[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6340 Introduced in House (IH)]

<DOC>






116th CONGRESS
  2d Session
                                H. R. 6340

To provide for mortgage forbearance during the COVID-19 emergency, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 23, 2020

   Mr. Clay introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
To provide for mortgage forbearance during the COVID-19 emergency, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. MORTGAGE FORBEARANCE.

    (a) Findings.--
            (1) Findings.--Congress finds that--
                    (A) the collection of debts involves the use of the 
                mails and wires and other instrumentalities of 
                interstate commerce;
                    (B) at times of major disaster or emergency, the 
                income of consumers is often impaired and their 
                necessary daily expenses often increase;
                    (C) temporary forbearance benefits not only 
                consumer and small business debtors, but also other 
                creditors by avoiding downward collateral price spirals 
                triggered by an increase in foreclosure activity;
                    (D) without forbearance, many consumers and small 
                businesses are unlikely to be able to pay their 
                obligations according to their original terms and are 
                likely to default on obligations or file for 
                bankruptcy, resulting in reduced recoveries for 
                creditors, and in the case of bankruptcy, no recovery 
                of unaccrued interest;
                    (E) with forbearance, creditors are likely to 
                realize greater long-term value because consumers and 
                small businesses will be more likely to be able to 
                repay their obligations after the major disaster or 
                emergency has subsided;
                    (F) the legislative and administrative response to 
                major disasters and emergencies may consist of multiple 
                components divided among different statutes and 
                programs; and
                    (G) when evaluating whether property has been taken 
                from a person without just compensation, a holistic 
                evaluation of the burdens and benefits of all 
                legislative and administrative responses, including 
                indirect benefits from macroeconomic stabilization, is 
                appropriate.
            (2) Further findings regarding mortgage forbearance.--
        Congress further finds that--
                    (A) ensuring that consumers are able to remain in 
                their residences reduces the disruptions and economic 
                harm caused by such disasters and emergencies by 
                ensuring that consumers are able to continue their 
                existing employment, education, childcare, and 
                healthcare arrangements, which are often geographically 
                based;
                    (B) temporary forbearance on residential mortgages 
                is therefore critical to fostering economic recovery 
                and stability in the wake of major disasters or 
                emergencies;
                    (C) temporary mortgage forbearance during a 
                declared disaster benefits not only mortgagors, but 
                also mortgagees because mortgagors' ability to pay is 
                likely to be restored after a disaster or emergency 
                subsides, so forbearance may increase mortgagors' total 
                recovery. Without forbearance, mortgagors are likely to 
                default or file for bankruptcy, resulting in 
                significant losses for mortgagees; and
                    (D) temporary mortgage forbearance during a 
                declared disaster also benefits the mortgagees of other 
                properties because housing prices are geographically 
                and serially correlated so an increase in foreclosures 
                can drive down the value of collateral for all mortgage 
                lenders, further destabilizing the economy.
            (3) Further findings regarding mortgage servicers.--
        Congress further finds that--
                    (A) mortgage servicers are often contractually 
                obligated to advance scheduled mortgage payments to 
                securitization investors, irrespective of whether the 
                servicer collects the payment from the mortgagor;
                    (B) mortgage servicers are often thinly capitalized 
                and with limited capacity for engaging in large scale 
                advancing of payments to securitization investors;
                    (C) securitization investors have long been aware 
                of servicers' thin capitalization;
                    (D) in the wake of the 2008 financial crisis, 
                several servicers had difficulty obtaining sufficiently 
                liquidity to make advances;
                    (E) mortgage servicing is a heavily regulated 
                industry;
                    (F) in response to the 2008 financial crisis, 
                Congress created a safe harbor for mortgage servicers 
                that undertook loan modifications;
                    (G) in response to the 2008 financial crisis, the 
                Home Affordable Modification Program paid mortgage 
                servicers to undertake loan modifications;
                    (H) as part of the 2012 joint State-Federal 
                National Mortgage Settlement, mortgage servicers 
                committed to undertaking loan modifications; and
                    (I) investors in mortgage securitizations are or 
                should be aware of servicers' thin capitalization, 
                liquidity constraints, the extent and history of 
                servicing regulation and therefore do not have a 
                reasonable expectation that the terms of servicing 
                contracts will be enforceable at times of national 
                financial crisis.
            (4) Determination.--It is the sense of the Congress that, 
        on the basis of the findings described under paragraphs (1), 
        (2), and (3), the Congress determines that the provisions of 
        this Act are necessary and proper for the purpose of carrying 
        into execution the powers of the Congress to regulate commerce 
        among the several States and to establish uniform bankruptcy 
        laws.
    (b) Prohibition on Foreclosures and Repossessions During the COVID-
19 Emergency.--
            (1) Prohibition on foreclosures.--The Real Estate 
        Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.) is 
        amended--
                    (A) in section 3 (12 U.S.C. 2602)--
                            (i) in paragraph (8), by striking ``and'' 
                        at the end;
                            (ii) in paragraph (9), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following:
            ``(10) the term `COVID-19 emergency' means the period that 
        begins upon the date of the enactment of this Act and ends on 
        the date of the termination by the Federal Emergency Management 
        Agency of the emergency declared on March 13, 2020, by the 
        President under the Robert T. Stafford Disaster Relief and 
        Emergency Assistance Act (42 U.S.C. 4121 et seq.) relating to 
        the Coronavirus Disease 2019 (COVID-19) pandemic.''; and
                    (B) in section 6(k)(1) (12 U.S.C. 2605(k)(1))--
                            (i) in subparagraph (D), by striking ``or'' 
                        at the end;
                            (ii) by redesignating subparagraph (E) as 
                        subparagraph (G); and
                            (iii) by inserting after subparagraph (D) 
                        the following:
                    ``(E) commence or continue any judicial foreclosure 
                action or non-judicial foreclosure process or any 
                action to evict a consumer following a foreclosure 
                during the COVID-19 emergency or the 180-day period 
                following such emergency (except that such prohibition 
                shall not apply to a mortgage secured by a dwelling 
                that the servicer has determined after exercising 
                reasonable diligence is vacant or abandoned);
                    ``(F) fail to toll the time in a foreclosure 
                process on a property during the COVID-19 emergency or 
                the 180-day period following such emergency (except 
                that such prohibition shall not apply to a mortgage 
                secured by a dwelling that the servicer has determined 
                after exercising reasonable diligence is vacant or 
                abandoned); or''.
            (2) Repossession prohibition.--During the COVID-19 
        emergency and for the 180-day period following such emergency, 
        a servicer of a consumer loan secured by a manufactured home or 
        a motor vehicle may not repossess such home or vehicle.
    (c) Forbearance of Residential Mortgage Loan Payments for Single 
Family Properties (1-4 Units).--Section 6 of the Real Estate Settlement 
Procedures Act of 1974 (12 U.S.C. 2605) is amended by adding at the end 
the following:
    ``(n) Forbearance During the COVID-19 Emergency.--
            ``(1) Consumer right to request a forbearance.--
                    ``(A) Request for forbearance.--A borrower 
                experiencing a financial hardship during the COVID-19 
                emergency may request forbearance from any mortgage 
                obligation, regardless of delinquency status, by 
                submitting a request to the borrower's servicer, either 
                orally or in writing, affirming that the borrower is 
                experiencing hardship during the COVID-19 emergency. A 
                borrower shall not be required to provide any 
                additional documentation to receive such forbearance.
                    ``(B) Length of forbearance; extension.--A 
                forbearance requested pursuant to subparagraph (A) 
                shall be provided for a period of 180 days, and may be 
                extended upon request of the borrower for an additional 
                180 days.
                    ``(C) Treatment of tenants.--A borrower receiving a 
                forbearance under this subsection with respect to a 
                mortgage secured by a dwelling that has tenants, 
                whether or not the borrower also lives in the dwelling, 
                shall provide the tenants with rent relief for a period 
                not less than the period covered by the forbearance.
            ``(2) Automatic forbearance for delinquent borrowers.--
                    ``(A) In general.--Notwithstanding any other law 
                governing forbearance relief, during the COVID-19 
                emergency, any borrower who is or becomes 60 days or 
                more delinquent on a mortgage obligation shall 
                automatically be granted a 180-day forbearance, which 
                may be extended upon request of the borrower for an 
                additional 180 days. Such a borrower may elect to 
                continue making regular payments by notifying the 
                servicer of the mortgage obligation of such election.
                    ``(B) Notice to borrower.--The servicer of a 
                mortgage obligation placed in forbearance pursuant to 
                subparagraph (A) shall provide the borrower written 
                notification of the forbearance and its duration as 
                well as information about available loss mitigation 
                options and the right to end the forbearance and resume 
                making regular payments.
                    ``(C) Treatment of payments during forbearance.--
                Any payments made by the borrower during the 
                forbearance period shall be credited to the borrower's 
                account in accordance with section 129F of the Truth in 
                Lending Act (15 U.S.C. 1639f) or as the borrower may 
                otherwise instruct that is consistent with the terms of 
                the mortgage loan contract.
            ``(3) Requirements for servicers.--
                    ``(A) Notification.--
                            ``(i) In general.--Each servicer of a 
                        federally related mortgage loan shall notify 
                        the borrower of their right to request 
                        forbearance under paragraph (1)--
                                    ``(I) not later than 14 days after 
                                the date of enactment of this 
                                subsection; and
                                    ``(II) until the end of COVID-19 
                                emergency--
                                            ``(aa) on each periodic 
                                        statement provided to the 
                                        borrower; and
                                            ``(bb) in any oral or 
                                        written communication by the 
                                        servicer with or to the 
                                        borrower.
                            ``(ii) Manner of notification.--
                                    ``(I) Written notification.--Any 
                                written notification required under 
                                this section--
                                            ``(aa) shall be provided--

                                                    ``(AA) in English 
                                                and Spanish and in any 
                                                additional languages in 
                                                which the servicer 
                                                communicates, including 
                                                the language in which 
                                                the loan was 
                                                negotiated, to the 
                                                extent known by the 
                                                servicer; and

                                                    ``(BB) at least as 
                                                clearly and 
                                                conspicuously as the 
                                                most clear and 
                                                conspicuous disclosure 
                                                on the document;

                                            ``(bb) shall include the 
                                        notification of the 
                                        availability of language 
                                        assistance and housing 
                                        counseling produced by the 
                                        Federal Housing Finance Agency 
                                        under subsection (o); and
                                            ``(cc) may be provided by 
                                        first-class mail or 
                                        electronically, if the borrower 
                                        has otherwise consented to 
                                        electronic communication with 
                                        the servicer and has not 
                                        revoked such consent.
                                    ``(II) Oral notification.--Any oral 
                                notification required under clause (i) 
                                shall be provided in the language the 
                                servicer otherwise uses to communicate 
                                with the borrower.
                                    ``(III) Written translations.--In 
                                providing written notifications in 
                                languages other than English under 
                                subclause (I), a servicer may rely on 
                                written translations developed by the 
                                Federal Housing Finance Agency or the 
                                Bureau.
                    ``(B) Other requirements.--
                            ``(i) Forbearance required.--Upon receiving 
                        a request for forbearance from a consumer under 
                        paragraph (1) or placing a borrower in 
                        automatic forbearance under paragraph (2), a 
                        servicer shall provide the forbearance for not 
                        less than 180 days, and an additional 180 days 
                        at the request of the borrower, provided that 
                        the borrower will have the option to 
                        discontinue the forbearance at any time.
                            ``(ii) Prohibition on fees, penalties, and 
                        interest.--During the period of a forbearance 
                        under this subsection, no fees, penalties or 
                        additional interest beyond the amounts 
                        scheduled or calculated as if the borrower made 
                        all contractual payments on time and in full 
                        under the terms of the mortgage contract in 
                        effect at the time the borrower enters into the 
                        forbearance shall accrue.
                            ``(iii) Treatment of escrow payments.--If a 
                        borrower in forbearance under this subsection 
                        is required to make payments to an escrow 
                        account, the servicer shall pay or advance the 
                        escrow disbursements in a timely manner 
                        (defined as on or before the deadline to avoid 
                        a penalty), regardless of the status of the 
                        borrower's payments. The servicer may collect 
                        any resulting escrow shortage or deficiency 
                        from the borrower after the forbearance period 
                        ends, in a lump sum payment, spread over 60 
                        months, or capitalized into the loan, at the 
                        borrower's election.''.
    (d) Notification of Language Assistance and Housing Counseling.--
Section 6 of the Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2605), as amended by subsection (c), is further amended by 
adding at the end the following:
    ``(o) Notification of Language Assistance and Housing Counseling.--
            ``(1) In general.--The Federal Housing Finance Agency 
        shall, within 30 days of the date of enactment of this Act, 
        make available a document providing notice of the availability 
        of language assistance and housing counseling in substantially 
        the same form, and in at least the same languages, as the 
        existing Language Translation Disclosure.
            ``(2) Minimum requirement.--The document described under 
        subsection (a) shall include the notice in at least all the 
        languages for which Federal Housing Finance Agency currently 
        has translations on its existing Language Translation 
        Disclosure available.
            ``(3) Provision to servicers.--The Federal Housing Finance 
        Agency shall make this document available to servicers to 
        fulfill their requirements under subsection (n).''.
    (e) United States Department of Agriculture Direct Loan Program.--
Section 505 of the Housing Act of 1949 (42 U.S.C. 1475) is amended--
            (1) by redesignating subsection (b) as subsection (c); and
            (2) by inserting after subsection (a) the following:
    ``(b) Loan Modification.--
            ``(1) In general.--The Secretary shall implement a loan 
        modification program to modify the terms of outstanding loans 
        for borrowers who face financial hardship.
            ``(2) Affordable payments.--The Secretary's loan 
        modification program under paragraph (1) shall be designed so 
        as to provide affordable payments for borrowers. In defining 
        `affordable payments' the Secretary shall consult definitions 
        of affordability promulgated by the Federal Housing Finance 
        Authority, the Department of Housing and Urban Development, and 
        the Bureau of Consumer Financial Protection.
            ``(3) Additional program requirements.--The Secretary's 
        loan modification program under paragraph (1) shall allow for 
        measures including extension of the remaining loan term to up 
        to 480 months and a reduction in interest rate to the market 
        interest rate as defined by regulations of the Secretary. The 
        modification program shall be available for borrowers in a 
        moratorium and for borrowers not already in a moratorium who 
        qualify under the terms established by the Secretary. The 
        Secretary may also establish reasonable additional measures for 
        providing affordable loan modifications to borrowers.'';
            (3) in subsection (c), as so redesignated, by adding at the 
        end the following: ``Acceleration of the promissory note and 
        initiation of foreclosure proceedings shall not terminate a 
        borrower's eligibility for a moratorium, loan reamortization, 
        special servicing, or other foreclosure alternative.''; and
            (4) by adding at the end the following:
    ``(d) Requirement.--The Secretary shall comply with subsection 
(k)(1), (n), and (o) of section 6 of the Real Estate Settlement 
Procedures Act of 1974 with respect to any single-family loans it holds 
or services.''.
    (f) Forbearance of Residential Mortgage Loan Payments for 
Multifamily Properties (5+ Units).--
            (1) In general.--During the COVID-19 emergency, a 
        multifamily borrower experiencing a financial hardship due, 
        directly or indirectly, to the COVID-19 emergency may request a 
        forbearance under the terms set forth in this section.
            (2) Request for relief.--A multifamily borrower may submit 
        a request for forbearance under paragraph (1) to the borrower's 
        servicer, either orally or in writing, affirming that the 
        multifamily borrower is experiencing hardship during the COVID-
        19 emergency.
            (3) Forbearance period.--
                    (A) In general.--Upon receipt of an oral or written 
                request for forbearance from a multifamily borrower, a 
                servicer shall--
                            (i) document the financial hardship;
                            (ii) provide the forbearance for not less 
                        than 180 days; and
                            (iii) provide the forbearance for an 
                        additional 180 days upon the request of the 
                        borrower at least 30 days prior to the end of 
                        the forbearance period described under 
                        subparagraph (A).
                    (B) Right to discontinue.--A multifamily borrower 
                shall have the option to discontinue the forbearance at 
                any time.
            (4) Renter protections.--During the term of a forbearance 
        under this section, a multifamily borrower may not--
                    (A) evict a tenant for nonpayment of rent; or
                    (B) apply or accrue any fees or other penalties on 
                renters for nonpayment of rent.
            (5) Obligation to bring the loan current.--A multifamily 
        borrower shall bring a loan placed in forbearance under this 
        section current within the earlier of--
                    (A) 12 months after the conclusion of the 
                forbearance period; or
                    (B) receipt of any business interruption insurance 
                proceeds by the multifamily borrower.
            (6) Definition.--For the purposes of this subsection, the 
        term ``multifamily borrower'' means a borrower of a residential 
        mortgage loan that is secured by a lien against a property 
        comprising five or more dwelling units.
    (g) Federal Reserve Credit Facility for Mortgage Servicers.--
            (1) In general.--The Board of Governors of the Federal 
        Reserve System and the Secretary of the Treasury, pursuant to 
        the authority granted under section 13(3) of the Federal 
        Reserve Act, directly (or indirectly through an intermediary, 
        such as the Federal National Mortgage Association, the Federal 
        Home Loan Mortgage Corporation, the Government National 
        Mortgage Association, an insured depository institution, non-
        depository lending institution, or a special purpose vehicle)--
                    (A) shall extend credit to mortgage servicers and 
                other obligated advancing parties that in each case 
                have liquidity needs due to the COVID-19 emergency or 
                compliance with this Act with respect to mortgage loans 
                (the ``affected mortgages''); and
                    (B) may extend further credit to mortgage servicers 
                for other liquidity needs due to the actual or imminent 
                delinquency or default on mortgage loans due to the 
                COVID-19 emergency.
            (2) Non-compliant servicers.--A mortgage servicer shall not 
        be eligible for assistance under paragraph (1) if the provider 
        is in violation of any requirement under this Act, and fails to 
        promptly cure any such violation upon notice or discovery 
        thereof.
            (3) Payments and purchases.--Credit extended under 
        paragraph (1)(A) shall be in an amount sufficient to--
                    (A) cover--
                            (i) the pass-through payment of principal 
                        and interest to mortgage-backed securities 
                        holders;
                            (ii) the payment of taxes and insurance to 
                        third parties; and
                            (iii) the temporary reimbursement of 
                        modification costs and fees due to servicers 
                        that will be deferred until such time as a 
                        forbearance period terminates, due in each case 
                        on, or in respect of, such affected mortgage 
                        loans or related mortgage-backed securities; 
                        and
                    (B) purchase affected mortgages from pools of 
                securitized mortgages.
            (4) Collateral.--The credit authorized by this section 
        shall be secured by the pledgor's interest in accounts 
        receivable, loans, or related interests resulting from the 
        payment advances made on the affected mortgages by the mortgage 
        servicers.
            (5) Credit support.--The Secretary of the Treasury shall 
        provide credit support to the Board of Governors of the Federal 
        Reserve System for the program required by this section.
            (6) Conflict with other laws.--Notwithstanding any Federal 
        or State law to the contrary, the Federal National Mortgage 
        Association, the Federal Home Loan Mortgage Corporation, and 
        the Government National Mortgage Association may permit the 
        pledge or grant of a security interest in the pledgor's 
        interest in such accounts receivable or loans or related 
        interests and honor or permit the enforcement of such pledge or 
        grant in accordance with its terms.
            (7) Duration.--The extension of credit by the Board of 
        Governors of the Federal Reserve System and credit support from 
        the Secretary of the Treasury under this section shall be 
        available until the later of--
                    (A) 6 months after the end of the COVID-19 
                emergency; and
                    (B) the date on which the Board of Governors of the 
                Federal Reserve System and the Secretary of the 
                Treasury determine such credit and credit support 
                should no longer be available to address the liquidity 
                concern addressed by this section.
            (8) Amendments to national housing act.--Section 306(g)(1) 
        of the National Housing Act (12 U.S.C. 1721(g)(1)) is amended--
                    (A) by inserting the following new sentence after 
                the fourth sentence in the paragraph: ``In any case in 
                which (I) the President declares a major disaster or 
                emergency for the Nation or any area that in either 
                case has been affected by damage or other adverse 
                effects of sufficient severity and magnitude to warrant 
                major disaster assistance under the Robert T. Stafford 
                Disaster Relief and Emergency Assistance Act or other 
                Federal law, (II) upon request of an Issuer of any 
                security, the Association elects to extend to the 
                Issuer one or more of the disaster assistance or 
                emergency programs that the Association determines to 
                be available to account for the Issuer's failure or 
                anticipated failure to receive from the mortgagor the 
                full amount of principal and interest due, then (III) 
                the Association may elect not to declare the Issuer to 
                be in default because of such request for such disaster 
                or emergency assistance.'';
                    (B) by inserting after the word ``issued'' in the 
                sixth sentence, as redesignated, the following: 
                ``subject to any pledge or grant of security interest 
                of the pledgor's interest in and to any such mortgage 
                or mortgages or any interest therein and the proceeds 
                thereon, which the Association may elect to approve;''; 
                and
                    (C) by inserting after the word ``issued'' in the 
                seventh sentence, as redesignated, the following: ``, 
                or (D) its approval and honoring of any pledge or grant 
                of security interest of the pledgor's interest in and 
                to any such mortgage or mortgages or any interest 
                therein and proceeds thereon.''.
    (h) Safe Harbor.--
            (1) In general.--Notwithstanding any other provision of 
        law, whenever a servicer of residential mortgages of 
        residential mortgage-backed securities--
                    (A) grants a borrower relief under section 6(n) and 
                6(p) of the Real Estate Settlement Procedures Act of 
                1974 with respect to a residential mortgage originated 
                before April 1, 2020, including a mortgage held in a 
                securitization or other investment vehicle; and
                    (B) the servicer or trustee or issuer owes a duty 
                to investors or other parties regarding the standard 
                for servicing such mortgage,
        the servicer shall be deemed to have satisfied such a duty, and 
        the servicer shall not be liable to any party who is owed such 
        a duty and shall not be subject to any injunction, stay, or 
        other equitable relief to such party, based upon its good faith 
        compliance with the provisions of 6(n) and 6(p) of the Real 
        Estate Settlement Procedures Act of 1974. Any person, including 
        a trustee or issuer, who cooperates with a servicer when such 
        cooperation is necessary for the servicer to implement the 
        provisions of 6(n) and 6(p) of the Real Estate Settlement 
        Procedures Act of 1974 shall be protected from liability in the 
        same manner.
            (2) Standard industry practice.--Compliance with 6(n) and 
        6(p) of the Real Estate Settlement Procedures Act of 1974 
        during the COVID-19 emergency shall constitute standard 
        industry practice for purposes of all Federal and State laws.
            (3) Definitions.--As used in this subsection--
                    (A) the term ``servicer'' has the meaning given 
                that term under section 6(i)(2) of the Real Estate 
                Settlement Procedures Act of 1974 (12 U.S.C. 
                2605(i)(2)); and
                    (B) the term ``securitization vehicle'' has the 
                meaning given that term under section 129A(f)(3) of the 
                Truth in Lending Act (15 U.S.C. 1639a(f)(3)).
            (4) Rule of construction.--No provision of paragraph (1) or 
        (2) shall be construed as affecting the liability of any 
        servicer or person for actual fraud in servicing of a loan or 
        for the violation of a State or Federal law.
    (i) Post-Pandemic Mortgage Repayment Options.--Section 6 of the 
Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605), as 
amended by subsection (d), is further amended by adding at the end the 
following:
    ``(p) Post-Pandemic Mortgage Repayment Options.--With respect to a 
federally related residential mortgage loan, before the end of any 
forbearance provided under subsection (n), servicers shall--
            ``(1) evaluate the borrower's ability to return to making 
        regular mortgage payments;
            ``(2) if the borrower is able to return to making regular 
        mortgage payments at the end of the forbearance period--
                    ``(A) modify the borrower's loan to extend the term 
                for the same period as the length of the forbearance, 
                with all payments that were not made during the 
                forbearance distributed at the same intervals as the 
                borrower's existing payment schedule and evenly 
                distributed across those intervals, with no penalties, 
                late fees, additional interest accrued beyond the 
                amounts scheduled or calculated as if the borrower made 
                all contractual payments on time and in full under the 
                terms of the mortgage contract in effect at the time 
                the borrower entered into the forbearance, and with no 
                modification fee charged to the borrower; or
                    ``(B) if the borrower elects to modify the loan to 
                capitalize a resulting escrow shortage or deficiency, 
                the servicer may modify the borrower's loan by re-
                amortizing the principal balance and extending the term 
                of the loan sufficient to maintain the regular mortgage 
                payments; and
                    ``(C) notify the borrower in writing of the 
                extension, including provision of a new payment 
                schedule and date of maturity, and that the borrower 
                shall have the election of prepaying the suspended 
                payments at any time, in a lump sum or otherwise;
            ``(3) if the borrower is financially unable to return to 
        making periodic mortgage payments as provided for in the 
        mortgage contract at the end of the COVID-19 emergency--
                    ``(A) evaluate the borrower for all loan 
                modification options, without regard to whether the 
                borrower has previously requested, been offered, or 
                provided a loan modification or other loss mitigation 
                option and without any requirement that the borrower 
                come current before such evaluation or as a condition 
                of eligibility for such modification, including--
                            ``(i) further extending the borrower's 
                        repayment period;
                            ``(ii) reducing the principal balance of 
                        the loan; or
                            ``(iii) other modification or loss 
                        mitigation options available to the servicer 
                        under the terms of any investor requirements 
                        and existing laws and policies; and
                    ``(B) if the borrower qualifies for such a 
                modification, the service shall offer a loan with such 
                terms as to provide a loan with such terms as to 
                provide an affordable payment, with no penalties, late 
                fees, additional interest beyond the amounts scheduled 
                or calculated as if the borrower made all contractual 
                payments on time and in full under the terms of the 
                mortgage contract in effect at the time the borrower 
                entered into the forbearance, and with no modification 
                fees charged to the borrower; and
            ``(4) if a borrower is granted a forbearance on payments 
        that would be owed pursuant to a trial loan modification plan--
                    ``(A) any forbearance of payments shall not be 
                treated as missed or delinquent payments or otherwise 
                negatively affect the borrower's ability to complete 
                their trial plan;
                    ``(B) any past due amounts as of the end of the 
                trial period, including unpaid interest, real estate 
                taxes, insurance premiums, and assessments paid on the 
                borrower's behalf, will be added to the mortgage loan 
                balance, but only to the extent that such charges are 
                not fees associated with the granting of the 
                forbearance, such as late fees, modification fees, or 
                unpaid interest from the period of the forbearance 
                beyond the amounts scheduled or calculated as if the 
                borrower made all contractual payments on time and in 
                full under the terms of the mortgage contract in effect 
                at the time the borrower entered into the forbearance; 
                and
                    ``(C) if the borrower is unable to resume payments 
                on the trial modification at the end of the forbearance 
                period, re-evaluate the borrower for all available loan 
                modifications under paragraph 3, without any 
                requirement that the borrower become current before 
                such evaluation or as a condition of eligibility for 
                such modification.''.
    (j) Claims of Affected Investors and Other Parties.--Any action 
asserting a taking under the Fifth Amendment to the Constitution of the 
United States as a result of this subsection shall be brought not later 
than 180 days after the end of the COVID-19 emergency.
    (k) Extension of the GSE Patch.--The Director of the Bureau of 
Consumer Financial Protection shall revise section 
1026.43(e)(4)(iii)(B) of title 12, Code of Federal Regulations, to 
extend the sunset of the special rule provided under such section 
1026.43(e)(4) until January 1, 2022, or such later date as may be 
determined by the Bureau.
    (l) Definitions.--In this section:
            (1) COVID-19 emergency.--The term ``COVID-19 emergency'' 
        means the period that begins upon the date of the enactment of 
        this Act and ends on the date of the termination by the Federal 
        Emergency Management Agency of the emergency declared on March 
        13, 2020, by the President under the Robert T. Stafford 
        Disaster Relief and Emergency Assistance Act (42 U.S.C. 4121 et 
        seq.) relating to the Coronavirus Disease 2019 (COVID-19) 
        pandemic.
            (2) Manufactured home.--The term ``manufactured home'' has 
        the meaning given that term under section 603 of the National 
        Manufactured Housing Construction and Safety Standards Act of 
        1974 (42 U.S.C. 5402).
            (3) Motor vehicle.--The term ``motor vehicle'' has the 
        meaning given that term under Section 1029(f) of the Consumer 
        Financial Protection Act of 2010 (12 U.S.C. 5519(f)).
            (4) 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 residence consisting of a 
        single dwelling unit that is occupied by the mortgagor.
                                 <all>