Short title

This Act may be cited as the

Inactive Reservists Foreclosure Prevention Act of 2007

Mortgage assistance program

(a)

In general

The Secretary of Housing and Urban Development shall carry out a program under this Act to provide mortgage assistance through the provision of grants and loans for direct mortgage payments on behalf of eligible households. (b)

Eligible mortgages

Mortgage assistance under this Act may be provided only with respect to a mortgage that meets all of the following requirements: (1)

Mortgagor requirements

The mortgagor under the mortgage— (A)is a member of an eligible household that resides in the property that is subject to the mortgage; and (B)has not, during the 24-month period ending upon the date that the mortgagor submits an application for assistance under this Act, been more than 60 days in arrears under any mortgage for residential property. (2)

Dwelling requirements

The property that is subject to the mortgage is— (A)designed principally as a residential property; and (B)the primary place of residence of the mortgagor and the mortgagor’s household.

Assistance payments

(a)

Monthly direct payment

The Secretary shall design and implement the program under this Act in a manner that provides that any amounts paid by the Secretary for mortgage assistance with respect to an eligible mortgage are paid on a monthly basis directly to the mortgagee or other servicer of the mortgage. (b)

Period of assistance

(1)

In general

Payment under the program under this section with respect to an eligible mortgage may be made only for scheduled payments due under the terms of the mortgage (as in effect pursuant to any applicable provisions of law) during the period that a member of the eligible household who is an eligible member of the Armed Forces is serving on active duty for a period of more than 30 days in the Armed Forces. (2)

Extended deployments

The Secretary shall ensure that in determining the amount of assistance to be provided with respect to an eligible mortgage and the period for which such assistance will be provided, sufficient amounts for such assistance shall be reserved under the program under this Act to provide for unpredictability and extensions in the period of active duty of eligible members of the Armed Forces. (c)

Determination of amount of assistance

Subject to subsection (d), the Secretary shall determine the amount of assistance to be provided with respect to an eligible mortgage based upon criteria established by the Secretary, by regulation. (d)

Limitations on amount of assistance

The amount of assistance provided under the program under this Act with respect to any eligible mortgage may not exceed the following amounts: (1)

Monthly amount

With respect to the assistance payment for any single month, the amount due to be paid for such month under the terms of the mortgage (as in effect pursuant to any applicable provisions of law) for principal, interest, mortgage insurance for the mortgage, and any scheduled deposit in an escrow account for the purpose of ensuring payment of taxes, insurance, assessments, and other charges with respect to the property subject to the mortgage. (2)

Aggregate amount

An aggregate amount assistance over the entire period under subsection (b) that assistance is provided with respect to the mortgage, which shall be established by the Secretary taking into consideration the total amount made available for the program under this Act. (e)

Prevention of double payments

The Secretary shall take appropriate actions to ensure that, in the case of any payment on an eligible mortgage paid by a mortgagor for any period for which payment has already been made under the program under this Act, the mortgagor or other servicer of the mortgage shall return such payment within a reasonable period of time or shall immediately credit such payment toward amortization of the principal obligation under the mortgage, and promptly notify the mortgagor of such credit.

Repayment of assistance

(a)

Grant assistance; no repayment

(1)

In general

Any assistance provided under the program under this Act with respect to any eligible mortgage during any period during which the annual income of household of the mortgagor, as determined by the Secretary, does not exceed 200 percent of the poverty line applicable to a family of the size involved shall be in the form of a grant and, except as provided in paragraph (2), the Secretary may not require repayment of any such amounts. (2)

Repayment in cases of foreclosure

If the mortgagee for any eligible mortgage for which assistance payments are made pursuant to this subsection forecloses on the mortgage, takes legal action to enforce the mortgage obligation, or otherwise recovers possession of any security of the mortgage as a result of default on the obligation of the mortgage, the Secretary shall terminate payment of assistance under this Act with respect to the mortgage and shall treat any assistance previously provided with respect to the mortgage as assistance in the form of a loan pursuant to subsection (b). (b)

Loan assistance; repayment required

Any assistance provided under the program under this Act with respect to any eligible mortgage during any period during which the annual income of household of the mortgagor, as determined by the Secretary, exceeds 200 percent of the poverty line applicable to a family of the size involved shall be in the form of a loan, as follows: (1)

No interest

Such loan shall not bear any interest. (2)

10-year term

Such loan shall have a term to maturity of 10 years, which shall not commence until the period of assistance under section 3(b) with respect to mortgage has terminated. (3)

Security

Repayment of such loan shall be secured by a lien on the residential property that is subject to the eligible mortgage for which the assistance under this Act was provided under the loan, in the aggregate amount of such loan assistance provided. Such lien shall be held by the Secretary and shall be subordinate to other mortgages and other secured liens on the property in effect upon the date that assistance under the program under this Act is first provided for the mortgage, and to any Federal tax lien, but shall be superior to any other lien. (4)

Agreement

The terms of such loan shall be set forth in a written agreement, as the Secretary considers appropriate, between the Secretary and the mortgagor.

Application for assistance

(a)

In general

To be eligible for mortgage assistance under this Act, a mortgagor for an eligible mortgage shall submit an application for such assistance in such form and manner as the Secretary shall require, which shall provide such information regarding the eligible mortgage as the Secretary shall require, including information sufficient for the Secretary to comply with subsection (b), and shall include a financial statement disclosing all income of each member of the household of the mortgagor regardless of source. An application for such assistance may be submitted before the eligible member of the Armed Forces who is a member of the eligible household begins active duty described in section 8(2). (b)

Notification to mortgagee and servicer

Upon submission of an application under subsection (a), the Secretary shall notify the mortgagee and servicer, if the mortgagee is not the servicer, of the eligible mortgage of the submission of the application for assistance under this Act. (c)

Income information

The Secretary shall require that each such application include a certification by the mortgagor for the eligible mortgage of the anticipated income of the household of the mortgagor during the anticipated period of assistance under this Act, which, in the case of an application described in the last sentence of subsection (a), may be based on household income in the month before commencement of the active duty of the eligible member of the Armed Forces, less any such income attributable to such eligible member, plus the expected military pay of such eligible member. The Secretary may make a determination regarding compliance of the income of a mortgagor’s household with the requirements under subsections (a)(1) and (b) of section 4 based upon such a certification, subject to such reviews as the Secretary shall, by regulation, provide. (d)

Effect of Misrepresentation

A mortgagor who is determined to have intentionally misrepresented any financial information in connection with the filing of an application for assistance under this Act may be denied assistance and required to immediately repay any amount of assistance already received, and the mortgagee may, at any time thereafter, take any legal action to enforce the mortgage, if appropriate. (e)

Review and determination

(1)

In general

The Secretary shall review each application submitted for assistance under this Act and make a determination regarding the eligibility for assistance of the mortgage specified in the application not later than 30 days after receipt of the application of the mortgagor, and shall notify the mortgagor and the mortgagee and servicer of approval or disapproval of such application not later than 30 days after making the determination regarding approval. (2)

Failure to make determination

If the Secretary fails to make a determination regarding eligibility for assistance of a mortgage during the 30-day period specified in paragraph (1) or fails to provide the notice regarding such determination as required under such paragraph, the mortgage shall be considered for purposes of this Act to have been approved as eligible for assistance upon the date that the application for the mortgage was submitted to the Secretary.

Coordination with other agencies and entities

(a)

Publicity

The Secretary shall take such action as may be necessary to ensure that eligible households and eligible members of the Armed Forces are aware of and informed about the availability of and requirements for mortgage assistance under this Act, which may include consulting and coordinating appropriate activities with the Secretary of Defense, the Federal financial institutions regulatory agencies, financial institutions regulated by such regulatory agencies, other mortgage lenders, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and mortgage counseling agencies. (b)

Implementation

The Secretary shall consider using States, State or local agencies (including housing and housing finance agencies), mortgage lenders and other financial institutions, and other entities to conduct some or all of the functions and responsibilities involved in carrying out the program for mortgage assistance under this Act and may enter into agreements with such entities to provide for such entities to carry out such functions and responsibilities as the Secretary considers appropriate to ensure that such assistance is provided in an effective and efficient manner.

Savings clause

This Act may not be construed to alter, affect, or limit any provision of the Servicemembers Civil Relief Act (50 U.S.C. App. 501 et seq.).

Definitions

For the purposes of this Act, the following definitions apply: (1)

Active duty

The terms active duty and active duty for a period of more than 30 days have the meanings given such terms in section 101(d) of title 10, United States Code. (2)

Eligible member of the Armed Forces

The term eligible member of the Armed Forces means a member of the Armed Forces who, while a member of the Individual Ready Reserve or the inactive National Guard, is serving on active duty pursuant to a call or order to active duty for a period of more than 30 days. (3)

Eligible mortgage

The term eligible mortgage means any mortgage that meets the requirements of section 2(b) for assistance under this Act. (4)

Eligible household

The term eligible household means a household that— (A)contains a member who is an eligible member of the Armed Forces; and (B)has been determined by the Secretary to be eligible for mortgage assistance under this Act. (5)

Federal financial institutions regulatory agencies

The term Federal financial institutions regulatory agencies means the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and the National Credit Union Administration. (6)

Household

The term household means a mortgagor, the mortgagor’s spouse, children residing in the same residence as the mortgagor, and any other person living in such residence that is declared by the mortgagor as a dependent for Federal income tax purposes. (7)

Income

The term income means, with respect to the household of an eligible mortgagor, the aggregate income from the all sources of each member of the household, as determined in accordance with criteria prescribed by the Secretary. (8)

Mortgage; mortgagee; mortgagor

The terms mortgage, mortgagee, and mortgagor have the meanings given such terms in section 201 of the National Housing Act (12 U.S.C. 1707). (9)

Poverty line

The term poverty line has the meaning given such term in section 673(2) of the Omnibus Budget Reconciliation Act of 1981, including any revision required by such section. (10)

Secretary

The term Secretary means the Secretary of Housing and Urban Development. (11)

Servicer

The term servicer has the meaning given such term in section 6(i) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(i)).

Authorization of appropriations

There are authorized to be appropriated for mortgage assistance under this Act such sums as may be necessary for each of fiscal years 2008, 2009, 2010, 2011, and 2012.

10.

Regulations

Not later than the expiration of the 180-day period beginning on the date of the enactment of this Act, the Secretary, in consultation with the Federal financial institutions regulatory agencies, shall issue such regulations as may be necessary to carry out this Act, which shall provide for the implementation of the mortgage assistance program under this Act upon the expiration of such period.