Title: Preventing Foreclosures on Seniors Act of 2017
Policy area: Housing and Community Development

Summary:
Preventing Foreclosures on Seniors Act of 2017
This bill expands loss mitigation for borrowers and surviving spouses under the Federal Housing Administration's Home Equity Conversion Mortgages program (a reverse-mortgage program) and otherwise revises the program.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4160 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 4160

  To revise the FHA program for home equity conversion mortgages for 
  elderly homeowners to add safeguards to prevent the displacement of 
                  homeowners, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 26, 2017

 Ms. Maxine Waters of California (for herself and Mr. Heck) introduced 
 the following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
  To revise the FHA program for home equity conversion mortgages for 
  elderly homeowners to add safeguards to prevent the displacement of 
                  homeowners, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Preventing Foreclosures on Seniors 
Act of 2017''.

SEC. 2. SAFEGUARDS TO PREVENT DISPLACEMENT OF HOMEOWNER.

    Subsection (j) of section 255 of the National Housing Act (12 
U.S.C. 1715z-20(j)) is amended--
            (1) by striking the subsection designation and all that 
        follows through ``The Secretary'' and inserting the following:
    ``(j) Safeguards To Prevent Displacement of Homeowner.--
            ``(1) Deferral of homeowner's obligation.--The Secretary''; 
        and
            (2) by adding at the end the following new paragraphs:
            ``(2) Assignment of mortgage to hud upon death of borrowing 
        spouse with surviving non-borrowing spouse.--
                    ``(A) Assignment; notice.--The Secretary shall 
                require the mortgagee of a mortgage insured under this 
                section, upon the death of the last surviving borrower 
                under such mortgage who is survived by an eligible non-
                borrowing spouse--
                            ``(i) to assign the mortgage to the 
                        Secretary; and
                            ``(ii) not later than the expiration of the 
                        7-day period beginning upon notice to the 
                        mortgagee of the death of the borrower, to 
                        notify the eligible non-borrowing spouse in 
                        writing--
                                    ``(I) of the opportunity, pursuant 
                                to subparagraph (B), for the eligible 
                                non-borrowing spouse to remain in the 
                                property that is subject to the 
                                mortgage; and
                                    ``(II) that the eligible non-
                                borrowing spouse should contact the 
                                mortgagee regarding such assignment.
                    ``(B) Treatment of eligible non-borrowing spouse.--
                After assignment of a mortgage to the Secretary 
                pursuant to subparagraph (A), the Secretary shall 
                provide the eligible non-borrowing spouse with a 
                deferral of the due and payable status due to the death 
                of the borrowing spouse as long as the eligible non-
                borrowing spouse qualifies as such pursuant to 
                paragraph (4)(B).
            ``(3) Loss mitigation in cases of delinquent taxes or 
        insurance.--
                    ``(A) Requirement.--The Secretary shall require 
                that, in the case of a mortgage insured under this 
                section that is in default by reason of failure to make 
                payment of taxes or insurance required under the 
                mortgage or homeowners association fees, the mortgagee 
                shall, as a precondition of sending a due and payable 
                request to the Secretary, take the following actions:
                            ``(i) Loss mitigation.--The mortgagee shall 
                        take appropriate loss mitigation actions, which 
                        may include the following actions:
                                    ``(I) Establishing a realistic 
                                repayment plan for the delinquent 
                                property charges.
                                    ``(II) Assisting the borrower in 
                                contacting a HUD-approved Housing 
                                Counseling Agency (HCA) to obtain free 
                                assistance in finding some viable 
                                resolution to the delinquency, or in 
                                identifying local resources available 
                                to provide funds or homestead 
                                exemptions.
                                    ``(III) Refinancing the delinquent 
                                mortgage into a new home equity 
                                conversion mortgage if--
                                            ``(aa) there is sufficient 
                                        equity to satisfy the existing 
                                        mortgage and outstanding 
                                        property charges; and
                                            ``(bb) the applicant for 
                                        refinancing meets the financial 
                                        assessment guidelines of the 
                                        Secretary.
                                    ``(IV) Extending the deadlines for 
                                foreclosure in cases in which the 
                                youngest living borrower or spouse is 
                                at least 80 years of age and has 
                                critical circumstances such as a 
                                terminal illness, long-term physical 
                                disability, or a unique occupancy need.
                                    ``(V) Refraining from submitting a 
                                due and payable request to the 
                                Secretary in cases in which the total 
                                arrearage for property taxes and hazard 
                                insurance is less than $2,000.
                                    ``(VI) Such other loss mitigation 
                                actions as the Secretary considers 
                                appropriate in such cases.
                            ``(ii) Treatment of non-borrowing spouse.--
                        The mortgagee shall treat any non-borrowing 
                        spouse as a borrowing spouse for the purposes 
                        of loss mitigation.
                    ``(B) Failure to comply.--In any case of claim for 
                insurance benefits for a mortgage insured under this 
                section made by a mortgagee who has failed to comply 
                with the requirements under subparagraph (A), the 
                Secretary may reduce or deny such benefits based upon 
                such failure.
            ``(4) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    ``(A) Borrower.--The term `borrower' means, with 
                respect to a mortgage insured under this section, the 
                original borrower under the note and mortgage. Such 
                term does not include successors or assigns of a 
                borrower.
                    ``(B) Eligible non-borrowing spouse.--The term 
                `eligible non-borrowing spouse' means a non-borrowing 
                spouse of a borrower under a mortgage insured under 
                this section that was assigned an FHA Case Number 
                before August 4, 2014, who--
                            ``(i)(I) was legally married, as determined 
                        by the law of the State in which the spouse and 
                        borrower reside or resided or the State of 
                        celebration, to the borrower at the time of 
                        loan closing and who remained married to the 
                        borrower until the borrower's death; or
                            ``(II) engaged in a committed relationship 
                        with the borrower akin to marriage but was 
                        prohibited, at the time of the mortgage loan 
                        origination, from legally marrying the borrower 
                        based on the gender of both the borrower and 
                        non-borrowing spouse, but was legally married 
                        before the death of the borrower, as determined 
                        by the law of the State in which the spouse and 
                        borrower reside or resided or the State of 
                        celebration, to the borrower and remained 
                        married until the death of the borrower;
                            ``(ii) currently resides and resided in the 
                        property secured by the mortgage insured under 
                        this section as his or her principal residence 
                        at origination of the mortgage and throughout 
                        the duration of the borrower's life; and
                            ``(iii) has obtained or is able to obtain, 
                        before the date of foreclosure on the mortgage 
                        pursuant to the death of the last surviving 
                        borrower--
                                    ``(I) good, marketable title to or 
                                an ownership interest in the property 
                                subject to the mortgage; or
                                    ``(II) a legal or other right 
                                (including a will, an executed lease, 
                                or court order) to remain in the 
                                property for life.
                    ``(C) Non-borrowing spouse.--For purposes of this 
                subsection, the term `non-borrowing spouse' means, with 
                respect to a borrower under a mortgage insured under 
                this section, the spouse of such borrower who is not 
                also a borrower.
            ``(5) Mortgagee optional election assignment.--In 
        implementing the Mortgagee Optional Election Assignment for 
        home equity conversion mortgages insured under this section, 
        the Secretary shall use the definition of `eligible non-
        borrowing spouse' under paragraph (4) of this subsection in 
        lieu of the definition of `eligible surviving non-borrowing 
        spouse' under the definition provisions of Mortgagee Letter 
        2015-15 (June 12, 2015) or any other definition.''.

SEC. 3. CONSULTATION WITH BUREAU OF CONSUMER FINANCIAL PROTECTION.

    Section 255 of the National Housing Act (12 U.S.C. 1715z-20) is 
amended--
            (1) by redesignating subsection (r) as subsection (q); and
            (2) by adding at the end the following new subsection:
    ``(r) Consultation With CFPB.--In carrying out the program for 
insuring mortgages under this section, the Secretary shall consult with 
the Bureau of Consumer Financial Protection of the Federal Reserve 
System on matters involving consumer protections.''.
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