[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 2120 Introduced in Senate (IS)]

112th CONGRESS
  2d Session
                                S. 2120

To require the lender or servicer of a home mortgage, upon a request by 
 the homeowner for a short sale, to make a prompt decision whether to 
                            allow the sale.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 16, 2012

    Ms. Murkowski (for herself, Mr. Brown of Ohio, and Mr. Brown of 
Massachusetts) introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To require the lender or servicer of a home mortgage, upon a request by 
 the homeowner for a short sale, to make a prompt decision whether to 
                            allow the sale.

    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 ``Prompt Notification of Short Sales 
Act''.

SEC. 2. PROMPT DECISION REGARDING SHORT SALE.

    (a) Requirement for Prompt Decision.--
            (1) In general.--
                    (A) Written response to mortgagor requests 
                required.--
                            (i) In general.--Each servicer shall 
                        respond in writing to a mortgagor of a 
                        residential mortgage loan who has submitted a 
                        written request that meets the requirements of 
                        paragraph (2), not later than the end of the 
                        75-calendar day period beginning on the date of 
                        receipt of such request, subject to 
                        subparagraphs (B) and (C).
                            (ii) Applicability.--Clause (i) 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.
                    (B) Content.--A written response by a servicer 
                under subparagraph (A) shall specify--
                            (i) a decision on whether such request has 
                        been denied, approved, or that such request has 
                        been approved subject to specified changes; or
                            (ii) that additional time is required, in 
                        which case the servicer shall provide a new 
                        decision date.
                    (C) Single extension of new decision date 
                authorized.--A servicer may, upon written notice to the 
                mortgagor, extend a new decision date provided under 
                subparagraph (B)(ii) one single time, for a period of 
                not longer than 21 additional calendar days.
            (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.
    (d) Definitions.--For purposes of this Act, the following 
definitions shall apply:
            (1) 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.
            (2) 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).
            (3) Servicer.--The term ``servicer'' has the same meaning 
        as in section 129A, 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.
            (4) 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--
                    (A) will result in proceeds in an amount that is 
                less than the remaining amount due under the mortgage 
                loan; and
                    (B) 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.
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