[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 690 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                 S. 690

           To establish the Office of the Homeowner Advocate.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 30, 2011

Mr. Franken (for himself, Ms. Snowe, Mr. Menendez, Mr. Rockefeller, Mr. 
 Durbin, Mr. Sanders, Mr. Brown of Ohio, Mrs. Shaheen, Mr. Lautenberg, 
   Mr. Leahy, Mr. Reed, Mr. Merkley, and Mrs. Murray) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
           To establish the Office of the Homeowner Advocate.

    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 ``Homeowner Advocate Act of 2011''.

SEC. 2. OFFICE OF THE HOMEOWNER ADVOCATE.

    (a) Establishment.--There is established in the Department of the 
Treasury an office to be known as the ``Office of the Homeowner 
Advocate'' (in this Act referred to as the ``Office'').
    (b) Director.--
            (1) In general.--The Director of the Office of the 
        Homeowner Advocate (in this Act referred to as the 
        ``Director'') shall report directly to the Assistant Secretary 
        of the Treasury for Financial Stability, and shall be entitled 
        to compensation at the same rate as the highest rate of basic 
        pay established for the Senior Executive Service under section 
        5382 of title 5, United States Code.
            (2) Appointment.--The Director shall be appointed by the 
        Secretary, after consultation with the Secretary of the 
        Department of Housing and Urban Development, and without regard 
        to the provisions of title 5, United States Code, relating to 
        appointments in the competitive service or the Senior Executive 
        Service.
            (3) Qualifications.--An individual appointed under 
        paragraph (2) shall have--
                    (A) experience as an advocate for homeowners; and
                    (B) experience dealing with mortgage servicers.
            (4) Restriction on employment.--An individual may be 
        appointed as Director only if such individual was not an 
        officer or employee of either a mortgage servicer or the 
        Department of the Treasury during the 4-year period preceding 
        the date of such appointment.
            (5) Hiring authority.--The Director shall have the 
        authority to hire staff, obtain support by contract, and manage 
        the budget of the Office of the Homeowner Advocate.

SEC. 3. FUNCTIONS OF THE OFFICE.

    (a) In General.--It shall be the function of the Office--
            (1) to assist homeowners, housing counselors, and housing 
        lawyers in resolving problems with the Home Affordable 
        Modification Program of the Making Home Affordable initiative 
        of the Secretary, authorized under the Emergency Economic 
        Stabilization Act of 2008 (in this Act referred to as the 
        ``Home Affordable Modification Program'');
            (2) to identify areas, both individual and systematic, in 
        which homeowners, housing counselors, and housing lawyers have 
        problems in dealings with the Home Affordable Modification 
        Program;
            (3) to the extent possible, to propose changes in the 
        administrative practices of the Home Affordable Modification 
        Program, to mitigate problems identified under paragraph (2);
            (4) to identify potential legislative changes which may be 
        appropriate to mitigate such problems; and
            (5) to implement other programs and initiatives that the 
        Director deems important to assisting homeowners, housing 
        counselors, and housing lawyers in resolving problems with the 
        Home Affordable Modification Program, which may include--
                    (A) running a triage hotline for homeowners at risk 
                of foreclosure;
                    (B) providing homeowners with access to housing 
                counseling programs of the Department of Housing and 
                Urban Development at no cost to the homeowner;
                    (C) developing Internet tools related to the Home 
                Affordable Modification Program; and
                    (D) developing training and educational materials.
    (b) Authority.--
            (1) In general.--Staff designated by the Director shall 
        have the authority to implement servicer remedies, on a case-
        by-case basis, subject to the approval of the Assistant 
        Secretary of the Treasury for Financial Stability.
            (2) Resolution of homeowner concerns.--The Office shall, to 
        the extent possible, resolve all homeowner concerns not later 
        than 30 days after the opening of a case with such homeowner.
    (c) Commencement of Operations.--The Office shall commence its 
operations, as required by this Act, not later than 3 months after the 
date of enactment of this Act.
    (d) Sunset.--The Office shall cease operations as of the date on 
which the Home Affordable Modification Program ceases to operate.

SEC. 4. RELATIONSHIP WITH EXISTING ENTITIES.

    (a) Transfer.--The Office shall coordinate and centralize all 
complaint escalations relating to the Home Affordable Modification 
Program.
    (b) Hotline.--The HOPE hotline (or any successor triage hotline) 
shall reroute all complaints relating to the Home Affordable 
Modification Program to the Office.
    (c) Coordination.--The Office shall coordinate with the compliance 
office of the Office of Financial Stability of the Department of the 
Treasury and the Homeownership Preservation Office of the Department of 
the Treasury.

SEC. 5. RULE OF CONSTRUCTION.

    Nothing in this Act shall prohibit a mortgage servicer from 
evaluating a homeowner for eligibility under the Home Affordable 
Foreclosure Alternatives Program while a case is still open with the 
Office of the Homeowner Advocate. Nothing in this Act may be construed 
to relieve any loan services from otherwise applicable rules, 
directives, or similar guidance under the Home Affordable Modification 
Program relating to the continuation or completion of foreclosure 
proceedings.

SEC. 6. REPORTS TO CONGRESS.

    (a) Testimony.--The Director shall be available to testify before 
the Committee on Banking, Housing, and Urban Affairs of the Senate and 
the Committee on Financial Services of the House of Representatives, 
not less frequently than 4 times a year, or at any time at the request 
of the Chairs of either committee.
    (b) Reports.--Once annually, the Director shall provide a detailed 
report to Congress on the Home Affordable Modification Program. Such 
report shall contain full and substantive analysis, in addition to 
statistical information, including, at a minimum--
            (1) data and analysis of the types and volume of complaints 
        received from homeowners, housing counselors, and housing 
        lawyers, broken down by category of servicer, except that 
        servicers may not be identified by name in the report;
            (2) a summary of not fewer than 20 of the most serious 
        problems encountered by Home Affordable Modification Program 
        participants, including a description of the nature of such 
        problems;
            (3) to the extent known, identification of the 10 most 
        litigated issues for Home Affordable Modification Program 
        participants, including recommendations for mitigating such 
        disputes;
            (4) data and analysis on the resolutions of the complaints 
        received from homeowners, housing counselors, and housing 
        lawyers;
            (5) identification of any programs or initiatives that the 
        Office has taken to improve the Home Affordable Modification 
        Program;
            (6) recommendations for such administrative and legislative 
        action as may be appropriate to resolve problems encountered by 
        Home Affordable Modification Program participants; and
            (7) such other information as the Director may deem 
        advisable.

SEC. 7. FUNDING.

    Amounts made available for the costs of administration of the Home 
Affordable Modification Program that are not otherwise obligated shall 
be available to carry out the duties of the Office. Funding shall be 
maintained at levels adequate to reasonably carry out the functions of 
the Office.

SEC. 8. PROHIBITION ON PARTICIPATION IN MAKING HOME AFFORDABLE FOR 
              BORROWERS WHO STRATEGICALLY DEFAULT.

    No mortgage may be modified under the Making Home Affordable 
Program, or with any funds from the Troubled Asset Relief Program, 
unless the servicer of the mortgage loan has determined, in accordance 
with standards and requirements established by the Secretary of the 
Treasury, that the mortgagor cannot afford to make payments under the 
terms of the existing mortgage loan. The Secretary of the Treasury, in 
consultation with the Secretary of Housing and Urban Development, shall 
issue rules to carry out this section not later than 90 days after the 
date of enactment of this Act. This section shall not apply to any 
refinancing or modifications made under the ``FHA Program Adjustments 
to Support Refinancings for Underwater Homeowners,'' announced by the 
Department of the Treasury and the Department of Housing and Urban 
Development on March 26, 2010, as long as the program continues to be 
structured so that borrowers participating in the FHA refinance program 
cannot be in default on their primary mortgage at the time of refinance 
and their eligibility in the program is not helped if they are in 
default on their second mortgage, and thus lack a strategic reason to 
go into default on either their first or second mortgage to participate 
in the program.

SEC. 9. PUBLIC AVAILABILITY OF INFORMATION.

    (a) Public Availability of Data.--The Secretary of the Treasury 
shall revise the guidelines for the Home Affordable Modification 
Program of the Making Home Affordable initiative of the Secretary of 
the Treasury, authorized under the Emergency Economic Stabilization Act 
of 2008 (Public Law 110-343), to establish that the data collected by 
the Secretary of the Treasury from each mortgage servicer and lender 
participating in the Program is made public in accordance with 
subsection (b).
    (b) Content.--Not more than 60 days after each monthly deadline for 
submission of data by mortgage servicers and lender participating in 
the program, the Treasury shall make all data tables available to the 
public at the individual record level. This data shall include but not 
be limited to--
            (1) higher risk loans, including loans made in connection 
        with any program to provide expanded loan approvals, shall be 
        reported separately;
            (2) disclose--
                    (A) the rate or pace at which such mortgages are 
                becoming seriously delinquent;
                    (B) whether such rate or pace is increasing or 
                decreasing;
                    (C) if there are certain subsets within the loans 
                covered by this section that have greater or lesser 
                rates or paces of delinquency; and
                    (D) if such subsets exist, the characteristics of 
                such subset of mortgages;
            (3) with respect to the loss mitigation efforts of the 
        loan--
                    (A) the processes and practices that the reporter 
                has in effect to minimize losses on mortgages covered 
                by this section; and
                    (B) the manner and methods by which such processes 
                and practices are being monitored for effectiveness;
            (4) disclose, with respect to loans that are or become 60 
        or more days past due, (provided that for purposes of 
        disclosure under this paragraph that each loan should have a 
        unique number that is not the same as any loan number the 
        borrower, originator, or servicer uses), the following 
        attributes--
                    (A) the original loan amount;
                    (B) the current loan amount;
                    (C) the loan-to-value ratio and combined loan-to-
                value ratio, both at origination and currently, and the 
                number of liens on the property;
                    (D) the property valuation at the time of 
                origination of the loan, and all subsequent property 
                valuations and the date of each valuation;
                    (E) each relevant credit score of each borrower 
                obtained at any time in connection with the loan, with 
                the date of the credit score, to the extent allowed by 
                existing law;
                    (F) whether the loan has any mortgage or other 
                credit insurance or guarantee;
                    (G) the current interest rate on such loan;
                    (H) any rate caps and floors if the loan is an 
                adjustable rate mortgage loan;
                    (I) the adjustable rate mortgage index or indices 
                for such loan;
                    (J) whether the loan is currently past due, and if 
                so how many days such loan is past due;
                    (K) the total number of days the loan has been past 
                due at any time;
                    (L) whether the loan is subject to a balloon 
                payment;
                    (M) the date of each modification of the loan;
                    (N) whether any amounts of loan principal has been 
                deferred or written off, and if so, the date and amount 
                of each deferral and the date and amount of each 
                writedown;
                    (O) whether the interest rate was changed from a 
                rate that could adjust to a fixed rate, and if so, the 
                period of time for which the rate will be fixed;
                    (P) the amount by which the interest rate on the 
                loan was reduced, and for what period of time it was 
                reduced;
                    (Q) if the interest rate was reduced or fixed for a 
                period of time less than the remaining loan term, on 
                what dates, and to what rates, could the rate 
                potentially increase in the future;
                    (R) whether the loan term was modified, and if so, 
                whether it was extended or shortened, and by what 
                amount of time;
                    (S) whether the loan is in the process of 
                foreclosure or similar procedure, whether judicial or 
                otherwise; and
                    (T) whether a foreclosure or similar procedure, 
                whether judicial or otherwise, has been completed.
    (c) Guidelines and Regulations.--The Secretary of the Treasury 
shall establish guidelines and regulations necessary--
            (1) to ensure that the privacy of individual consumers is 
        appropriately protected in the reports under this section;
            (2) to make the data reported under this subsection 
        available on a public Web site with no cost to access the data, 
        in a consistent format;
            (3) to update the data no less frequently than monthly;
            (4) to establish procedures for disclosing such data to the 
        public on a public Web site with no cost to access the data; 
        and
            (5) to allow the Secretary to make such deletions as the 
        Secretary may determine to be appropriate to protect any 
        privacy interest of any loan modification applicant, including 
        the deletion or alteration of the applicant's name and 
        identification number.
    (d) Exception.--No data shall have to be disclosed if it voids or 
violates existing contracts between the Secretary of Treasury and 
mortgage servicers as part of the Making Home Affordable Program.
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