[Congressional Record Volume 153, Number 79 (Monday, May 14, 2007)]
[Senate]
[Pages S6065-S6069]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. NELSON of Florida:

[[Page S6065]]

  S. 1385. A bill to designate the United States courthouse facility 
located at 301 North Miami Avenue, Miami, Florida, as the ``C. Clyde 
Atkins United States Courthouse''; to the Committee on Environment and 
Public Works.
  Mr. NELSON of Florida. Mr. President, I have introduced a bill that 
will honor one of Florida's great jurists, the Honorable C. Clyde 
Atkins, by naming the Federal building at 301 North Miami Avenue in 
Miami, FL, the ``C. Clyde Atkins United States Courthouse.'' This is a 
fitting tribute to Judge Atkins. His public service provides a model 
for members of the legal profession, indeed, for all Americans, who 
respect the rule of law and believe in equal justice under law.
  Before becoming a judge, Judge Atkins, who earned his law degree at 
the University of Florida, already had distinguished himself in private 
practice. He served as the president of both the Florida bar and the 
Dade County Bar Association. In 1966, President Johnson appointed Judge 
Atkins to serve on the U.S. District Court for the Southern District of 
Florida. He served until his death in 1999 at the age of 84. From 1977 
until 1982, Judge Atkins was the chief judge for the Southern District, 
and his leadership ensured that the court remained effective through a 
period when Miami confronted serious problems involving refugees, 
violence, and drug smuggling.
  Judge Atkins rendered important decisions in the areas of civil 
rights and civil liberties. By the luck of the draw, he was assigned to 
many controversial cases, earning him the nickname ``Hard Luck Clyde,'' 
and it was for those rulings, often involving important civil rights 
and civil liberties issues, that he will be best remembered.
  For example, in a decision involving Miami's homeless population, he 
ordered the creation of ``safe zones'' where the homeless could 
congregate without fear of arrest. This important decision had a ripple 
effect, helping to give rise to efforts throughout the Nation to 
rehabilitate the homeless through training and the creation of 
shelters. He also ruled in support of Cuban and Haitian refugees who 
were held at Guantanamo Bay, Cuba, and against the government's 
repatriation policy. And finally, he presided over the desegregation of 
Dade County's public schools for more than 20 years.
  Judge Atkins was a person of faith. He was the first Catholic 
appointed to the bench in the Southern District, and Pope Benedict VI 
named him a Knight of St. Gregory. Judge Atkins also earned recognition 
from the National Conference of Christians and Jews, the Anti-
Defamation League, and the American Judicature Society, to name a few.
  The proposal to name the courthouse in Miami after Judge Atkins has 
been supported by leaders of the bar in the Southern District, 
including the Dade County Bar Association. Passage of my bill will 
ensure that the C. Clyde Atkins Courthouse will stand as an enduring 
tribute to an admired and respected Federal judge and the principles 
for which he stood for generations to come.
                                 ______
                                 
      By Mr. REED:
  S. 1386. A bill to amend the Housing and Urban Development Act of 
1968, to provide better assistance to low- and moderate-income 
families, and for other purposes; to the Committee on Banking, Housing, 
and Urban Affairs.
  Mr. REED. Mr. President, today I introduce the Homeownership 
Protection and Enhancement Act of 2007, HOPE Act. This legislation 
would reauthorize and amend Section 106 of the Housing and Urban 
Development Act of 1968, so that we can improve on Federal efforts to 
support and sustain homeownership.
  As we all know, during the past several years, housing prices in 
cities and States around the country have far outpaced any increase in 
wages. Families have been stretching themselves financially to get into 
homeownership, and many families have started using alternative or 
exotic mortgages loan products to purchase their homes.
  According to First American Loan Performance, in 2006, in my own 
State of Rhode Island, nearly 16 percent of all home-purchase loans 
were ``interest only.'' However, as home prices have declined, many 
people who took out these exotic loans are now finding they owe more 
than the value of their property.
  The Center for Responsible Lending estimates that nationally one in 
five subprime loans originated during the prior 2 years will end in 
foreclosure, costing homeowners $164 billion, mostly in lost equity.
  `It appears that we are just at the beginning of what could be a 
perfect storm, as many credit-stressed borrowers still face resets of 
these exotic adjustable-rate and payment option loans. There were 1.2 
million foreclosures reported nationwide last year, up 42 percent from 
2005, according to RealtyTrac, a database of foreclosed properties. 
RealtyTrac also reports 430,000 foreclosure filings in the first 
quarter of 2007, a 35 percent jump over the same period in 2006.
  The increasing rate of foreclosures across the country is troubling. 
Not only are individual families losing their homes and their financial 
nest eggs, but there is a negative ripple effect across communities and 
the economy. That is why I am introducing the Homeownership Protection 
and Enhancement Act, or HOPE Act.
  This bill seeks to help States establish and enhance outreach 
programs to proactively find homeowners at risk of losing their homes 
and help them avoid foreclosure. States will be rewarded for having set 
up effective programs to help curtail foreclosures with additional 
funding and resources. An incentive is provided for more States to 
follow suit and reach out to delinquent borrowers, offer them access to 
financial counseling, and, when appropriate, help them negotiate a plan 
to restructure their debt.
  In particular, the HOPE Act provides $50 million for the creation and 
operation of State Homeownership Protection Centers. The centers can 
serve as a one-stop resource, offering consumers a broad range of 
services and assistance, such as financial assessments, counseling, or 
referrals to families in need. It authorizes $260 million in 
competitive grants to States who operate State Homeownership Protection 
Centers for revolving loan funds to offer one-time grants or subsidized 
loans to qualified families. It increases funding to $300 million for 
effective HUD-approved counseling agencies. Finally, it sets aside $5 
million for the creation of a Federal database on defaults and 
foreclosures to improve oversight of public and private efforts to 
sustain homeownership.
  In addition, to help prevent future borrowers from taking on 
unsustainable mortgages and falling into foreclosure, the HOPE Act 
would create an affirmative duty for lenders and servicers to engage in 
reasonable loss mitigation prior to foreclosure. It would also require 
notifications by lenders and servicers to borrowers regarding the full 
array of counseling services available in their State at every critical 
step, at application, at closing, and upon delinquency. Finally, if a 
State has a State Homeownership Protection Center, lenders and 
servicers would be required to refer borrowers who are 60 days or more 
delinquent to the center so that it can proactively attempt to reach 
distressed borrowers.
  I am introducing the HOPE Act because when homes get foreclosed on, 
it is not just the borrowers and lenders who pay the price, whole 
neighborhoods suffer. Housing industry experts estimate that for every 
foreclosure within an eighth of a mile of a house, two and a half city 
blocks in every direction, the property value of surrounding homes 
drops by about 1 percent. I believe that the Federal Government has a 
responsibility to step in and ensure that millions of Americans, 
including neighbors who never took out a risky loan and have scrimped 
and saved to pay their bills on time, are not adversely affected by the 
subprime foreclosure crisis.
  This legislation is targeted relief that will help more families keep 
their homes and save communities nationwide millions of dollars. We 
need to act swiftly before personal financial tragedies turn into a 
full blown national financial crisis.
  The HOPE Act will set us on the path to meeting an important national 
goal, creating sustainable homeownership. I hope my colleagues will 
join me in supporting this bill and other foreclosure prevention 
efforts.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.

[[Page S6066]]

  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1386

       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 ``Homeownership Protection and 
     Enhancement Act of 2007''.

     SEC. 2. REFORM OF SECTION 106 OF THE HOUSING AND URBAN 
                   DEVELOPMENT ACT OF 1968.

       Section 106 of the Housing and Urban Development Act of 
     1968 (12 U.S.C. 1701x) is amended--
       (1) in subsection (c)--
       (A) in paragraph (3)--
       (i) in subparagraph (A)(ii), by striking ``; and'' and 
     inserting ``; or''; and
       (ii) in subparagraph (A)(iii), by striking ``involving 
     principal'' and all that follows through ``the appraised'' 
     and inserting ``in which a homeowner has total equity equal 
     to less than 3 percent of the appraised'';
       (B) in paragraph (4)--
       (i) in subparagraph (C)--

       (I) in clause (i), by striking ``; or'' and inserting a 
     semicolon;
       (II) in clause (ii), by striking the period at the end and 
     inserting a semicolon;
       (III) by adding at the end the following:

       ``(iii) a significant reduction in the income of the 
     household due to divorce or death; or
       ``(iv) a significant increase in basic expenses of the 
     homeowner or an immediate family member of the homeowner 
     (including the spouse, child, or parent for whom the 
     homeowner provides substantial care or financial assistance) 
     due to--

       ``(I) an unexpected or significant increase in medical 
     expenses;
       ``(II) a divorce;
       ``(III) unexpected and significant damage to the property, 
     the repair of which will not be covered by private or public 
     insurance;
       ``(IV) a large property-tax increase; or
       ``(V) a large increase in condominium or cooperative fees, 
     dues, or assessments; or''; and

       (ii) by adding at the end the following:
       ``(D) the Secretary of Housing and Urban Development 
     determines that the annual income of the homeowner is no 
     greater than the annual income established by the Secretary 
     as being of low- or moderate-income.'';
       (C) in paragraph (5)--
       (i) by striking subparagraph (A) and inserting a new 
     subparagraph (A) as follows:
       ``(A) Notification of availability of pre-purchase 
     homeownership counseling, homeownership counseling, and 
     homeownership protection center services.--
       ``(i) Notification to mortgage applicants at time of 
     mortgage application.--

       ``(I) In general.--A proposed mortgagee shall provide 
     notice to any applicant for a mortgage described in paragraph 
     (4).
       ``(II) Content of notice.--The notice required under 
     subclause (I) shall--

       ``(aa) if provided to an eligible mortgage applicant, state 
     that completion of a counseling program is required for 
     insurance pursuant to section 203 of the National Housing Act 
     (12 U.S.C.1709);
       ``(bb) notify the mortgage applicant of the availability of 
     homeownership counseling provided by non-profit organizations 
     approved by the Secretary and experienced in the provision of 
     pre-purchase homeownership counseling, or provide the toll-
     free telephone number established by the Secretary under 
     subparagraph (D)(i); and
       ``(cc) notify the mortgage applicant or homeowner by a 
     statement or notice, written in plain English by the 
     Secretary of Housing and Urban Development, in consultation 
     with the Secretary of Defense and the Secretary of the 
     Treasury, explaining the mortgage and foreclosure rights of 
     servicemembers, and the dependents of such servicemembers, 
     under the Servicemembers Civil Relief Act (50 U.S.C. App. 501 
     et seq.), including the toll-free military one source number 
     to call if servicemembers, or the dependents of such 
     servicemembers, require further assistance.
       ``(ii) Notification at time of closing of availability of 
     counseling upon delinquency and services of state 
     homeownership protection centers.--

       ``(I) In general.--At the time of closing, and together 
     with the final signed loan documents, a mortgagee shall 
     provide to the homeowner a plain language statement in 
     conspicuous 16-point type or larger which shall include the 
     following:

       ``(aa) Counseling statement.--A counseling statement that 
     reads as follows:

     ``If you are more than 30 days late on your mortgage 
     payments, your lender or loan servicer is required by law to 
     notify you of agencies approved by the United States 
     Department of Housing and Urban Development (HUD) that may be 
     able to assist you, including the contact information for 
     your State Homeownership Protection Center if there is one 
     operating in your State. Before you miss another mortgage 
     payment, you are strongly encouraged to contact your lender 
     or loan servicer or one of the agencies on the approved list 
     for assistance. If you are more than 60 days late on your 
     mortgage payments, your lender or loan servicer is required 
     by law to send you a second notification containing this 
     information. In addition, if you are more than 60 days late 
     on your mortgage payment and you are registered with a State 
     Homeownership Protection Center, your lender or loan servicer 
     also will be required to notify the Center, so that the 
     Center can contact you regarding any assistance it may be 
     able to provide.

       ``(bb) Counseling agency listing.--A listing of at least 5 
     housing counseling agencies approved by the Department of 
     Housing and Urban Development, at least 1 of which is located 
     in the State in which the property to be mortgaged is 
     located.
       ``(cc) Toll-free number.--The listing of the toll-free 
     telephone number established by the Secretary under 
     subparagraph (D)(i).
       ``(dd) Contact information for state homeownership 
     protection center.--The contact information, including 
     telephone number, email address, and physical address of the 
     State Homeownership Protection Center, if such a Center is 
     operating in the State in which the property to be mortgaged 
     is located.
       ``(ee) Notice to servicemembers or dependents of 
     servicemembers.--A statement, written in plain English, 
     drafted by the Secretary of Housing and Urban Development, in 
     consultation with the Secretary of Defense and the Secretary 
     of the Treasury, explaining the mortgage and foreclosure 
     rights of servicemembers, and the dependents of such 
     servicemembers, under the Servicemembers Civil Relief Act (50 
     U.S.C. App. 501 et seq.), including the toll-free military 
     one source number to call if servicemembers, or the 
     dependents of such servicemembers, require further 
     assistance.
       ``(ff) Summary of duty to engage in loss mitigation.--A 
     brief summary of the obligation of the mortgagee to engage in 
     reasonable loss mitigation activities for the purpose of 
     providing an alternative to foreclosure, including language 
     informing the homeowner that the mortgagee's failure to 
     comply with such loss mitigation requirements constitutes a 
     defense to the foreclosure.

       ``(II) Manner of disclosure.--

       ``(aa) 1 document.--At the discretion of the mortgagee, the 
     mortgagee may provide all the information required under 
     clause (I) in one single document.
       ``(bb) Required description of document at closing.--A 
     mortgagee shall briefly describe the document in item (aa) to 
     the homeowner during closing.

       ``(III) Other requirements at time of closing for 
     mortgagees operating in a state where a state homeownership 
     protection center is located.--

       ``(aa) Registration with state homeownership protection 
     centers.--In addition to the required documents described in 
     subclauses (I) and (II), at the time of closing the mortgagee 
     shall explain in writing and verbally that the homeowner's 
     name and contact information will be registered with a State 
     Homeownership Protection Center so that the Center can 
     attempt to reach the homeowner if the homeowner is 60 days or 
     more late in making any mortgage payment.
       ``(bb) Brochures.--The mortgagee shall distribute to a 
     homeowner any brochure, pamphlet, or other brief document 
     prepared by the State Homeownership Protection Center that 
     describes the services provided by the Center.
       ``(cc) Duty of mortgagee to forward information.--The 
     mortgagee shall forward to the State Homeownership Protection 
     Center the contact information of the mortgage applicant and 
     shall agree to notify the Center if the mortgage payment of 
     the homeowner is or becomes more than 60 days late so that 
     the Center can attempt to reach the homeowner.
       ``(dd) Required disclosures to the homeowner.--Each 
     homeowner shall be informed that being registered with a 
     State Homeownership Protection Center under this subclause 
     may provide easier access to assistance in case of financial 
     difficulty and that no information that would make it 
     possible to identify the homeowner will be given to any other 
     entity for any reason without the prior approval of the 
     homeowner.
       ``(ee) Additional responsibilities of mortgagees.--The 
     mortgagee shall note registration with the State 
     Homeownership Protection Center with the loan information of 
     the homeowner, however such information is stored, and shall 
     ensure that any entity which purchases the loan of the 
     homeowner is aware of where they are registered and the 
     requirement that the State Homeownership Protection Center be 
     notified if the homeowner is or becomes more than 60 days 
     late on any mortgage payment.
       ``(iii) Notice upon delinquency of homeowner.--

       ``(I) In general.--Except as provided in subparagraph (C)--

       ``(aa) if a homeowner becomes 30 or more days late on any 
     mortgage payment, the mortgagee shall provide notice in the 
     manner described in clause (iv) to any eligible homeowner who 
     fails to pay any amount within 30 days of the date the amount 
     is due under a home loan;
       ``(bb) if a homeowner becomes 60 or more days late on any 
     mortgage payment, the mortgagee shall provide notice to the 
     homeowner a second time in the manner described in clause 
     (iv) to any eligible homeowner who fails to pay any amount 
     within 60 days of the date the amount is due under a home 
     loan; and
       ``(cc) if a homeowner becomes 60 or more days late on any 
     mortgage payment, and such homeowner is registered with a 
     State Homeownership Protection Center, the mortgagee shall 
     provide notice to that State Homeownership Protection Center.

[[Page S6067]]

       ``(II) Failure to provide notice.--Failure to provide 
     notice to a homeowner or to a State Homeownership Protection 
     Center required under this subsection constitutes a defense 
     to foreclosure.

       ``(iv) Content of notice upon delinquency of homeowner.--

       ``(I) Registered homeowners.--The notice required under 
     clause (iii) for a homeowner registered with a State 
     Homeownership Protection Center shall--

       ``(aa) notify the homeowner of the availability of any 
     homeownership counseling provided by the mortgagee;
       ``(bb) provide the homeowner a current copy of the 
     statement described in clause (ii)(I) provided to the 
     homeowner at closing; and
       ``(cc) when the homeowner becomes 60 or more days late on 
     any mortgage payment--

       ``(AA) notify the State Homeownership Protection Center 
     with whom the homeowner is registered; and
       ``(BB) provide the Center with the contact information of 
     the homeowner.
       ``(II) Non-registered homeowners.--The notice required 
     under clause (iii) for a homeowner not registered with a 
     State Homeownership Protection Center shall--

       ``(aa) notify the homeowner of the availability of any 
     homeownership counseling provided by the mortgagee; and
       ``(bb) provide the homeowner a current copy of the 
     statement described in clause (ii)(I) provided to the 
     homeowner at closing.

       ``(III) Mailings.--When the notice required under clause 
     (iii) is sent, the outside of the mailing envelope shall 
     state that such mailing contains federally required 
     information on Federal Government-approved financial 
     counseling agencies.'';

       (ii) by striking subparagraph (B) and inserting a new 
     subparagraph (B) as follows:
       ``(B) Deadline for notification.--The notification required 
     in subparagraph (A) shall be made in a manner approved by the 
     Secretary.'';
       (iii) in subparagraph (D)(i)(I), by inserting ``post-
     purchase'' before ``homeownership counseling''; and
       (iv) by adding at the end the following:
       ``(F) Nationwide availability.--The Secretary shall ensure 
     that each State is served by at least one local, regional, or 
     national agency with an office in the State that provides the 
     services described in this paragraph.'';
       (D) in paragraph (6)(D), by inserting ``for a primary 
     residence'' before the period;
       (2) by striking subsection (d) and inserting the following:
       ``(d) Grants to States for State Homeownership Protection 
     Centers.--
       ``(1) In general.--The Secretary shall award grants, on a 
     competitive basis, to State housing finance agencies or any 
     other designated State agency, to enable such agencies to 
     establish and operate State Homeownership Protection Centers.
       ``(2) Notification of funding availability.--The Secretary 
     shall release a Notification of Funding Availability for 
     grants awarded under this subsection for a fiscal year not 
     later than 3 months after the date of enactment of the 
     appropriate Act making appropriations for the Department of 
     Housing and Urban Development for the fiscal year.
       ``(3) Application.--
       ``(A) Submission to the secretary.--To be eligible to 
     receive a grant under this subsection, a State housing 
     finance agency or any other designated State agency shall 
     submit an application to the Secretary, at such time and in 
     such manner as the Secretary may require, and containing such 
     information as the Secretary determines necessary--
       ``(i) to determine the ability of such agency to operate a 
     Center; and
       ``(ii) to establish priorities for funding based on need.
       ``(B) Announcement of awards.--The Secretary shall 
     announce, within 4 months after the last date for the 
     submission of applications described in subparagraph (A) for 
     a fiscal year, the grants conditionally awarded under this 
     subsection for that fiscal year.
       ``(4) Purpose.--The purpose of any State Homeownership 
     Protection Center established under paragraph (1) shall be--
       ``(A) to provide a centralized location for information on, 
     and referral to, public services available to assist a 
     homeowner who is in default on their home loan;
       ``(B) to provide a homeowner with referrals to counseling 
     agencies approved by the Department of Housing and Urban 
     Development that may be able to assist that homeowner, if 
     that homeowner is in default on their home loan; and
       ``(C) to attempt to contact each homeowner who is 
     registered with the Center who is more than 60 days late on 
     any mortgage payment with the goal of--
       ``(i) determining--

       ``(I) if such homeowner needs assistance in avoiding 
     foreclosure on their home; and
       ``(II) what kind of assistance is needed by such homeowner 
     to avoid foreclosure on their home; and

       ``(ii) providing referrals to any appropriate programs or 
     entities that may be able to provide any such assistance.
       ``(5) Homeownership protection centers.--
       ``(A) Use of funds.--Each State housing finance agency or 
     any other designated State agency, who is a recipient of a 
     grant under paragraph (1) may only use such grant amounts to 
     establish and operate State Homeownership Protection Centers 
     in that State.
       ``(B) Required activities.--Each State Homeownership 
     Protection Center established under this section shall, at a 
     minimum--
       ``(i) provide a toll-free number through which any 
     homeowner in financial distress can receive--

       ``(I) information on--

       ``(aa) the Center and its services; and
       ``(bb) public programs that provide assistance to 
     homeowners; and

       ``(II) a listing of counseling agencies approved by the 
     Department of Housing and Urban Development;

       ``(ii) provide information to homeowners on available 
     community resources relating to homeownership, including--

       ``(I) public assistance or benefits programs;
       ``(II) mortgage assistance programs;
       ``(III) home repair assistance programs;
       ``(IV) legal assistance programs;
       ``(V) utility assistance programs;
       ``(VI) food assistance programs; and
       ``(VII) other Federal, State, or local government funded 
     social service;

       ``(iii) provide staff who--

       ``(I) are able to conduct a brief assessment of the 
     situation of a homeowner; and
       ``(II) based on such assessment can--

       ``(aa) make appropriate referrals to, and provide 
     application information regarding, programs that can provide 
     assistance to such homeowner; and
       ``(bb) provide a listing of counseling agencies approved by 
     the Department of Housing and Urban Development; and
       ``(iv) provide to any homeowner in financial distress 
     access to applications for public assistance or benefits 
     program which may be of assistance to such homeowner.
       ``(C) Additional activities.--In addition to the services 
     required under subparagraph (B), each State Homeownership 
     Protection Center shall--
       ``(i) be technologically capable of--

       ``(I) accepting and recording in a secure database the 
     contact information of any homeowner forwarded to the Center 
     by a mortgagee pursuant to subsection (c)(5)(A)(ii)(III); and
       ``(II) accessing the contact information described in 
     subclause (I), if the Center is notified by a mortgagee 
     pursuant to subsection (c)(5)(A)(ii)(III) that the homeowner 
     is 60 or more days late in paying any amount due under the 
     home loan of such homeowner;

       ``(ii) if notified by a mortgagee pursuant to subsection 
     (c)(5)(A)(ii)(III) that a homeowner who is registered with 
     the Center is 60 or more days late in paying any amount due 
     under the home loan of such homeowner, attempt to contact 
     such homeowner to provide assistance or suggest public 
     programs or counseling agencies that may provide assistance 
     to the homeowner; and
       ``(iii) not release to the public or to any third party the 
     name of any homeowner who is registered with the Center, or 
     of any person who visits the Center for assistance, or any 
     other information that would make it possible to identify 
     such a person, without the prior written consent of such 
     homeowner or person.
       ``(6) Grants to states with homeownership protection 
     centers to assist homeowners in default.--
       ``(A) Grant authority.--The Secretary shall award 
     competitive grants to State housing finance agencies, or to 
     any other designated State agency, located in a State with a 
     State Homeownership Protection Center established under 
     paragraph (1), to enable such agencies in partnership with 
     State Homeownership Protection Centers to provide 1-time 
     emergency grants or subsidized loans to eligible homeowners 
     to assist such homeowners in satisfying any amounts past due 
     on their home loans.
       ``(B) Notification of funding availability.--The Secretary 
     shall release a Notification of Funding Availability for 
     grants awarded under this paragraph for a fiscal year not 
     later than 3 months after the date of enactment of the 
     appropriate Act making appropriations for the Department of 
     Housing and Urban Development for the fiscal year.
       ``(C) Application.--
       ``(i) Submission to the secretary.--To be eligible to 
     receive a grant under this paragraph a State housing finance 
     agency or any other designated State agency located in a 
     State where a State Homeownership Protection Center is 
     located, shall submit an application to the Secretary at such 
     time and in such manner as the Secretary may require, and 
     containing such information as the Secretary determines 
     necessary--

       ``(I) to determine compliance with the requirements and 
     criteria under this paragraph; and
       ``(II) to establish priorities for funding based on need.

       ``(ii) Announcement of awards.--The Secretary shall 
     announce, within 4 months after the last date for the 
     submission of applications described in this paragraph for a 
     fiscal year, the grants conditionally awarded under this 
     paragraph for that fiscal year.
       ``(D) Other requirements.--
       ``(i) Separate accounts.--To be eligible to receive any 
     amounts awarded under this paragraph and prior to providing 
     any emergency grants or subsidized loans, a State housing 
     finance agency or any other designated State agency shall 
     establish a separate account in which such amounts are to be 
     held.
       ``(ii) Limited use.--Any amounts made available for 
     purposes of this paragraph in

[[Page S6068]]

     any appropriations Act shall be used only to provide 1-time 
     emergency grants or subsidized loans to eligible homeowners 
     to assist such homeowners in satisfying any amounts past due 
     on their home loan as authorized under subparagraph (A).
       ``(iii) Repayment of loans.--Any amounts repaid on a 
     subsidized loan made under this paragraph shall be deposited 
     back into the separate account established under clause (i) 
     from which the loan funds originated.
       ``(iv) Other funding.--Amounts donated or otherwise 
     directed to be used for purposes of this paragraph may be 
     deposited in any separate account established under clause 
     (i) to help capitalize such account.
       ``(E) Program requirements.--
       ``(i) In general.--Each State housing finance agency or any 
     other designated State agency that is a recipient of a grant 
     to assist homeowners in default under this paragraph, in 
     cooperation with the State Homeownership Protection Centers 
     in such State, shall develop program requirements for 
     eligible homeowners seeking a 1-time emergency grant or 
     subsidized loan under this paragraph.
       ``(ii) Required content.--The program requirements 
     developed under clause (i) shall, at a minimum, include the 
     following:

       ``(I) That any loan or grant under this paragraph may be 
     provided for up to a four-family owner-occupied residence, 
     including one-family units in a condominium project or a 
     membership interest and occupancy agreement in a cooperative 
     housing project, that is used as the principal residence of 
     the applicant seeking such grant or loan.
       ``(II) That each applicant for a loan or grant shall be a 
     permanent resident of the State in which the principal 
     residence of such applicant is located.
       ``(III) That each applicant--

       ``(aa) provide documentation that such applicant either--

       ``(AA) is suffering from financial hardship which is 
     unexpected or due to circumstances beyond the control of the 
     applicant; or
       ``(BB) is eligible for homeownership counseling under 
     subsection (c)(4); and

       ``(bb) offer proof that such applicant is unable, without 
     financial assistance--

       ``(AA) to correct any delinquency on any amounts past due 
     on the home loan of such applicant within a reasonable time; 
     and
       ``(BB) to make full payment on any home loan payment due 
     within the next 30 days.
       ``(IV) That a State Homeownership Protection Center, State 
     housing finance agency, or any other designated State agency, 
     or its designee, has determined, in its discretion, that 
     there is a reasonable prospect that any applicant for a grant 
     or loan under this paragraph will be able to resume full 
     payments on the home loan of such applicant not later than 12 
     months after the date on which such applicant will first 
     receive any grant or loan amounts under this paragraph.
       ``(V) That the applicant has not, at any point prior, and 
     with respect to the same real property, previously received a 
     grant or loan under this paragraph.

       ``(F) Loan requirements.--
       ``(i) Rate of interest.--Any loan under this section shall 
     carry a simple annual percentage rate of interest which shall 
     not exceed the prime rate of interest, as such prime rate is 
     determined from time to time by at least 75 percent of the 30 
     largest depository institutions in the Nation.
       ``(ii) No compounding.--Interest on the outstanding 
     principal balance of any loan under this section shall not 
     compound.
       ``(iii) Balance due.--

       ``(I) In general.--The principal of any loan made under 
     this paragraph, including any interest accrued on such 
     principal, shall not be due and payable unless--

       ``(aa) the real property securing such loan is sold or 
     transferred; or
       ``(bb) the last surviving homeowner of such real property 
     dies.

       ``(II) Deposit of balance due.--If either event described 
     in subclause (I) occurs, the principal of any loan made under 
     this paragraph, including any interest accrued on such 
     principal, shall immediately become due and payable to the 
     State entity from which the loan originated.

       ``(iv) No penalty for prepayment.--Any homeowner who 
     receives a loan under this paragraph may repay the loan in 
     full, without penalty, by lump sum or by installment 
     payments, at any time prior to the loan becoming due and 
     payable.
       ``(v) Cap on loan amount.--The amount of any loan to any 1 
     homeowner under this section shall not exceed 20 percent of 
     the original mortgage amount borrowed by the homeowner.
       ``(vi) Subordination permitted.--Any loan made under this 
     paragraph will be subordinated to any refinancing of the 
     first mortgage, any preexisting subordinate financing, any 
     purchase money mortgage, or subordinated for any other 
     reason, as determined by the State.
       ``(G) Existing loan funds.--Any State or State housing 
     finance agency with a previously existing fund established to 
     make loans to assist homeowners in satisfying any amounts 
     past due on their home loan may use funds appropriated for 
     purposes of this section for that existing loan fund, even if 
     the eligibility, application, program, or use requirements 
     for that loan program differ from the eligibility, 
     application, program, and use requirements of this paragraph, 
     unless such use is expressly determined by the Secretary to 
     be inappropriate.'';
       (3) in subsection (f)(2)(A), by striking ``and rental 
     counselors.'' and inserting ``counselors in both pre-purchase 
     and post-purchase counseling and in training rental 
     counselors.''; and
       (4) by adding at the end the following:
       ``(g) Duty To Engage in Loss Mitigation.--
       ``(1) In general.--Upon default of any federally related 
     mortgage, as defined in section 3(1)(B) of the Real Estate 
     Settlement Procedures Act of 1974 (12 U.S.C. 2202(1)(B)), a 
     mortgagee shall engage in reasonable loss mitigation 
     activities for the purpose of providing an alternative to 
     foreclosure.
       ``(2) Defense to foreclosure.--A mortgagee's failure to 
     comply with the requirements of paragraph (1) constitutes a 
     defense to the foreclosure.
       ``(3) No foreclosure if notice of application for home 
     preservation loan.--A mortgagee shall not initiate or 
     continue a foreclosure--
       ``(A) upon receipt of a written confirmation that the 
     homeowner has applied for a home preservation loan under 
     subsection (d)(6); and
       ``(B) for the period of 1 month after receipt of such 
     written confirmation or until the mortgagee is informed, in 
     writing, that the homeowner is not eligible for a home 
     preservation loan, whichever occurs first.
       ``(4) Definition of loss mitigation activities.--
       ``(A) In general.--As used in this subsection, the term 
     `loss mitigation activities' means activities that minimize 
     the potential losses to a homeowner or investor that may 
     result from--
       ``(i) a homeowner's inability to pay the mortgage payments 
     due on a home loan; and
       ``(ii) any subsequent foreclosure action.
       ``(B) Alternative to foreclosure.--Loss mitigation 
     activities provide alternatives to foreclosure whenever 
     possible and reasonably ensure the long-term affordability of 
     any mortgage retained pursuant to such activities.
       ``(C) Process of mitigation.--
       ``(i) In general.--Loss mitigation activities involve 
     reasonably analyzing the borrower's financial situation, 
     evaluating the property value of the property to be 
     mortgaged, and assessing the feasibility of measures 
     including--

       ``(I) waiver of any late payment charge or, if applicable, 
     penalty interest;
       ``(II) forbearance pursuant to a written agreement between 
     the borrower and the servicer providing for a temporary 
     reduction in monthly payments followed by a reamortization 
     and new repayment schedule including the arrearage;
       ``(III) waiver, modification, or variation of any term of a 
     mortgage, including modifications that change the mortgage 
     rate, forgive the payment of principal or interest, extend 
     the final maturity date of such mortgage, or begin to include 
     an escrow for taxes and insurance;
       ``(IV) acceptance of payment from the homeowner of an 
     amount less than the stated principal balance in final 
     satisfaction of such mortgage;
       ``(V) assumption;
       ``(VI) pre-foreclosure sale; and
       ``(VII) deed in lieu of foreclosure.

       ``(ii) Priority.--Activities described in subclauses (V), 
     (VI), and (VII) shall only be pursued after a reasonable 
     evaluation of the feasibility of activities described in 
     subclause (I), (II), (III), and (IV), based upon the 
     homeowner's circumstances.
       ``(h) Oversight of Public and Private Efforts To Reduce 
     Mortgage Defaults and Foreclosures.--
       ``(1) Monitoring of home loans.--The Secretary, in 
     consultation with the Department of Housing and Urban 
     Development, the Office of the Comptroller of the Currency, 
     the Board of Governors of the Federal Reserve System, the 
     Federal Deposit Insurance Corporation, the National Credit 
     Union Administration, and the Office of Thrift Supervision, 
     shall develop and implement a plan to monitor--
       ``(A) conditions and trends in the mortgage industry in 
     order to predict, as best as possible, likely future trends 
     in foreclosures; and
       ``(B) the effectiveness of public efforts to reduce 
     mortgage defaults and foreclosures.
       ``(2) Annual report to congress on monitoring of home 
     loans.--Not later than 1 year after the development of the 
     plan under paragraph (1), and every year thereafter, the 
     Secretary shall submit a report to Congress that--
       ``(A) summarizes and describes the findings of the 
     monitoring required under that subparagraph; and
       ``(B) includes recommendations or proposals for legislative 
     or administrative action--
       ``(i) to increase the authority of the Secretary to levy 
     penalties against any mortgagee, or other person or entity, 
     who fails to comply with the requirements described in this 
     section; and
       ``(ii) to improve coordination between various public and 
     private initiatives to reduce the overall rate of mortgage 
     defaults and foreclosures.
       ``(3) Compliance plan and report.--The Secretary, in 
     consultation with the Department of Housing and Urban 
     Development, the Office of the Comptroller of the Currency, 
     the Board of Governors of the Federal Reserve System, the 
     Federal Deposit Insurance Corporation, the National Credit 
     Union Administration, and the Office of Thrift Supervision, 
     shall--
       ``(A) develop a plan to monitor the compliance with the 
     requirements established in

[[Page S6069]]

     this section by mortgagees and other persons or entities; and
       ``(B) report such plan to Congress.
       ``(4) Development of a national database on defaults and 
     foreclosures.--
       ``(A) In general.--The Secretary, in consultation with the 
     Department of Housing and Urban Development, the Office of 
     the Comptroller of the Currency, the Board of Governors of 
     the Federal Reserve System, the Federal Deposit Insurance 
     Corporation, the National Credit Union Administration, and 
     the Office of Thrift Supervision, shall develop 
     recommendations for a national database on mortgage defaults 
     and foreclosures.
       ``(B) Goals of national database.--In developing the 
     recommendations under subparagraph (A), the Secretary shall 
     consider the goals of such a national database, which are as 
     follows:
       ``(i) To provide Federal regulatory agencies with 
     information on--

       ``(I) mortgagees that generate home loans which go into 
     default or foreclosure at a rate significantly higher than 
     the national average for such mortgagees; and
       ``(II) the various factors associated with those higher 
     rates.

       ``(ii) To provide information to the Federal Government on 
     loans, defaults, foreclosures, and sheriff sales--

       ``(I) which is not otherwise readily available;
       ``(II) which would allow for a better understanding of 
     local, regional, and national trends in delinquencies, 
     defaults, and foreclosures; and
       ``(III) so that public policies to reduce defaults and 
     foreclosures may be improved.

       ``(C) Report on outcomes of home loans.--
       ``(i) In general.--In order to satisfy the requirement set 
     forth in this paragraph and paragraph (1), the Secretary 
     shall promulgate rules within 18 months of the date of 
     enactment of the Homeownership Protection and Enhancement Act 
     of 2007 requiring each lender who has originated 100 or more 
     loans in the previous calendar year on behalf of itself or 
     another person or entity, or each person or entity that has 
     serviced 100 or more loans in the previous calendar year on 
     behalf of itself or another entity, to report to the 
     Secretary, on an annual basis, whatever data the Secretary, 
     in consultation with the Department of Housing and Urban 
     Development, the Office of the Comptroller of the Currency, 
     the Board of Governors of the Federal Reserve System, the 
     Federal Deposit Insurance Corporation, the National Credit 
     Union Administration, and the Office of Thrift Supervision, 
     deems sufficient to meet the requirements set forth in 
     subparagraph (B).
       ``(ii) Content of report.--At a minimum, each report 
     required under clause (i) shall include data--

       ``(I) using the same identification requirements for each 
     loan for which information is submitted as are established 
     under the Home Mortgage Disclosure Act (12 U.S.C. 2801 et 
     seq.) for data reporting, namely--

       ``(aa) year of origination;
       ``(bb) agency code of originator;
       ``(cc) respondent identification number of originator; and
       ``(dd) the identifying number for the loan;

       ``(II) regarding the characteristics of each home loan 
     originated in the preceding 12 months by the lender, person, 
     or entity, including--

       ``(aa) loan-to-value ratio at the time of origination for 
     each mortgage on the property;
       ``(bb) whether or not there is an escrow account for taxes 
     and insurance;
       ``(cc) the type of mortgage, such as a fixed-rate or 
     adjustable-rate mortgage; and
       ``(dd) any other loan or loan underwriting characteristics 
     determined by the Secretary, and the regulators with whom the 
     Secretary consults under the terms of subparagraph (C)(i), to 
     be necessary in order to meet the requirements of 
     subparagraph (B) and that are not already available to the 
     Secretary through a national mortgage database;

       ``(III) regarding the performance outcomes of each home 
     loan originated in the preceding 12 months by the lender, 
     person, or entity, including--

       ``(aa) if such home loan was in delinquency at any point in 
     such 12-month period; and
       ``(bb) if any foreclosure proceeding was initiated on such 
     home loan during such 12-month period;

       ``(IV) sufficient to establish for each home loan that at 
     any point during the preceding 12 months had become 60 or 
     more days delinquent with respect to a payment on any amount 
     due under the home loan, or for which a foreclosure 
     proceeding was initiated, the interest rate on such home loan 
     at the time of such delinquency or foreclosure;
       ``(V) regarding foreclosures, including--

       ``(aa) the date of all foreclosures initiated by the 
     lender, person, or entity; and
       ``(bb) the combined loan-to-value ratio of all mortgages on 
     a home at the time foreclosure proceedings were initiated; 
     and

       ``(VI) indicating each home loan for which a foreclosure 
     proceeding was completed in the preceding 12 months, 
     including--

       ``(aa) foreclosure proceedings initiated in such 12-month 
     period; and
       ``(bb) the date of the foreclosure completion.
       ``(D) Requirement of federal financial institutions 
     examination council to create a consolidated database.--The 
     Federal Financial Institutions Examination Council shall 
     create a consolidated database that establishes a connection 
     between the data provided under the Home Mortgage Disclosure 
     Act (12 U.S.C. 2801 et seq.) and the data provided under this 
     subsection.
       ``(E) Report to congress on national database.--Not later 
     than 12 months after the date of enactment of the 
     Homeownership Protection and Enhancement Act of 2007, the 
     Secretary shall report to Congress the recommendations 
     required under subparagraph (A).
       ``(i) Rule of Construction Regarding Mortgagees.--As used 
     in this section--
       ``(1) the term `mortgagee'--
       ``(A) means the original lender under a mortgage; and
       ``(B) includes--
       ``(i) any servicers, affiliates, agents, subsidiaries, 
     successors, or assignees of such lender; and
       ``(ii) any subsequent purchaser, trustee, or transferee of 
     any mortgage or credit instrument issued by such lender; and
       ``(2) the term `servicer' means any person who collects on 
     a home loan, whether they are the owner, the holder, the 
     assignee, the nominee for the loan, or the beneficiary of a 
     trust, or any person acting on behalf of such person.
       ``(j) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section--
       ``(1) $615,000,000 for fiscal year 2008, of which--
       ``(A) $300,000,000 shall be for grants to counseling 
     organizations under subsection (c);
       ``(B) $260,000,000 shall be for competitive grants to 
     States to establish revolving loan funds under subsection 
     (d)(6);
       ``(C) $50,000,000 shall be for grants to establish and 
     operate State Homeownership Protection Centers under 
     subsection (d)(1); and
       ``(D) $5,000,000 shall be to create the Federal database 
     under subsection (h)(4);
       ``(2) $635,000,000 for fiscal year 2009; and
       ``(3) such sums as necessary for each of fiscal years 2010 
     through 2012.''.
                                 ______