNER, Mr. CONYERS, and Mr. AL GREEN of Texas) intro-
duced the following bill; which was referred to the Committee on Finan-
cial Services 
A BILL 
To provide for enhanced mortgage-backed and asset-backed 
security investor protections, to prevent foreclosure 
fraud, 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 ‘‘Foreclosure Fraud and 
Homeowner Abuse Prevention Act of 2011’’. 
SEC. 2. DEFINITIONS. 
For purposes of this Act, the following definitions 
shall apply: 
VerDate Mar 15 2010 
00:21 May 11, 2011
Jkt 099200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H1783.IH
H1783
smartinez on DSKB9S0YB1PROD with BILLS
(1) COMMISSION.—The term ‘‘Commission’’ 
means the Securities and Exchange Commission. 
(2) MORTGAGE.—The term ‘‘mortgage’’ means 
a federally related mortgage loan, as defined in sec-
tion 3 of the Real Estate Settlement Procedures Act 
of 1974 (12 U.S.C. 2602). 
(3) MORTGAGE-BACKED SECURITY.—The term 
‘‘mortgage-backed security’’ means an asset-backed 
security, as defined in section 3(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a)), that is 
collateralized by— 
(A) a mortgage; or 
(B) a collateralized mortgage obligation of 
mortgage-backed securities. 
(4) SECURITIZED
RESIDENTIAL
MORTGAGE 
LOAN.—The term ‘‘securitized residential mortgage 
loan’’ means any residential mortgage loan that 
serves as collateral for a fixed-income or other secu-
rity that allows the holder of such security to receive 
payments dependent on the cash flow from such res-
idential mortgage loan. 
(5) SERVICER.—The term ‘‘servicer’’— 
(A) means any person responsible for the 
management or collection of a pool of assets or 
VerDate Mar 15 2010 
00:21 May 11, 2011
Jkt 099200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H1783.IH
H1783
smartinez on DSKB9S0YB1PROD with BILLS
making allocations or distributions to holders of 
asset-backed securities; and 
(B) does not include any State or local 
housing agency. 
SEC. 3. TRUST INDENTURE ACT PROTECTIONS. 
(a) DEFINITIONS.—Section 303 of the Trust Inden-
ture Act of 1939 (15 U.S.C. 77ccc) is amended— 
(1) in paragraph (7), by adding at the end the 
following: ‘‘Such term shall include mortgage-backed 
securities.’’; 
(2) in paragraph (10), by adding at the end the 
following: ‘‘Such term shall include servicers of 
mortgage-backed securities.’’; and 
(3) by adding at the end the following: 
‘‘(19) The term ‘mortgage-backed security’ 
means an asset-backed security, as defined in section 
3(a) of the Securities Exchange Act of 1934, that is 
collateralized by— 
‘‘(A) a mortgage; or 
‘‘(B) a collateralized mortgage obligation 
of mortgage-backed securities. 
‘‘(20) The term ‘servicer’— 
‘‘(A) means any person responsible for the 
management or collection of a pool of assets or 
VerDate Mar 15 2010 
00:21 May 11, 2011
Jkt 099200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H1783.IH
H1783
smartinez on DSKB9S0YB1PROD with BILLS
making allocations or distributions to holders of 
asset-backed securities; and 
‘‘(B) does not include any State or local 
housing agency.’’. 
(b) CLARIFICATION OF EXEMPTIONS.—Section 304 
of the Trust Indenture Act of 1939 (15 U.S.C. 77ddd) 
is amended— 
(1) in paragraph (2), by inserting ‘‘other than 
residential mortgage-back securities’’ after ‘‘securi-
ties’’; 
(2) in paragraph (4), by inserting ‘‘other than 
a residential mortgage-back security’’ after ‘‘secu-
rity’’; and 
(3) in paragraph (7), by inserting ‘‘other than 
a registered mortgage-back security’’ after ‘‘secu-
rity’’. 
(c) FIDUCIARY DUTY.—Section 315 of the Trust In-
denture Act of 1939 (15 U.S.C. 77ooo) is amended by 
adding at the end the following: 
‘‘(f) Each servicer of a mortgage-backed security 
shall have a fiduciary duty to protect the economic inter-
ests of the investors as a whole in an asset-backed secu-
rity, which duty may not be waived by the investor.’’. 
VerDate Mar 15 2010 
00:21 May 11, 2011
Jkt 099200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H1783.IH
H1783
smartinez on DSKB9S0YB1PROD with BILLS
(d) REMOVAL
OF TRUSTEE.—Section 310 of the 
Trust Indenture Act of 1939 (15 U.S.C. 77jjj) is amended 
by adding at the end the following: 
‘‘(3) An indenture trustee that is a servicer of 
mortgage backed securities may be removed if not 
fewer than 50 percent of the investors petition a 
court of competent jurisdiction for the removal of 
such trustee.’’. 
(e) AMENDMENT
OF
POOLING
AND
SERVICING 
AGREEMENT.—Section 316 of the Trust Indenture Act of 
1939 (15 U.S.C. 77ppp) is amended by adding at the end 
the following: 
‘‘(d) Notwithstanding any other provision of this title, 
a pooling and servicing agreement with respect to any 
mortgage-backed security may be amended without the 
consent of a majority of the holders of such security, if 
not fewer than 25 percent thereof petition a court of com-
petent jurisdiction for such action. For purposes of this 
subsection a ‘pooling and servicing agreement’ is any con-
tract or a substantially similar document establishing the 
transaction rights and duties of the parties to any mort-
gage-backed securitization transaction.’’. 
(f) PENALTY.—Section 325 of the Trust Indenture 
Act of 1939 (15 U.S.C. 77yyy) is amended by striking 
‘‘$10,000’’ and inserting ‘‘$40,000’’. 
VerDate Mar 15 2010 
00:21 May 11, 2011
Jkt 099200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H1783.IH
H1783
smartinez on DSKB9S0YB1PROD with BILLS
(g) 
DUTIES
AND
RESPONSIBILITIES
OF 
SERVICERS.—Section 315(a) of the Trust Indenture Act 
of 1939 (15 U.S.C. 77ooo(a)) is amended— 
(1) by striking ‘‘The indenture’’ and inserting 
‘‘(1) The indenture’’; 
(2) by redesignating existing paragraphs (1) 
and (2) as subparagraphs (A) and (B), respectively, 
and moving the margins 2 ems to the right; and 
(3) by adding at the end the following: 
‘‘(2) Paragraph (1) shall not apply with respect 
to an indenture that is a mortgage-backed security. 
An indenture trustee of such a security shall have a 
duty to verify the correctness of any such state-
ments.’’. 
SEC. 4. MORTGAGE RELATED SECURITY SERVICER AD-
VANCES. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 15G the fol-
lowing new section: 
‘‘SEC. 15H. MORTGAGE RELATED SECURITIES SERVICER 
ADVANCES. 
‘‘(a) 
COMMISSION
RULEMAKING
REQUIRED.— 
Promptly after the date of enactment of this section, the 
Commission shall, after consultation with the appropriate 
Federal banking agencies (as defined in section 3 of the 
VerDate Mar 15 2010 
00:21 May 11, 2011
Jkt 099200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H1783.IH
H1783
smartinez on DSKB9S0YB1PROD with BILLS
Federal Deposit Insurance Act (12 U.S.C. 1813)) and the 
Bureau of Consumer Financial Protection where appro-
priate, issue regulations— 
‘‘(1) to require each servicer of a mortgage re-
lated security to notify investors therein of any ad-
vances to the securitization vehicle; 
‘‘(2) to prohibit the primary servicer of a mort-
gage related security from advancing delinquent pay-
ments of principal and interest by mortgagors for 
more than 3 payment periods, unless financing or 
reimbursement facilities to fund or reimburse the 
primary servicers are available; 
‘‘(3) to prohibit the commingling of home-
owners’ monthly mortgage payments with the assets 
of the servicer of a mortgage related security, other 
than as necessary to clear payments received, but 
not to exceed 2 business days; 
‘‘(4) to provide for recoupment, from any cur-
rent or former senior executive or director of a 
servicer of a mortgage related security who has been 
convicted of any violation of the securities laws, any 
compensation received during the 3-year period pre-
ceding the date of the violation that the Commission 
determines was connected to such violation, includ-
ing any unjust enrichment related to such violation, 
VerDate Mar 15 2010 
00:21 May 11, 2011
Jkt 099200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H1783.IH
H1783
smartinez on DSKB9S0YB1PROD with BILLS
except that, in the case of fraud, no time limit shall 
apply; 
‘‘(5) to allow for the controlling holder of a 
mortgage related security to appoint and remove the 
servicers of such security, where the servicer has not 
been in substantial compliance with its duties under 
applicable law and all relevant agreements, as deter-
mined by the Commission; 
‘‘(6) to require each pooling and servicing 
agreement related to a mortgage related security to 
specify separate and independent servicers for de-
fault (in this section referred to as the ‘mandatory 
special servicer’) and transactions processing; and 
‘‘(7) to require existing or future loans com-
prising the mortgage related security be transferred 
to the mandatory special servicer, if such loans are 
more than 60 days delinquent or where the holder 
and servicer find that there is a significant risk of 
default, based on all the facts and circumstances, in 
which case, such mandatory special servicer shall be 
compensated through an untranched, prorated inter-
est in the assets of the mortgage related security, 
beginning at 1 percent. 
For purposes of this subsection a ‘pooling and servicing 
agreement’ is any contract establishing the transaction 
VerDate Mar 15 2010 
00:21 May 11, 2011
Jkt 099200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H1783.IH
H1783
smartinez on DSKB9S0YB1PROD with BILLS