[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6395 Introduced in House (IH)]

112th CONGRESS
  2d Session
                                H. R. 6395

   To provide homeowners with additional protections and safeguards 
              against foreclosure, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 13, 2012

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

_______________________________________________________________________

                                 A BILL


 
   To provide homeowners with additional protections and safeguards 
              against foreclosure, 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 ``Foreclosure Accountability and 
Transparency Act''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Alternative to foreclosure.--The term ``alternative to 
        foreclosure''--
                    (A) means a course of action with respect to a 
                mortgage offered to a borrower as an alternative to a 
                foreclosure action; and
                    (B) includes a short sale and deed in lieu of 
                foreclosure.
            (2) Borrower.--The term ``borrower'' means a mortgagor who 
        is in default on their covered residential mortgage.
            (3) Covered residential mortgage.--The term ``covered 
        residential mortgage'' means a federally related mortgage loan, 
        as defined in section 3(1) of the Real Estate Settlement 
        Procedures Act of 1974 (12 U.S.C. 2602(1)), that is secured by 
        a first or subordinate lien on residential real property.
            (4) Foreclosure action.--The term ``foreclosure action'' 
        means a judicial or nonjudicial foreclosure.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.

SEC. 3. HOMEOWNER BILL OF RIGHTS.

    (a) Action Required Before Commencing Foreclosure.--Notwithstanding 
any other provision of State or Federal law, no foreclosure action may 
be commenced with respect to a covered residential mortgage unless the 
person commencing the foreclosure complies with the following 
requirements:
            (1) Notice.--
                    (A) In general.--
                            (i) Notification.--The borrower shall be 
                        notified of the foreclosure action that may be 
                        taken, and such notice shall provide detailed 
                        information that includes the following:
                                    (I) A statement of any rights of 
                                the borrower under the applicable laws 
                                governing the foreclosure action and 
                                consumer rights.
                                    (II) A statement of any deadlines 
                                for filing answers, defenses, or 
                                objections to the foreclosure action, 
                                including those rights of the borrower 
                                under the Real Estate Settlement 
                                Procedures Act of 1974 (12 U.S.C. 2601 
                                note) and any applicable State laws.
                                    (III) A statement of any penalties 
                                and other consequences for the borrower 
                                if such borrower does not respond or 
                                file answers to the foreclosure action.
                                    (IV) A statement of the amounts 
                                claimed to be in arrears under the 
                                covered residential mortgage and 
                                amounts needed to reinstate the account 
                                and all associated costs and fees, set 
                                forth in itemized and distinct 
                                categories.
                                    (V) A statement of current contact 
                                information, including telephone 
                                numbers, electronic mail addresses, and 
                                postal addresses, at which the borrower 
                                can obtain further information 
                                regarding the mortgage account.
                                    (VI) A description of--
                                            (aa) any additional 
                                        options, such as a mortgage 
                                        workout, modification, 
                                        mitigation, redemption, and 
                                        other alternatives to 
                                        foreclosure that might be 
                                        available to the borrower to 
                                        prevent the foreclosure action 
                                        from proceeding; and
                                            (bb) how the borrower can 
                                        obtain additional information 
                                        regarding such options.
                                    (VII) A statement of the correct 
                                names, telephone numbers, electronic 
                                mail addresses, postal addresses, and 
                                any State licensing numbers of the 
                                mortgage holder, the mortgage servicer, 
                                and the person or persons authorized to 
                                take the actions described pursuant to 
                                subclause (V).
                            (ii) Accepted means of notification.--The 
                        notification given pursuant to clause (i) shall 
                        be made in writing, by electronic mail (if such 
                        information is known), by telephone, and by 
                        making an in-person visit to the property that 
                        secures the loan in connection with the covered 
                        residential mortgage.
                    (B) Appeal.--
                            (i) Filing.--The borrower may file an 
                        appeal with the Secretary to dispute the 
                        accuracy of the information contained in the 
                        notice described in subparagraph (A).
                            (ii) Timing.--The person commencing the 
                        foreclosure shall have 30 days after an appeal 
                        is filed under clause (i) to submit to the 
                        Secretary documentation supporting the 
                        information provided in the notification 
                        provided under subparagraph (A)(i).
                            (iii) Determination.--The Secretary shall 
                        make a determination as to whether or not the 
                        information contained in the notice described 
                        in subparagraph (A) is accurate and if 
                        foreclosure action is permitted not later than 
                        30 days after the documentation is submitted 
                        under clause (ii).
            (2) HUD certified counselors.--
                    (A) In general.--A borrower notified pursuant to 
                paragraph (1)(A) may seek assistance from a HUD-
                approved housing counseling agency described under 
                section 106 of the Housing and Urban Development Act of 
                1968 (12 U.S.C. 1701x) to act as their agent in 
                connection with the foreclosure action.
                    (B) Documentation.--If a borrower seeks assistance 
                from a HUD-approved housing counseling agency under 
                subparagraph (A), all information and documentation in 
                connection with the foreclosure action shall be 
                provided to such counseling agency.
            (3) Homeowner action.--
                    (A) Application.--
                            (i) In general.--A borrower shall have not 
                        less than the 60-day period after a 
                        notification under paragraph (1)(A) is received 
                        to apply for a loan modification or commence an 
                        alternative to foreclosure, and no foreclosure 
                        action shall be initiated before the end of 
                        such period.
                            (ii) Tolling.--The 60-day period described 
                        in clause (i) shall be tolled during any period 
                        of time in which the borrower has filed an 
                        appeal pursuant to paragraph (1)(B) and the 
                        Secretary, with respect to such appeal, has not 
                        made a determination pursuant to clause (iii) 
                        of such paragraph.
                    (B) Homeowner modification or alternatives to 
                foreclosure.--If a borrower applies for a loan 
                modification or submits documentation indicating that 
                such borrower is seeking an alternative to foreclosure 
                during the 60-day period described in subparagraph (A), 
                the foreclosure action may not be initiated against 
                such borrower until reasonable efforts have been made 
                by the person commencing the foreclosure action to 
                determine whether the borrower is eligible for a loan 
                modification or an alternative to foreclosure.
                    (C) Explanation of denial.--If a borrower is 
                declared ineligible for a loan modification or 
                alternative to foreclosure, such borrower shall be 
                given an explanation that includes the reasons why such 
                borrower is ineligible.
    (b) Bar to Foreclosure Actions.--A violation of this section shall 
be a bar to a foreclosure action.
    (c) Certification.--At the completion of a foreclosure action, the 
person who commenced such action shall certify that all Federal, State, 
and local laws and regulations were followed with respect to the 
foreclosure action and submit all applicable documentation (as such 
term is defined in regulations promulgated by the Secretary to carry 
out this Act) in connection with such action to the--
            (1) borrower who was a party to the foreclosure action;
            (2) recorder's office in the municipality that the property 
        that secures the loan in connection with the covered 
        residential mortgage is located; and
            (3) Secretary.
    (d) Rule of Construction.--Nothing in this Act may be construed as 
to require a person commencing a foreclosure action under this section 
to comply with the requirements under subsection (a) in the case of a 
borrower who--
            (1) was approved for a loan modification in connection with 
        a covered residential mortgage after applying for such 
        modification pursuant to subsection (a)(3)(A);
            (2) had the terms of such mortgage modified after such 
        approval; and
            (3) is in default on such mortgage.
    (e) Relation to State Law.--This Act does not annul, alter, or 
affect, or exempt any person subject to the provisions of this Act from 
complying with, the laws of any State or subdivision thereof with 
respect to a foreclosure action on a covered residential mortgage, 
except to the extent that those laws are inconsistent with any 
provision of this Act, and then only to the extent of the 
inconsistency. No provision of the laws of any State or subdivision 
thereof may be determined to be inconsistent with any provision of this 
Act if such law is determined to require greater disclosure or notice 
than is required under this Act or to provide greater protection to the 
borrower than is required under this Act.
    (f) Regulations.--Not later than 90 days after the date of the 
enactment of this Act, the Secretary shall issue regulations to carry 
out this Act.

SEC. 4. EFFECTIVE DATE.

    This Act shall take effect upon the expiration of the 90-day period 
beginning on the date of the enactment of this Act, and shall apply to 
covered residential mortgages in which foreclosure action has not 
commenced.
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