[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 361 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                 S. 361

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 14, 2013

  Ms. Murkowski (for herself, Mr. Brown, Mr. Enzi, Mr. Menendez, Mr. 
 Reed, and Mr. Merkley) 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. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
     (a) 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.
    (b) 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).
    (c) Servicer.--The term ``servicer'' has the same meaning as in 
section 129A of the Truth in Lending Act (15 U.S.C. 1639a), as so 
designated by section 1402(a)(1) of Public Law 111-203, 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.
    (d) 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--
            (1) will result in proceeds in an amount that is less than 
        the remaining amount due under the mortgage loan; and
            (2) 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.

SEC. 3. PROMPT NOTIFICATIONS AND DECISION REGARDING SHORT SALE.

    (a) Requirement for Prompt Notifications, Decisions.--
            (1) Notifications.--
                    (A) In general.--Each servicer shall provide in 
                writing to a mortgagor of a residential mortgage loan--
                            (i) an acknowledgment of receipt of a 
                        written request of the mortgagor, not later 
                        than 3 days after the date of such receipt;
                            (ii) a notice of any missing or incomplete 
                        information required with respect to such 
                        request, not later than 5 days after the date 
                        of such receipt; and
                            (iii) a definitive response to such request 
                        approving or denying such request, not later 
                        than 30 days after the date of such receipt.
                    (B) Exceptional circumstances.--In any case in 
                which a servicer is unable to provide a decision with 
                respect to a written request of a mortgagor of a 
                residential mortgage loan during the 30-day period 
                required by subparagraph (A), such period may be 
                extended to not later than 60 days after the date of 
                receipt of a completed application, except that the 
                servicer shall, verbally or in writing--
                            (i) notify the mortgagor during the initial 
                        30-day period that the application is still 
                        under review; and
                            (ii) each week thereafter provide to the 
                        mortgagor a status update indicating the 
                        reasons why a decision is pending beyond the 
                        required 30-day period.
                    (C) Applicability.--Subparagraph (A) 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.
                    (D) Content.--A written response by a servicer 
                under subparagraph (A) shall specify a decision on 
                whether such request has been denied, approved, or that 
                such request has been approved subject to specified 
                changes.
            (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.
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