[House Report 114-356]
[From the U.S. Government Publishing Office]
114th Congress } HOUSE OF REPRESENTATIVES { Report
1st Session } { 114-356
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SERVICEMEMBER FORECLOSURE PROTECTIONS EXTENSION ACT OF 2015
_______
December 1, 2015.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Miller of Florida, from the Committee on Veterans' Affairs,
submitted the following
R E P O R T
[To accompany H.R. 189]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs, to whom was referred
the bill (H.R. 189) to extend foreclosure and eviction
protections for servicemembers, and for other purposes, having
considered the same, report favorably thereon without amendment
and recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Hearings......................................................... 3
Subcommittee Consideration....................................... 3
Committee Consideration.......................................... 3
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 3
Statement of General Performance Goals and Objectives............ 3
New Budget Authority, Entitlement Authority, and Tax Expenditures 4
Earmarks and Tax and Tariff Benefits............................. 4
Committee Cost Estimate.......................................... 4
Congressional Budget Office Estimate............................. 4
Federal Mandates Statement....................................... 6
Advisory Committee Statement..................................... 6
Constitutional Authority Statement............................... 6
Applicability to Legislative Branch.............................. 6
Statement on Duplication of Federal Programs..................... 6
Disclosure of Directed Rulemaking................................ 6
Section-by-Section Analysis of the Legislation................... 6
Changes in Existing Law Made by the Bill as Reported............. 7
Purpose and Summary
H.R. 189, the ``Servicemember Foreclosure Protections
Extension Act of 2015,'' was ordered to be favorably reported
to the full House on February 12, 2015, by voice vote. H.R. 189
was introduced on January 7, 2015, by Representative Alan
Grayson of Florida. H.R. 189 would extend through December 31,
2016, the one-year period after a servicemember's military
service that the servicemember is protected from any sale,
foreclosure, or seizure of their property without a court order
or waiver agreement signed by the servicemember.
Background and Need for Legislation
The Servicemembers Civil Relief Act (SCRA) provides
financial services protections such as interest rate relief and
foreclosure protection for military personnel serving on active
duty.
Current law protects against foreclosure and eviction for
military personnel for one-year post-active military service to
allow servicemembers and military families sufficient time to
get on their feet, and to avoid the stress of potentially
losing their home as the servicemember transitions from active
duty to civilian life. Some servicemembers, particularly those
leaving active-duty and re-acclimating to civilian life,
continue to face financial challenges that are likely to
continue for the foreseeable future.
Providing protections to servicemembers dates back to the
enactment of the Soldiers' and Sailors' Civil Relief Act of
1918 and the Soldiers' and Sailors' Civil Relief Act of 1940
(SSCRA). In 2003, the SCRA was enacted to ``restate, clarify,
and revise [the SSCRA].''\1\
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\1\ H.Rpt. 108-81, to accompany H.R. 100, Servicemembers Civil
Relief Act, April 30, 2003.
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The SCRA provides for a stay of proceedings that seek to
enforce an obligation on real or personal property owned by the
servicemember prior to such military service, and protection
against sale, foreclosure, or seizure of such property for a
period of one year following a servicemember's period of
military service.\2\ Thus, if a servicemember is unable to make
payments on the loan due to military service, the provision
prevents the vendor from exercising any right or option under
the contract to rescind or terminate, to resume possession of
the property for nonpayment of any installment due, or to
breach the terms, except by action in a court of competent
jurisdiction, until one year after the term of active duty
terminates.
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\2\ 50 U.S.C. App. 533.
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Initially, the period of protection afforded servicemembers
facing foreclosure was 90 days. The protection was extended to
9 months\3\ and then one year.\4\ The authority to provide
protection for one year has been of limited duration, and has
been extended a number of times, most recently at the end of
the 113th Congress.\5\
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\3\ P.L. 110-289.
\4\ P.L. 112-154.
\5\ P.L. 113-286 extended these authorities to the end of 2015.
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The current one-year protection from foreclosure will
expire at the end of 2015 and revert back to the 90 day
protection under the SCRA. H.R. 189 would amend P.L. 112-154,
126 Stat. 1208 to extend the one-year protection for an
additional year (December 31, 2016, and January 1, 2017).
Hearings
On February 27, 2015, the full House Committee on Veterans'
Affairs conducted a legislative hearing on various bills
introduced during the first month of the 114th Congress,
including H.R. 189. The following witnesses testified:
The Honorable Alan Grayson, U.S. House of
Representatives, 9th District, Florida; Mr. David R.
McLenachen, Acting Deputy Under Secretary for
Disability Assistance, Veterans Benefits
Administration, U.S. Department of Veterans Affairs,
accompanied by Dr. Rajiv Jain, Assistant Deputy Under
Secretary for Health for Patient Services, Veterans
Health Administration, U.S. Department of Veterans
Affairs, Ms. Susan Sullivan, Deputy Assistant Secretary
for Policy, Office of Policy and Planning, U.S.
Department of Veterans Affairs, and Ms. Kim McLeod,
Counsel, Office of General Counsel, U.S. Department of
Veterans Affairs; Mr. Joseph A. Violante, National
Legislative Director, Disabled American Veterans; Mr.
Aleks Morosky, Deputy Director, National Legislative
Service, Veterans of Foreign Wars of the United States;
and Mr. Blake Ortner, Deputy Government Relations
Director, Paralyzed Veterans of America.
Statements for the record were submitted by the following:
The House Policy Council, Financial Services
Roundtable.
Subcommittee Consideration
There was no subcommittee consideration of H.R. 189.
Committee Consideration
On February 12, 2015, the full Committee met in an open
markup session, a quorum being present, ordered H.R. 189, to be
reported favorably to the House of Representatives, by voice
vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report the legislation and amendments thereto.
There were no recorded votes taken on amendments or in
connection with ordering H.R. 189, reported to the House. A
motion by Ranking Member Corrine Brown of Florida to report
H.R. 189, favorably to the House of Representatives was agreed
to by voice vote.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are to protect servicemembers and their
families from foreclosing on their homes within one year
following active duty service.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Earmarks and Tax and Tariff Benefits
H.R. 189 does not contain any Congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI of the Rules of the House of
Representatives.
Committee Cost Estimate
The Committee adopts as its own the cost estimate on H.R.
189, prepared by the Director of the Congressional Budget
Office pursuant to section 402 of the Congressional Budget Act
of 1974.
Congressional Budget Office Cost Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
for H.R. 189, provided by the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 25, 2015.
Hon. Jeff Miller,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 189, the
Servicemember Foreclosure Protections Extension Act of 2015.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is David Newman.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
H.R. 189--Servicemember Foreclosure Protections Extension Act of 2015
H.R. 189 would enhance certain protections for veterans
with home mortgages. CBO estimates that any change in direct
spending under the bill would be insignificant.
Under current law, veterans may receive a judicial stay of
foreclosure proceedings on loans that were originated before
they entered the military. Those veterans are currently
eligible to obtain a stay during the one-year period after they
leave military service; however, that period of eligibility
will be shortened to nine months beginning on January 1, 2016.
H.R. 189 would retain the one-year period of eligibility
through December 31, 2016. (The duration of the stay of
proceedings itself is determined by the courts.)
Some of the loans that would be affected by that
foreclosure protection are guaranteed by the Department of
Veterans Affairs (VA) or the Federal Housing Administration
(FHA). Under its home loan program, VA pays lenders up to 25
percent of the outstanding loan debt in the event that the
borrower defaults. Unpaid interest can be added to the
guaranteed debt, within certain limits. FHA provides a similar
guarantee on mortgages it insures, compensating lenders for up
to 100 percent of the loss.
Delaying foreclosure on borrowers who default would
lengthen the period during which unpaid interest would accrue,
increasing the indebtedness of the borrower. If the loan is
eventually terminated, the claim filed by the lender would be
larger by the amount of the additional interest, and the
subsequent claim payment from VA or FHA would rise as a result.
Those larger claim payments would raise the costs of both
agencies.
Loans that could be affected by the bill would be those
that were originated prior to enactment of H.R. 189. Changes to
the cost of extant mortgages would be treated as loan
modifications and the increased costs would be recorded as
direct spending when the modifications became effective--that
is, at the start of calendar year 2016, when the eligibility
period for the benefit would be shortened under current law.
CBO expects that only a small number of veterans would have
loans guaranteed by VA or FHA and would obtain a stay of
foreclosure in 2016 as a result of the three additional months
of eligibility that H.R. 189 would provide. The bill would
apply only to mortgages that were entered into before joining
the military. Most veterans enter the military between the ages
of 18 and 22, a stage in life when few people have mortgages.
Thus, CBO believes it is highly unlikely that such veterans
would be responsible for federally guaranteed loans before they
entered military service.
Furthermore, CBO estimates that the average additional
indebtedness per borrower as a result of the forbearance is
small--about $3,000. Therefore, any increase in direct spending
would be insignificant. Because enacting H.R. 189 would affect
direct spending, pay-as-you-go procedures apply. Enacting H.R.
189 would not affect revenues.
By extending through December 31, 2016, the one-year period
of eligibility for veterans to receive a judicial stay of
foreclosure proceedings, the bill would impose
intergovernmental and private-sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA). The cost of the mandates
would be any loss of income by public and private entities,
such as mortgage lenders, that could otherwise enforce an
obligation, sale, foreclosure or seizure of the property
without the extension. CBO expects the number of veterans who
face foreclosure within one year of separation to be small. CBO
further expects that few additional mortgage lenders would be
affected by the extension and that the size of their claims
would be small. Consequently, CBO estimates that the costs of
the mandates would fall below the annual thresholds established
in UMRA for intergovernmental and private-sector mandates.
(Adjusted for inflation, those thresholds are $77 million and
$154 million in 2015, respectively.)
The CBO staff contacts for this estimate are David Newman
(for federal costs), Jon Sperl (for state and local effects),
and Paige Piper/Bach (for private-sector effects). This
estimate was approved by Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates regarding H.R. 189 prepared by the Director of the
Congressional Budget Office pursuant to section 423 of the
Unfunded Mandates Reform Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act would be created by H.R.
189.
Statement of Constitutional Authority
Pursuant to Article I, section 8 of the United States
Constitution, the reported bill is authorized by Congress'
power to ``provide for the common Defense and general Welfare
of the United States.''
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Statement on Duplication of Federal Programs
Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015),
the Committee finds that no provision of H.R. 189 establishes
or reauthorizes a program of the Federal Government known to be
duplicative of another Federal program, a program that was
included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most
recent Catalog of Federal Domestic Assistance.
Disclosure of Directed Rulemaking
Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015),
the Committee estimates that H.R. 189 does not require directed
rule making.
Section-by-Section Analysis of the Legislation
Section 1--Short title
Section 1 would establish the short title of H.R. 189 as
the ``Servicemember Foreclosure Protections Extension Act of
2015.''
Section 2--Temporary extension of extended period of protections for
members of uniformed services relating to mortgages, mortgage
foreclosure, and eviction
Section 2 would extend current authorities provided in P.L.
112-154 to December 31, 2016 and January 1, 2017.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
HONORING AMERICA'S VETERANS AND CARING FOR CAMP LEJEUNE FAMILIES ACT OF
2012
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TITLE VII--OTHER MATTERS
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SEC. 710. EXTENDED PERIOD OF PROTECTIONS FOR MEMBERS OF UNIFORMED
SERVICES RELATING TO MORTGAGES, MORTGAGE
FORECLOSURE, AND EVICTION.
(a) Stay of Proceedings and Period of Adjustment of
Obligations Relating to Real or Personal Property.--Section
303(b) of the Servicemembers Civil Relief Act (50 U.S.C. App.
533(b)) is amended by striking ``within 9 months'' and
inserting ``within one year''.
(b) Period of Relief From Sale, Foreclosure, or Seizure.--
Section 303(c) of such Act (50 U.S.C. App. 533(c)) is amended
by striking ``within 9 months'' and inserting ``within one
year''.
(c) Effective Date.--The amendments made by subsections (a)
and (b) shall take effect on the date that is 180 days after
the date of the enactment of this Act.
(d) Extension of Sunset.--
(1) In general.--The amendments made by subsections
(a) and (b) shall expire on [December 31, 2015]
December 31, 2016.
(2) Conforming amendment.--Subsection (c) of section
2203 of the Housing and Economic Recovery Act of 2008
(Public Law 110-289; 50 U.S.C. App. 533 note) is
amended to read as follows:
``(c) Effective Date.--The amendments made by subsection (a)
shall take effect on the date of the enactment of this Act.''.
(3) Revival.--Effective [January 1, 2016] January 1,
2017, the provisions of subsections (b) and (c) of
section 303 of the Servicemembers Civil Relief Act (50
U.S.C. App. 533), as in effect on July 29, 2008, are
hereby revived.
(e) Report.--
(1) In general.--Not later than 540 days after the
date of the enactment of this Act, the Comptroller
General of the United States shall submit to Congress a
report on the protections provided under section 303 of
such Act (50 U.S.C. App 533) during the five-year
period ending on the date of the enactment of this Act.
(2) Elements.--The report required by paragraph (1)
shall include, for the period described in such
paragraph, the following:
(A) An assessment of the effects of such
section on the long-term financial well-being
of servicemembers and their families.
(B) The number of servicemembers who faced
foreclosure during a 90-day period, 270-day
period, or 365-day period beginning on the date
on which the servicemembers completed a period
of military service.
(C) The number of servicemembers who applied
for a stay or adjustment under subsection (b)
of such section.
(D) A description and assessment of the
effect of applying for a stay or adjustment
under such subsection on the financial well-
being of the servicemembers who applied for
such a stay or adjustment.
(E) An assessment of the Secretary of
Defense's partnerships with public and private
sector entities and recommendations on how the
Secretary should modify such partnerships to
improve financial education and counseling for
servicemembers in order to assist them in
achieving long-term financial stability.
(3) Period of military service and servicemember
defined.--In this subsection, the terms ``period of
military service'' and ``servicemember'' have the
meanings given such terms in section 101 of such Act
(50 U.S.C. App. 511).
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