I 
112TH CONGRESS 
2D SESSION 
H. R. 3789 
To amend the Truth in Lending Act to establish clear regulatory standards 
for mortgage servicers, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 18, 2012 
Ms. DELAURO introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To amend the Truth in Lending Act to establish clear regu-
latory standards for mortgage servicers, 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 ‘‘Regulation of Mort-
gage Servicing Act of 2012’’. 
SEC. 2. STANDARDS FOR MORTGAGE SERVICERS. 
(a) IN GENERAL.—Chapter 2 of the Truth in Lend-
ing Act (15 U.S.C. 1631) is amended by adding at the 
end the following new section: 
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‘‘SEC. 129I. STANDARDS FOR SERVICERS OF RESIDENTIAL 
MORTGAGES. 
‘‘(a) DEFINITIONS.—In this section, the following 
definitions shall apply: 
‘‘(1) ALTERNATIVE
TO
FORECLOSURE.—The 
term ‘alternative to foreclosure’— 
‘‘(A) means a course of action with respect 
to a mortgage offered by a servicer to a bor-
rower as an alternative to a covered foreclosure 
action; and 
‘‘(B) includes a short sale and a deed in 
lieu of foreclosure. 
‘‘(2) BORROWER.—The term ‘borrower’ means 
a mortgagor under a mortgage who is in default or 
at risk of imminent default, as determined by the 
Director, by rule. 
‘‘(3) COVERED
FORECLOSURE
ACTION.—The 
term ‘covered foreclosure action’ means a judicial or 
nonjudicial foreclosure. 
‘‘(4) INDEPENDENT
REVIEWER.—The term 
‘independent reviewer’— 
‘‘(A) means an entity that has the exper-
tise and capacity to determine whether a bor-
rower is eligible to participate in a loan modi-
fication program; and 
‘‘(B) includes— 
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‘‘(i) an entity that is not a servicer; or 
‘‘(ii) a division within a servicer that 
is independent of, and not under the same 
immediate supervision as, any division that 
makes determinations with respect to ap-
plications for loan modifications or alter-
natives to foreclosure. 
‘‘(5) LOAN
MODIFICATION
PROGRAM.—The 
term ‘loan modification program’— 
‘‘(A) means a program or procedure de-
signed to change the terms of a mortgage in the 
case of the default, delinquency, or imminent 
default or delinquency of a mortgagor; and 
‘‘(B) includes— 
‘‘(i) a loan modification program es-
tablished by the Federal Government, in-
cluding the Home Affordable Modification 
Program of the Department of the Treas-
ury; and 
‘‘(ii) a loan modification program es-
tablished by a servicer. 
‘‘(6) 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)), that is secured by a 
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first or subordinate lien on residential real property 
that is the primary residence of the borrower. 
‘‘(7) SERVICER.—The term ‘servicer’— 
‘‘(A) has the same meaning as in section 
6(i) of the Real Estate Settlement Procedures 
Act of 1974 (12 U.S.C. 2605(i)); and 
‘‘(B) includes a person responsible for 
servicing a pool of mortgages. 
‘‘(b) SINGLE POINT OF CONTACT.— 
‘‘(1) CASE
MANAGER
REQUIRED.—A servicer 
shall assign 1 case manager to each borrower that 
seeks a loan modification or an alternative to fore-
closure. 
‘‘(2) DUTIES
OF
CASE
MANAGER.—The case 
manager assigned under paragraph (1) shall be an 
individual who— 
‘‘(A) manages the communications between 
the servicer and the borrower; 
‘‘(B) has the authority to make decisions 
about the eligibility of the borrower for a loan 
modification or an alternative to foreclosure; 
‘‘(C) is available to communicate with the 
borrower by telephone and email during busi-
ness hours; and 
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‘‘(D) remains assigned to the borrower 
until the earliest of— 
‘‘(i) the date on which the borrower 
accepts a loan modification or an alter-
native to foreclosure; 
‘‘(ii) the date on which the servicer 
forecloses on the mortgage of the borrower; 
or 
‘‘(iii) the date on which a release of 
the mortgage of the borrower is recorded 
in the appropriate land records office, as 
determined by the Director, by rule. 
‘‘(3) ASSISTANCE
FOR
CASE
MANAGERS.—A 
servicer may assign an employee to assist a case 
manager assigned under paragraph (1), if the case 
manager remains available to communicate with the 
borrower by telephone and email. 
‘‘(c) DETERMINATION OF ELIGIBILITY FOR LOAN 
MODIFICATION PROGRAM OR ALTERNATIVE TO FORE-
CLOSURE REQUIRED BEFORE FORECLOSURE.— 
‘‘(1) INITIATION
OF
COVERED
FORECLOSURE 
ACTIONS.—A servicer may not initiate a covered 
foreclosure action against a borrower unless the 
servicer has— 
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‘‘(A) completed a full review of the file of 
the borrower to determine whether the borrower 
is eligible for a loan modification or an alter-
native to foreclosure; 
‘‘(B) made a reasonable effort to obtain 
the information necessary to determine whether 
the borrower is eligible for a loan modification 
or an alternative to foreclosure, as described in 
paragraph (3); and 
‘‘(C) offered the borrower a loan modifica-
tion or an alternative to foreclosure, if the bor-
rower is eligible for the loan modification or al-
ternative to foreclosure. 
‘‘(2) SUSPENSION OF COVERED FORECLOSURE 
ACTIONS.— 
‘‘(A) IN GENERAL.—A servicer shall sus-
pend a covered foreclosure action that was initi-
ated before the date of enactment of this sec-
tion until the servicer— 
‘‘(i) completes a full review of the file 
of the borrower to determine whether the 
borrower is eligible for a loan modification 
or an alternative to foreclosure; 
‘‘(ii) notifies the borrower of the de-
termination under clause (i); and 
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‘‘(iii) offers the borrower a loan modi-
fication or an alternative to foreclosure, if 
the borrower is eligible for a loan modifica-
tion or an alternative to foreclosure. 
‘‘(B) SUSPENSION.—During the period of 
the suspension under subparagraph (A), a 
servicer may not— 
‘‘(i) send a notice of foreclosure to a 
borrower; 
‘‘(ii) conduct or schedule a sale of the 
residential real property securing the mort-
gage of the borrower; or 
‘‘(iii) cause final judgment to be en-
tered against the borrower. 
‘‘(C) REASONABLE EFFORTS.—A servicer 
is not required to suspend a covered foreclosure 
action under subparagraph (A) if the servicer— 
‘‘(i) makes a reasonable effort to ob-
tain information necessary to determine 
whether the borrower is eligible for a loan 
modification or an alternative to fore-
closure, as described in paragraph (3); and 
‘‘(ii) documents that the servicer has 
not received information necessary to de-
termine whether the borrower is eligible for 
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a loan modification or an alternative to 
foreclosure before the end of the applicable 
period under paragraph (3). 
‘‘(D) RULE OF CONSTRUCTION.—Nothing 
in this section may be construed to require a 
servicer to delay an unavoidable foreclosure, 
such as foreclosure that results from a borrower 
abandoning the residential real property secur-
ing the mortgage of such borrower. 
‘‘(3) REASONABLE
EFFORT
TO
OBTAIN
NEC-
ESSARY INFORMATION.—A servicer shall be deemed 
to have made a reasonable effort to obtain informa-
tion necessary to determine whether the borrower is 
eligible for a loan modification or an alternative to 
foreclosure if such servicer takes the following steps: 
‘‘(A) 
30-DAY
PERIOD
AFTER
DELIN-
QUENCY.— 
‘‘(i) IN GENERAL.—During the 30-day 
period beginning on the date of delin-
quency of the borrower, the servicer shall 
attempt to establish contact with the bor-
rower by— 
‘‘(I) making not fewer than 4 
telephone calls to the telephone num-
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