I 
111TH CONGRESS 
1ST SESSION 
H. R. 527 
To amend the Truth in Lending Act to permit deferrals on certain home 
mortgage foreclosures for a limited period to allow homeowners to take 
remedial action, to require home mortgage servicers to provide advance 
notice of any upcoming reset of the mortgage interest rate, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 14, 2009 
Ms. MATSUI (for herself and Ms. CASTOR of Florida) introduced the following 
bill; which was referred to the Committee on Financial Services 
A BILL 
To amend the Truth in Lending Act to permit deferrals 
on certain home mortgage foreclosures for a limited pe-
riod to allow homeowners to take remedial action, to 
require home mortgage servicers to provide advance no-
tice of any upcoming reset of the mortgage interest rate, 
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 ‘‘Home Retention and 
Economic Stabilization Act of 2009’’. 
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SEC. 2. FORECLOSURE DEFERMENT. 
(a) IN GENERAL.—Chapter 2 of the Truth in Lend-
ing Act (15 U.S.C. 1631 et seq.) is amended by inserting 
after section 128 the following new section: 
‘‘§ 128A. Foreclosure deferment and reset notification 
for mortgages 
‘‘(a) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
‘‘(1) DEFERMENT
PAYMENT
AMOUNT.—The 
term ‘deferment payment amount’ means the 
amount of the monthly payment that is due on an 
eligible deferred-foreclosure mortgage during the 
deferment period. 
‘‘(2) 
DEFERMENT
PERIOD.—The 
term 
‘deferment period’ means the period that— 
‘‘(A) begins when the eligible consumer 
sends notice of the exercise of the deferral right 
under subsection (b)(1) with respect to an eligi-
ble deferred-foreclosure mortgage to the cred-
itor or servicer; and 
‘‘(B) ends on the earliest of the following 
applicable dates: 
‘‘(i) The date that is 270 days after 
the beginning of the period. 
‘‘(ii) The end of the 30-day period be-
ginning on any due date for any deferment 
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payment (on such mortgage, in accordance 
with this section) which remains unpaid as 
of the end of such 30-day period. 
‘‘(iii) The date on which the creditor 
or servicer enters into a qualified loan 
modification with the consumer. 
‘‘(iv) The date on which the deferment 
is terminated by judicial order. 
‘‘(3) DEFERMENT PERIOD TRIGGER.—The term 
‘deferment period trigger’ means the date on which 
the consumer becomes eligible for a deferment under 
subsection (b)(1) with respect to an eligible deferred- 
foreclosure mortgage and occurs on the earlier of— 
‘‘(A) the date of any adjustment or reset 
of the interest rate on such mortgage; 
‘‘(B) the date by which the consumer is 60 
days delinquent on mortgage payments; or 
‘‘(C) the date of the first increase in the 
minimum monthly payment due under such 
mortgage after the origination of such mort-
gage. 
‘‘(4) 
ELIGIBLE
DEFERRED-FORECLOSURE 
MORTGAGE.—The term ‘eligible deferred-foreclosure 
mortgage’ means a consumer credit transaction that 
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is secured by the principal dwelling of an eligible 
consumer that— 
‘‘(A) was entered into before the date of 
enactment of this section; and 
‘‘(B) has reached the deferment period 
trigger. 
‘‘(5) ELIGIBLE CONSUMER.—The term ‘eligible 
consumer’ means a consumer who— 
‘‘(A) is a mortgagor or borrower on an eli-
gible deferred-foreclosure mortgage; 
‘‘(B) has resided at the property secured 
by such mortgage since the mortgage trans-
action was entered into and intends to reside at 
such property at least until the end of the 
deferment period; 
‘‘(C) has a current monthly income that, 
when multiplied by 12, is less than 200 percent 
of the area median annual income for the rel-
evant family size in the State in which the resi-
dence is located; and 
‘‘(D) during the deferment period, re-
sponds to reasonable inquiries from a creditor 
or servicer with respect to an eligible deferred- 
foreclosure mortgage. 
‘‘(6) QUALIFIED LOAN MODIFICATION.— 
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‘‘(A) IN
GENERAL.—The term ‘qualified 
loan modification’ means a permanent, sustain-
able loan modification. 
‘‘(B) FDIC 
REGULATIONS.—Not later 
than 60 days after the date of enactment of the 
Home Retention and Economic Stabilization 
Act of 2009, the Chairperson of the Federal 
Deposit Insurance Corporation shall promulgate 
rules establishing under what circumstances a 
loan modification will qualify as permanent and 
sustainable. 
‘‘(b) RIGHT TO DEFERMENT OF INSTITUTION OF OR 
ACTION ON FORECLOSURE.— 
‘‘(1) RIGHT
ESTABLISHED.—Any eligible de-
ferred-foreclosure consumer shall have the right to 
defer any initiation of a foreclosure, whether judicial 
or nonjudicial, or any action in connection with a 
foreclosure already instituted, including any fore-
closure sale, with respect to any eligible deferred- 
foreclosure mortgage by any creditor, servicer, or 
holder of such mortgage, or any other person acting 
on behalf of any such creditor, servicer, or holder, 
until the end of the deferment period. 
‘‘(2) ENFORCEMENT OF RIGHT.—An eligible de-
ferred-foreclosure consumer may defend against a 
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foreclosure or bring an action in any court of com-
petent or general jurisdiction to compel compliance 
with the right of the consumer under paragraph (1) 
to defer any initiation of a foreclosure or any action 
in connection with a foreclosure already instituted, 
including any foreclosure sale, with respect to any 
eligible deferred-foreclosure mortgage. 
‘‘(c) NOTICE TO CONSUMER BEFORE ANY FORE-
CLOSURE ACTION.— 
‘‘(1) NOTICE OF RIGHT REQUIRED.—Before ini-
tiating any foreclosure with respect to any eligible 
deferred-foreclosure 
mortgage, 
the 
creditor 
or 
servicer shall notify, by personal service, any eligible 
deferred-foreclosure consumer with respect to such 
mortgage of such consumer’s right under subsection 
(b) to defer the initiation of foreclosure. 
‘‘(2) CONTENTS OF NOTICE.—The Board shall 
prescribe, by regulations under sections 105 and 
122, the content and format, including the size of 
the font, of the notices under paragraph (1) in a 
manner that maximizes the likelihood that the con-
sumer will obtain and understand all the information 
necessary to exercise the right to defer any action to 
institute foreclosure, including— 
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‘‘(A) the manner and format for obtaining 
such deferral, including a sample notice form, 
an identification form, and a certification form 
for the consumer to use in complying with sub-
section (d)(1); 
‘‘(B) contact information for the creditor 
or servicer, as the case may be and any third 
party involved in foreclosure proceedings, in-
cluding State or local officials; and 
‘‘(C) contact information for obtaining any 
counseling concerning the exercise of such de-
ferral from a counselor approved by the appro-
priate State housing finance agency or the Sec-
retary of Housing and Urban Development. 
‘‘(3) TIMING.—No foreclosure action or pro-
ceeding with respect to any eligible deferred-fore-
closure mortgage shall be valid unless the creditor or 
servicer has provided the notice required under this 
subsection to the consumer at least 30 days before 
instituting any such action or proceeding and at 
least once during each subsequent 30-day period 
until the foreclosure becomes final. 
‘‘(d) INSTITUTION OF DEFERMENT.— 
‘‘(1) PROCEDURE REQUIRED.—Any eligible de-
ferred-foreclosure consumer who chooses to exercise 
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a deferment right under subsection (b) shall pro-
vide— 
‘‘(A) notice of the exercise of such to the 
servicer or other person described in the notice 
to the consumer under subsection (e) by any 
reasonable means including by mail, service 
whether directly or to any agent, including at 
the address of any registered agent; 
‘‘(B) a clear identification of the eligible 
deferred-foreclosure consumer and the address 
of the property securing the mortgage; and 
‘‘(C) a certification that at least 1 con-
sumer borrower with respect to such mortgage 
resides at the property secured by such mort-
gage and intends to reside at such property at 
least until the end of the deferment period. 
‘‘(2) SUFFICIENCY OF NOTICE.— 
‘‘(A) IN GENERAL.—Notice and delivery of 
an affidavit under paragraph (1) may be made 
by any reasonable means including by mail, 
service whether directly or to any agent, includ-
ing at the address of any registered agent with 
the secretary of state for the State in which the 
property is located, or any attorney rep-
resenting the consumer, or by such means as 
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the terms of the mortgage or regulations pre-
scribed by the Board may provide. 
‘‘(B) OTHER PARTIES.—If any court, any 
sheriff or other official designated under State 
law, or any other person authorized under State 
law and the contracts of the parties to maintain 
any foreclosure proceeding or conduct any fore-
closure sale receives, directly or indirectly, a 
copy of any notice provided under this sub-
section by an eligible deferred-foreclosure con-
sumer with respect to any eligible deferred-fore-
closure mortgage, no foreclosure action may be 
taken by the court, sheriff, official, or other 
person with respect to such mortgage during 
the applicable deferred-foreclosure period. 
‘‘(3) ACKNOWLEDGMENT.— 
‘‘(A) IN GENERAL.—Any creditor, servicer, 
or holder of an eligible deferred-foreclosure 
mortgage, or any other person acting on behalf 
of any such creditor, servicer, or holder, who re-
ceives a notice from a consumer under para-
graph (2) shall acknowledge to the consumer 
the receipt of the notice of the exercise of the 
deferment right under subsection (b) before the 
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end of the 10-business day period beginning on 
the date of such receipt. 
‘‘(B) CONTENTS
OF
NOTICE.—The ac-
knowledgment provided to any eligible deferred- 
foreclosure consumer under subparagraph (A) 
shall include the date on which the next pay-
ment is due on the eligible deferred-foreclosure 
mortgage, the deferment payment amount, the 
date on which each subsequent payment is due, 
and the address or the delivery method for each 
such payment that is acceptable to the recipi-
ent. 
‘‘(4) MONTHLY PAYMENT NOTICES.—Each peri-
odic statement of account submitted by the creditor 
or servicer with respect to any eligible deferred-fore-
closure mortgage during the period while any 
deferment right under subsection (b) is in effect 
shall include— 
‘‘(A) the due date and the amount of the 
next payment due on such mortgage; 
‘‘(B) the address or the delivery method 
for such payment; 
‘‘(C) the date on which the deferral of the 
foreclosure will terminate; and 
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‘‘(D) a notice that failure to make such 
payment in a timely manner will jeopardize the 
continuation of the deferral of the foreclosure. 
‘‘(e) DEFERMENT PAYMENT.— 
‘‘(1) IN GENERAL.—During the deferment pe-
riod with respect to any eligible deferred-foreclosure 
mortgage for which any deferment right has been 
exercised under subsection (b), monthly payments 
shall continue to be made by the consumer with re-
spect to such mortgage. 
‘‘(2) AMOUNT
OF
PAYMENT.—The deferment 
payment amount for purposes of monthly payments 
under paragraph (1) with respect to any eligible de-
ferred-foreclosure mortgage shall be, as applicable, 
the lesser of— 
‘‘(A) the minimum monthly payment of 
principal and interest on the date on which the 
loan was originated; 
‘‘(B) a monthly payment based on the out-
standing loan principal plus a rate of interest 
calculated at a fixed annual percentage rate, in 
an amount equal to the most recent conven-
tional mortgage rate plus a 100 basis point pre-
mium for risk, amortized over a period of 30 
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years minus the period of time since the origi-
nation of the loan; or 
‘‘(C) the amount of the first minimum 
monthly payment due under the mortgage after 
the origination of such mortgage. 
‘‘(3) AMORTIZATION
OF
DIFFERENCE.—The 
difference between the amount of any monthly pay-
ment due under the terms of any eligible deferred- 
foreclosure mortgage and the deferment payment 
amount shall be amortized over the life of the mort-
gage beginning after the deferred-foreclosure period 
in accordance with regulations which the Board shall 
prescribe. 
‘‘(4) CHARGES
PROHIBITED.—No creditor or 
servicer may impose any late fee or other fee or 
charge during the deferment period with respect to 
any eligible deferred-foreclosure mortgage for which 
any deferment right has been exercised under sub-
section (b) or in connection with the exercise of such 
deferment right. 
‘‘(f) NOTICE OF RESET AND ALTERNATIVES.—Dur-
ing the 1-month period that ends 120 days before the date 
on which the interest rate in effect during the introductory 
period of an eligible deferred-foreclosure mortgage adjusts 
or resets to a variable interest rate, or the minimum 
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monthly payment of principal and interest required first 
increases from the amount of the first such minimum 
monthly payment due under the mortgage after the origi-
nation of such mortgage, the creditor or servicer of such 
loan shall provide a written notice, separate and distinct 
from all other correspondence to the consumer, that in-
cludes the following: 
‘‘(1) Any index or formula used— 
‘‘(A) in determining the annual percentage 
rate applicable as of the effective date of a reset 
or adjustment; and 
‘‘(B) in making any increases in the min-
imum monthly payments due, and a source of 
information about the index or formula. 
‘‘(2) A good faith estimate, based on accepted 
industry standards and disclosed in a clear and con-
spicuous manner, of the creditor or servicer of the 
amount of the monthly payment that will apply after 
the date of the adjustment or reset, or increase, as 
applicable, and the assumptions on which this esti-
mate is based. 
‘‘(3) A list of alternatives consumers may pur-
sue before the date of adjustment or reset, or in-
crease, as applicable, and descriptions of the actions 
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consumers must take to pursue such alternatives, in-
cluding— 
‘‘(A) refinancing; 
‘‘(B) renegotiation of loan terms; 
‘‘(C) payment forbearance; 
‘‘(D) pre-foreclosure sales; 
‘‘(E) any payment assistance available 
from the State in which the property is located; 
and 
‘‘(F) any refinancing, loan modification, or 
other assistance program available through the 
Federal Government that may apply to the 
loan. 
‘‘(4) The names, addresses, telephone numbers, 
and Internet addresses of counseling agencies or 
programs reasonably available to the consumer that 
have been certified or approved and made publicly 
available by the Secretary of Housing and Urban 
Development or a State housing finance authority 
(as defined in section 1301 of the Financial Institu-
tions Reform, Recovery, and Enforcement Act of 
1989). 
‘‘(5) The address, telephone number, and Inter-
net address for the State housing finance authority 
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(as so defined) for the State in which the consumer 
resides. 
‘‘(g) MOST
RECENT
CONVENTIONAL
MORTGAGE 
RATE.—For purposes of subsection (f)(1)(A)(ii), the term 
‘most recent conventional mortgage rate’ means the con-
tract interest rate on commitments for fixed-rate first 
mortgages most recently published in the Federal Reserve 
Statistical Release on selected interest rates (daily or 
weekly), and commonly referred to as the H.15 release (or 
any successor publication), in the week preceding a date 
of determination for purposes of applying this subsection. 
‘‘(h) DUTY
OF CONSUMER TO MAINTAIN PROP-
ERTY.— 
‘‘(1) IN GENERAL.—Any eligible deferred-fore-
closure consumer for whom a deferment of fore-
closure is in effect under this section with respect to 
any eligible deferred-foreclosure mortgage may not, 
with respect to any property securing such mort-
gage, destroy, damage, or impair such property, 
allow the property to substantially deteriorate, or 
commit waste on the property. 
‘‘(i) DECLARATION OF RIGHTS.—In addition to the 
right of any party to a mortgage to seek a declaratory 
judgment under section 2201 of title 28, United States 
Code, any such party may apply prior to the end of the 
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deferment period to any State court of competent or gen-
eral jurisdiction for an order establishing the rights, du-
ties, and conditions imposed on or applicable to any party 
to the mortgage, including the terms and conditions of a 
deferment. 
‘‘(j) COORDINATION WITH STATE LAW.— 
‘‘(1) IN GENERAL.—No provision of this section 
shall be construed as annulling, altering, or affecting 
the laws of any State relating to deferment of fore-
closures, except to the extent that those laws are in-
consistent with the provisions of this section, and 
then only to the extent of the inconsistency. 
‘‘(2) RULE OF CONSTRUCTION.—A State law is 
not inconsistent with this section if the protection 
that such law affords any consumer is greater than 
the protection afforded by this section.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 2 of the Truth in Lending Act is amended 
by inserting after the item relating to section 128 the fol-
lowing new item: 
‘‘128A. Foreclosure deferment and reset notification for certain mortgages.’’. 
SEC. 3. HOUSING COUNSELING. 
(a) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated for fiscal year 2009, 
$200,000,000 for the Neighborhood Reinvestment Cor-
poration, for carrying out foreclosure mitigation activities 
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under the terms and conditions contained in the second 
paragraph under the heading ‘‘Neighborhood Reinvest-
ment Corporation—Payment to the Neighborhood Rein-
vestment Corporation’’ in title III of division K of Public 
Law 110–161 (121 Stat. 2441), which may include use 
for costs of providing additional counselors, translators, 
and other staffers and costs of providing additional com-
puters and improving databases and overall operations to 
better assist mortgagor families. 
(b) COUNSELING SERVICES.—Amounts made avail-
able under this Act may also be used by counseling inter-
mediaries approved by the Department of Housing and 
Urban Development or the Neighborhood Reinvestment 
Corporation to assist homeowners who have legal issues 
directly related to the homeowner’s foreclosure, delin-
quency, or short sale, either by hiring attorneys directly 
or by contracting with legal aid agencies experienced in 
foreclosure work. Such attorneys or agencies shall be capa-
ble of assisting homeowners of owner-occupied homes with 
mortgages in default, in danger of default, or subject to 
or at risk of foreclosure and who have legal issues that 
cannot be handled by counselors already employed by such 
intermediaries. 
Æ 
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