[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3509 Introduced in Senate (IS)]
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116th CONGRESS
2d Session
S. 3509
To provide borrowers the right to request forbearance on mortgage loan
payments due to a declared disaster, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 17, 2020
Mr. Brown introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To provide borrowers the right to request forbearance on mortgage loan
payments due to a declared disaster, 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. CONSUMER RIGHT TO REQUEST FORBEARANCE.
The Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601
et seq.) is amended--
(1) in section 3 (12 U.S.C. 2602)--
(A) in paragraph (8), by striking ``and'' at the
end;
(B) in paragraph (9), by striking the period at the
end and inserting ``; and''; and
(C) by adding at the end the following:
``(10) the term `declared disaster' means--
``(A) the coronavirus disease (COVID-19) pandemic;
and
``(B) a major disaster or emergency declared by the
President under section 401 or 501, respectively, of
the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5170, 5191).''; and
(2) in section 6 (12 U.S.C. 2605)--
(A) in subsection (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) initiate any judicial or non-judicial
foreclosure process, move for a foreclosure judgment or
order of sale, or execute a foreclosure-related
eviction or foreclosure sale during the 180-day period
following a declared disaster in the area in which the
property is located;
``(F) fail to toll the time in a foreclosure
process on a property for not less than 180 days
following a declared disaster in the area in which the
property is located; or''; and
(B) by adding at the end the following:
``(n) Consumer Right To Request Forbearance.--
``(1) In general.--A borrower experiencing a financial
hardship due, directly or indirectly, to a declared disaster
may request forbearance from any mortgage payment for not less
than 180 days, which may be extended for an additional 180 days
at the request of the borrower, provided that, at the
borrower's request, either the initial or extended period of
forbearance may be shortened.
``(2) Accrual of interest or fees.--During a period of
forbearance described in paragraph (1), no interest or other
fees shall accrue on the borrower's account.
``(3) Request for relief.--A borrower may submit a request
for forbearance under paragraph (1) to their servicer, either
orally or in writing, affirming that the borrower is
experiencing hardship due, directly or indirectly, to a
declared disaster.
``(4) 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 (3)--
``(I) not later than 14 days after
the date of a declared disaster or, in
the case of the coronavirus disease
(COVID-19) pandemic, not later than 14
days after the date of enactment of
this Act; and
``(II) during the incident period
for a declared disaster and during not
less than the 180-day period following
that incident period--
``(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
clause (i)--
``(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; and
``(bb) 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.--Upon receiving a request
for forbearance from a consumer under paragraph (3), a
servicer shall--
``(i) with no additional documentation
required other than the borrower's attestation
to a hardship caused by the declared disaster
and with no fees, interest, or other penalties
charged to the borrower in connection with the
forbearance, provide the forbearance for not
less than 180 days, which may be extended for
an additional 180 days at the request of the
borrower, provided that, at the borrower's
request, either the initial or extended period
of forbearance may be shortened;
``(ii) while such forbearance is in effect,
pay or advance funds to make disbursements in a
timely manner from any escrow account
established on the mortgage loan, and maintain
regular communication with such borrower; and
``(iii)(I) before the end of such
forbearance, evaluate the borrower's ability to
return to making regular mortgage payments;
``(II) if the borrower is able to return to
making regular mortgage payments at the end of
the forbearance period--
``(aa) 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 or additional interest
accrued or modification fee charged to
the borrower; and
``(bb) 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 forborne payments at any time, in a
lump sum or otherwise;
``(III) if the borrower is financially
unable to return to making regular mortgage
payments at the end of the forbearance period--
``(aa) evaluate the borrower for
all loan modification options,
including--
``(AA) further extending
the borrower's repayment
period;
``(BB) reducing the
principal balance of the loan;
or
``(CC) other modification
options available to the
servicer under the terms of
their loan and existing laws
and policies; and
``(bb) if the borrower qualifies
for such a modification, modify the
borrower's loan to provide a loan with
such terms as to provide an affordable
payment, with no penalties, additional
interest, or modification fees charged
to the borrower; and
``(IV) if a borrower is granted a
forbearance on payments that would be owed
pursuant to a trial loan modification plan--
``(aa) 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;
and
``(bb) 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.''.
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