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SECTION 1. SHORT TITLE.

This Act may be cited as the ''Prompt Notification of Short Sales
Act''.

SEC. 2. DEFINITIONS.

For purposes of this Act, the following definitions shall apply:
(a) Residential Mortgage Loan.--The term ''residential mortgage
loan'' means any consumer credit transaction that is secured by a
mortgage, deed of trust, or other equivalent consensual security
interest on a dwelling or on residential real property that includes a
dwelling, other than a consumer credit transaction under an open end
credit plan or an extension of credit relating to a plan described in
section 101(53D) of title 11, United States Code.
(b) Securitization Vehicle.--The term ''securitization vehicle''
means a trust, special purpose entity, or other legal structure that is
used to facilitate the issuing of securities, participation
certificates, or similar instruments backed by or referring to a pool
of assets that includes residential mortgage loans (or instruments that
are related to residential mortgage loans, such as credit-linked
notes).
(c) Servicer.--The term ''servicer'' has the same meaning as in
section 129A of the Truth in Lending Act (15 U.S.C. 1639a), as so
designated by section 1402(a)(1) of Public Law 111-203, except that
such term includes a person who makes or holds a residential mortgage
loan (including a pool of residential mortgage loans), if such person
also services the loan.
(d) Short Sale.--The term ''short sale'' means the sale of the
dwelling or residential real property that is subject to the mortgage,
deed or trust, or other security interest that secures a residential
mortgage loan that--
(1) will result in proceeds in an amount that is less than
the remaining amount due under the mortgage loan; and
(2) requires authorization by the securitization vehicle or
other investment vehicle or holder of the mortgage loan, or the
servicer acting on behalf of such a vehicle or holder.

SEC. 3. PROMPT NOTIFICATIONS AND DECISION REGARDING SHORT SALE.

(a) Requirement for Prompt Notifications, Decisions.--
(1) Notifications.--
(A) In general.--Each servicer shall provide in
writing to a mortgagor of a residential mortgage loan--
(i) an acknowledgment of receipt of a
written request of the mortgagor, not later
than 3 days after the date of such receipt;
(ii) a notice of any missing or incomplete
information required with respect to such
request, not later than 5 days after the date
of such receipt; and
(iii) a definitive response to such request
approving or denying such request, not later
than 30 days after the date of such receipt.
(B) Exceptional circumstances.--In any case in
which a servicer is unable to provide a decision with
respect to a written request of a mortgagor of a
residential mortgage loan during the 30-day period
required by subparagraph (A), such period may be
extended to not later than 60 days after the date of
receipt of a completed application, except that the
servicer shall, verbally or in writing--
(i) notify the mortgagor during the initial
30-day period that the application is still
under review; and
(ii) each week thereafter provide to the
mortgagor a status update indicating the
reasons why a decision is pending beyond the
required 30-day period.
(C) Applicability.--Subparagraph (A) shall apply,
except as provided in subsection (b), and
notwithstanding any other provision of law or of any
contract, including a contract between a servicer of a
residential mortgage loan and a securitization vehicle
or other investment vehicle.
(D) Content.--A written response by a servicer
under subparagraph (A) shall specify a decision on
whether such request has been denied, approved, or that
such request has been approved subject to specified
changes.
(2) Mortgagor submission.--Paragraph (1) shall apply in any
case in which the mortgagor under a residential mortgage loan
submits to the servicer thereof--
(A) a written offer for a short sale of the
dwelling or residential real property that is subject
to the mortgage, deed of trust, or other security
interest that secures the mortgage loan; and
(B) all information required by the servicer in
connection with such a request (including a copy of an
executed contract between the owner of the dwelling or
property and the prospective buyer that is subject to
approval by the servicer).
(3) Civil actions authorized.--An aggrieved individual may
bring an action in a court of competent jurisdiction, asserting
a violation of this Act. Aggrieved individuals may be awarded
all appropriate relief, including equitable relief, and a
monetary award of $1,000 per violation, plus reasonable
attorneys' fees, or such higher amount as may be appropriate in
the case of an established pattern or practice of such
failures.
(b) Inapplicability to Certain Existing Mortgages.--Subsection (a)
shall not apply with respect to any residential mortgage with respect
to which the mortgagor and the mortgagee or servicer have entered into
a written agreement before the date of enactment of this Act explicitly
providing a procedure or terms for approval of a short sale.
(c) Treatment of Other Time Limits.--This section may not be
construed to preempt, annul, or otherwise affect any other provision of
law or of any contract or program that provides a shorter period than
is provided under subsection (a) for a decision by the servicer of a
residential mortgage loan regarding a short sale of the dwelling or
residential real property that is subject to the mortgage, deed or
trust, or other security interest that secures the mortgage loan.
Prompt Notification of Short Sales Act - Requires each servicer of a home mortgage to provide in writing to a mortgagor of a residential mortgage loan specified prompt notifications and decisions regarding a written request of the mortgagor for a short sale of the dwelling or residential real property that is subject to the mortgage, deed of trust, or other security interest securing the mortgage loan. Authorizes an aggrieved individual to bring a civil action for equitable relief and a monetary award of $1,000 for any violation of this Act. Declares this Act inapplicable to certain residential mortgages entered into before its enactment whose mortgage agreements explicitly provide a procedure or terms for a short sale approval