[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6116 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 6116

To allow homeowners of moderate-value homes who are subject to mortgage 
      foreclosure proceedings to remain in their homes as renters.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 21, 2008

 Mr. Grijalva introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
To allow homeowners of moderate-value homes who are subject to mortgage 
      foreclosure proceedings to remain in their homes as renters.

    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 ``Saving Family Homes Act of 2008''.

SEC. 2. RIGHT TO RENT HOME SUBJECT TO FORECLOSURE.

    (a) Exercise of Right.--If, at any time after notice under 
subsection (b) for an eligible mortgage is provided to the eligible 
mortgagor and before the commencement of the 7-day period that ends on 
the first date that the foreclosing creditor may first commence or 
execute such foreclosure pursuant to such notice, the eligible 
mortgagor under the eligible mortgage that is subject to such 
foreclosure provides notice in accordance with section 3, 
notwithstanding such foreclosure or any other interests in the 
property, the eligible mortgagor may, at the sole option of the 
eligible mortgagor, continue to occupy the foreclosed property during 
the 20-year period that begins upon the commencement of such occupancy, 
subject to the requirements of subsection (c).
    (b) Limitation on Timing of Foreclosure; Notice of Default and 
Right To Rent.--Notwithstanding any other provision of law or any 
contract, a foreclosure of an eligible mortgage may not be commenced or 
executed before the expiration of the 28-day period beginning upon the 
receipt, by the eligible mortgagor, of written notice provided by the 
foreclosing creditor for the mortgage that--
            (1) clearly states that--
                    (A) the eligible mortgagor is in default on the 
                mortgage; and
                    (B) foreclosure on the mortgage may or will be 
                commenced on account of such default;
            (2) clearly states that the eligible mortgagor has the 
        right, notwithstanding foreclosure, to continue to occupy the 
        foreclosed property in accordance with this Act, and sets forth 
        the terms of such occupancy under subsections (a) and (c); and
            (3) identifies the first date, pursuant to this section and 
        any other provisions of law and contract, that such foreclosure 
        may be commenced.
    (c) Terms of Periodic Tenancy.--Occupancy, by an eligible 
mortgagor, of a foreclosed property pursuant to subsection (a) shall be 
under a periodic month-to-month tenancy under which the owner of the 
property may terminate the tenancy for material breach but shall have 
no authority, at will, to terminate the tenancy during the occupancy 
pursuant to subsection (a) if the mortgagor--
            (1) timely pays to the owner of the foreclosed property 
        rent on a monthly basis in the amount of the fair market rent 
        for the property determined in accordance with section 4; and
            (2) uses property as the principal residence of the 
        mortgagor.

SEC. 3. REQUIRED NOTICE.

    With respect to an eligible mortgage for which notice under 
subsection (b) has been provided, notice in accordance with this 
section is notice that--
            (1) is made in writing;
            (2) is submitted to--
                    (A) the court having jurisdiction and venue to 
                conduct the covered foreclosure proceeding for the 
                eligible mortgage or, in the case of nonjudicial 
                foreclosure, the court in which an action is brought 
                pursuant to section 5; and
                    (B) the foreclosing creditor; and
            (3) states that the eligible mortgagor is exercising the 
        authority under section 2(a) to continue to occupy the 
        foreclosed property.

SEC. 4. DETERMINATION OF FAIR MARKET RENT.

    (a) Initial Determination.--For purposes of this Act, the fair 
market rent for a foreclosed property involved in a covered foreclosure 
proceeding shall be the amount that is determined by an independent 
appraiser who is licensed or certified, as applicable, to conduct 
appraisals in the jurisdiction in which the property is located, who 
shall be appointed for such purpose by the court conducting such 
proceeding or hearing an action pursuant to section 5.
    (b) Periodic Adjustments.--The fair market rent determined under 
subsection (a) for a foreclosed property shall be adjusted annually to 
reflect changes in the owners' equivalent rent of primary residence 
component, for the appropriate city, region, or class of city, as 
available, of the Consumer Price Index for All Urban Consumers of the 
Bureau of Labor Statistics of the Department of Labor.
    (c) Redetermination.--If the owner of a foreclosed property or the 
eligible mortgagor under the eligible mortgage requests the court 
described in subsection (a) to redetermine the fair market rent for a 
foreclosed property determined pursuant to this section (as such amount 
may have been adjusted pursuant to subsection (b)) and agrees to pay 
any costs of such redetermination (including costs of the appraisal 
involved), the court shall provide for redetermination of the fair 
market rent for the foreclosed property in the manner provided under 
subsection (a), except that no such redetermination shall be made 
pursuant to a request under this subsection made before the expiration 
of the 12-month period beginning upon the most recent redetermination 
conducted at the request of the same party.

SEC. 5. NONJUDICIAL FORECLOSURE PROCEEDINGS.

    In the case of any covered foreclosure proceeding that is not 
conducted or administered by a court, the eligible mortgagor may bring 
an action in an appropriate court of the State in which the foreclosed 
property is located for a determination of fair market rent for the 
foreclosed property for purposes of this Act, by filing notice in 
accordance with section 3 with such court and otherwise complying with 
the rules of such court.

SEC. 6. NO BAR TO FORECLOSURE.

    This Act may not be construed to delay, or otherwise modify, 
affect, or alter any right of a creditor under an eligible mortgage to 
foreclose on the mortgage and to sell the foreclosed property in 
connection with such foreclosure, except that the right of any owner of 
the property to possession of the property shall be subject to the 
leasehold interest established pursuant to section 2(c).

SEC. 7. RIGHT TO REINSTATEMENT.

    This Act may not be construed to affect any right of any eligible 
mortgagor to reinstatement of an eligible mortgage, including any right 
established under contract or State law.

SEC. 8. JURISDICTION OF FEDERAL COURTS.

    At the option of the eligible mortgagor, a proceeding under section 
4 or 5 shall be removed to the appropriate district court of the United 
States in accordance with section 1441 of title 28, United States Code.

SEC. 9. EFFECT ON STATE LAW.

    This Act does not annul, alter, affect, or exempt any person 
subject to the provisions of this Act from complying with the laws of 
any State regarding foreclosure on residential properties, except to 
the extent that such laws are inconsistent with any provision of this 
Act, and then only to the extent of such inconsistency.

SEC. 10. DEFINITIONS.

    For purposes of this Act, the following definitions apply:
            (1) Covered foreclosure proceeding.--The term ``covered 
        foreclosure proceeding'' means a foreclosure proceeding with 
        respect to an eligible mortgage, and includes any foreclosure 
        proceeding authorized under the law of the applicable State, 
        including judicial and non-judicial foreclosure proceedings.
            (2) Eligible mortgagor.--The term ``eligible mortgagor'' 
        means a mortgagor under an eligible mortgage.
            (3) Eligible mortgage.--The term ``eligible mortgage'' 
        means a first mortgage--
                    (A) on property that--
                            (i) is a single family property; and
                            (ii) has been used as the principal 
                        residence of the eligible mortgagor for a 
                        period of not less than 2 years immediately 
                        preceding the initiation of the covered 
                        foreclosure proceeding involved;
                    (B) that was made in connection with the purchase 
                of the property by the mortgagor for a purchase price 
                that is less than the median purchase price for 
                residences that are located in--
                            (i) the same metropolitan statistical area; 
                        or
                            (ii) if the property is not located in a 
                        metropolitan statistical area or information 
                        for the area is not available, the same State; 
                        and
                    (C) that was originated before July 1, 2007.
        For purposes of subparagraph (B), the median purchase price of 
        residences located within a metropolitan area or State shall be 
        determined according to information collected and made 
        available by the National Association of Realtors for such area 
        or State for the most recently completed month for which such 
        information is available.
            (4) Foreclosed property.--The term ``foreclosed property'' 
        means, with respect to a covered foreclosure proceeding, the 
        single family property that is subject to the eligible mortgage 
        being foreclosed under the proceeding.
            (5) Foreclosing creditor.--The term ``foreclosing 
        creditor'' means, with respect to a covered foreclosure 
        proceeding, the creditor that is foreclosing the eligible 
        mortgage through such proceeding.
            (6) Owner.--The term ``owner'' means, with respect to a 
        foreclosed property, the person who has title to the property 
        pursuant to the foreclosure proceeding for the property, and 
        any successor or assign of such person.
            (7) Single family property.--The term ``single family 
        property'' means--
                    (A) a structure consisting of 1 to 4 dwelling 
                units;
                    (B) a dwelling unit in a multi-unit condominium 
                property together with an undivided interest in the 
                common areas and facilities serving the property; or
                    (C) a dwelling unit in a multi-unit project for 
                which purchase of stock or a membership interest 
                entitles the purchaser to permanent occupancy of that 
                unit.

SEC. 11. APPLICABILITY AND SUNSET.

    (a) Applicability.--Subject to subsection (b), this Act shall apply 
to any covered foreclosure proceeding that has not been finally 
adjudicated as of the date of the enactment of this Act.
    (b) Sunset.--This Act shall not apply to any foreclosure proceeding 
commenced after the expiration of the 5-year period beginning on the 
date of the enactment of this Act.
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