To establish the Office of the Homeowner Advocate.
IN THE SENATE OF THE UNITED STATES
March 30, 2011
Mr. FRANKEN (for himself, Ms. SNOWE, Mr. MENENDEZ, Mr. ROCKEFELLER,
Mr. DURBIN, Mr. SANDERS, Mr. BROWN of Ohio, Mrs. SHAHEEN, Mr. LAUTENBERG,
Mr. LEAHY, Mr. REED, Mr. MERKLEY, and Mrs. MURRAY) introduced the following
bill; which was read twice and referred to the Committee on Banking,
Housing, and Urban Affairs
To establish the Office of the Homeowner Advocate.
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 `Homeowner Advocate Act of 2011'.
SEC. 2. OFFICE OF THE HOMEOWNER ADVOCATE.
(a) Establishment- There is established in the Department of the Treasury
an office to be known as the `Office of the Homeowner Advocate' (in
this Act referred to as the `Office').
(1) IN GENERAL- The Director of the Office of the Homeowner Advocate
(in this Act referred to as the `Director') shall report directly
to the Assistant Secretary of the Treasury for Financial Stability,
and shall be entitled to compensation at the same rate as the highest
rate of basic pay established for the Senior Executive Service under
section 5382 of title 5, United States Code.
(2) APPOINTMENT- The Director shall be appointed by the Secretary,
after consultation with the Secretary of the Department of Housing
and Urban Development, and without regard to the provisions of title
5, United States Code, relating to appointments in the competitive
service or the Senior Executive Service.
(3) QUALIFICATIONS- An individual appointed under paragraph (2) shall
(A) experience as an advocate for homeowners; and
(B) experience dealing with mortgage servicers.
(4) RESTRICTION ON EMPLOYMENT- An individual may be appointed as Director
only if such individual was not an officer or employee of either a
mortgage servicer or the Department of the Treasury during the 4-year
period preceding the date of such appointment.
(5) HIRING AUTHORITY- The Director shall have the authority to hire
staff, obtain support by contract, and manage the budget of the Office
of the Homeowner Advocate.
SEC. 3. FUNCTIONS OF THE OFFICE.
(a) In General- It shall be the function of the Office--
(1) to assist homeowners, housing counselors, and housing lawyers
in resolving problems with the Home Affordable Modification Program
of the Making Home Affordable initiative of the Secretary, authorized
under the Emergency Economic Stabilization Act of 2008 (in this Act
referred to as the `Home Affordable Modification Program');
(2) to identify areas, both individual and systematic, in which homeowners,
housing counselors, and housing lawyers have problems in dealings
with the Home Affordable Modification Program;
(3) to the extent possible, to propose changes in the administrative
practices of the Home Affordable Modification Program, to mitigate
problems identified under paragraph (2);
(4) to identify potential legislative changes which may be appropriate
to mitigate such problems; and
(5) to implement other programs and initiatives that the Director
deems important to assisting homeowners, housing counselors, and housing
lawyers in resolving problems with the Home Affordable Modification
Program, which may include--
(A) running a triage hotline for homeowners at risk of foreclosure;
(B) providing homeowners with access to housing counseling programs
of the Department of Housing and Urban Development at no cost to
(C) developing Internet tools related to the Home Affordable Modification
(D) developing training and educational materials.
(1) IN GENERAL- Staff designated by the Director shall have the authority
to implement servicer remedies, on a case-by-case basis, subject to
the approval of the Assistant Secretary of the Treasury for Financial
(2) RESOLUTION OF HOMEOWNER CONCERNS- The Office shall, to the extent
possible, resolve all homeowner concerns not later than 30 days after
the opening of a case with such homeowner.
(c) Commencement of Operations- The Office shall commence its operations,
as required by this Act, not later than 3 months after the date of enactment
of this Act.
(d) Sunset- The Office shall cease operations as of the date on which
the Home Affordable Modification Program ceases to operate.
SEC. 4. RELATIONSHIP WITH EXISTING ENTITIES.
(a) Transfer- The Office shall coordinate and centralize all complaint
escalations relating to the Home Affordable Modification Program.
(b) Hotline- The HOPE hotline (or any successor triage hotline) shall
reroute all complaints relating to the Home Affordable Modification
Program to the Office.
(c) Coordination- The Office shall coordinate with the compliance office
of the Office of Financial Stability of the Department of the Treasury
and the Homeownership Preservation Office of the Department of the Treasury.
SEC. 5. RULE OF CONSTRUCTION.
Nothing in this Act shall prohibit a mortgage servicer from evaluating
a homeowner for eligibility under the Home Affordable Foreclosure Alternatives
Program while a case is still open with the Office of the Homeowner
Advocate. Nothing in this Act may be construed to relieve any loan services
from otherwise applicable rules, directives, or similar guidance under
the Home Affordable Modification Program relating to the continuation
or completion of foreclosure proceedings.
SEC. 6. REPORTS TO CONGRESS.
(a) Testimony- The Director shall be available to testify before the
Committee on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives, not
less frequently than 4 times a year, or at any time at the request of
the Chairs of either committee.
(b) Reports- Once annually, the Director shall provide a detailed report
to Congress on the Home Affordable Modification Program. Such report
shall contain full and substantive analysis, in addition to statistical
information, including, at a minimum--
(1) data and analysis of the types and volume of complaints received
from homeowners, housing counselors, and housing lawyers, broken down
by category of servicer, except that servicers may not be identified
by name in the report;
(2) a summary of not fewer than 20 of the most serious problems encountered
by Home Affordable Modification Program participants, including a
description of the nature of such problems;
(3) to the extent known, identification of the 10 most litigated issues
for Home Affordable Modification Program participants, including recommendations
for mitigating such disputes;
(4) data and analysis on the resolutions of the complaints received
from homeowners, housing counselors, and housing lawyers;
(5) identification of any programs or initiatives that the Office
has taken to improve the Home Affordable Modification Program;
(6) recommendations for such administrative and legislative action
as may be appropriate to resolve problems encountered by Home Affordable
Modification Program participants; and
(7) such other information as the Director may deem advisable.
SEC. 7. FUNDING.
Amounts made available for the costs of administration of the Home Affordable
Modification Program that are not otherwise obligated shall be available
to carry out the duties of the Office. Funding shall be maintained at
levels adequate to reasonably carry out the functions of the Office.
SEC. 8. PROHIBITION ON PARTICIPATION IN MAKING HOME AFFORDABLE FOR
BORROWERS WHO STRATEGICALLY DEFAULT.
No mortgage may be modified under the Making Home Affordable Program,
or with any funds from the Troubled Asset Relief Program, unless the
servicer of the mortgage loan has determined, in accordance with standards
and requirements established by the Secretary of the Treasury, that
the mortgagor cannot afford to make payments under the terms of the
existing mortgage loan. The Secretary of the Treasury, in consultation
with the Secretary of Housing and Urban Development, shall issue rules
to carry out this section not later than 90 days after the date of enactment
of this Act. This section shall not apply to any refinancing or modifications
made under the `FHA Program Adjustments to Support Refinancings for
Underwater Homeowners,' announced by the Department of the Treasury
and the Department of Housing and Urban Development on March 26, 2010,
as long as the program continues to be structured so that borrowers
participating in the FHA refinance program cannot be in default on their
primary mortgage at the time of refinance and their eligibility in the
program is not helped if they are in default on their second mortgage,
and thus lack a strategic reason to go into default on either their
first or second mortgage to participate in the program.
SEC. 9. PUBLIC AVAILABILITY OF INFORMATION.
(a) Public Availability of Data- The Secretary of the Treasury shall
revise the guidelines for the Home Affordable Modification Program of
the Making Home Affordable initiative of the Secretary of the Treasury,
authorized under the Emergency Economic Stabilization Act of 2008 (Public
Law 110-343), to establish that the data collected by the Secretary
of the Treasury from each mortgage servicer and lender participating
in the Program is made public in accordance with subsection (b).
(b) Content- Not more than 60 days after each monthly deadline for submission
of data by mortgage servicers and lender participating in the program,
the Treasury shall make all data tables available to the public at the
individual record level. This data shall include but not be limited
(1) higher risk loans, including loans made in connection with any
program to provide expanded loan approvals, shall be reported separately;
(A) the rate or pace at which such mortgages are becoming seriously
(B) whether such rate or pace is increasing or decreasing;
(C) if there are certain subsets within the loans covered by this
section that have greater or lesser rates or paces of delinquency;
(D) if such subsets exist, the characteristics of such subset of
(3) with respect to the loss mitigation efforts of the loan--
(A) the processes and practices that the reporter has in effect
to minimize losses on mortgages covered by this section; and
(B) the manner and methods by which such processes and practices
are being monitored for effectiveness;
(4) disclose, with respect to loans that are or become 60 or more
days past due, (provided that for purposes of disclosure under this
paragraph that each loan should have a unique number that is not the
same as any loan number the borrower, originator, or servicer uses),
the following attributes--
(A) the original loan amount;
(B) the current loan amount;
(C) the loan-to-value ratio and combined loan-to-value ratio, both
at origination and currently, and the number of liens on the property;
(D) the property valuation at the time of origination of the loan,
and all subsequent property valuations and the date of each valuation;
(E) each relevant credit score of each borrower obtained at any
time in connection with the loan, with the date of the credit score,
to the extent allowed by existing law;
(F) whether the loan has any mortgage or other credit insurance
(G) the current interest rate on such loan;
(H) any rate caps and floors if the loan is an adjustable rate mortgage
(I) the adjustable rate mortgage index or indices for such loan;
(J) whether the loan is currently past due, and if so how many days
such loan is past due;
(K) the total number of days the loan has been past due at any time;
(L) whether the loan is subject to a balloon payment;
(M) the date of each modification of the loan;
(N) whether any amounts of loan principal has been deferred or written
off, and if so, the date and amount of each deferral and the date
and amount of each writedown;
(O) whether the interest rate was changed from a rate that could
adjust to a fixed rate, and if so, the period of time for which
the rate will be fixed;
(P) the amount by which the interest rate on the loan was reduced,
and for what period of time it was reduced;
(Q) if the interest rate was reduced or fixed for a period of time
less than the remaining loan term, on what dates, and to what rates,
could the rate potentially increase in the future;
(R) whether the loan term was modified, and if so, whether it was
extended or shortened, and by what amount of time;
(S) whether the loan is in the process of foreclosure or similar
procedure, whether judicial or otherwise; and
(T) whether a foreclosure or similar procedure, whether judicial
or otherwise, has been completed.
(c) Guidelines and Regulations- The Secretary of the Treasury shall
establish guidelines and regulations necessary--
(1) to ensure that the privacy of individual consumers is appropriately
protected in the reports under this section;
(2) to make the data reported under this subsection available on a
public Web site with no cost to access the data, in a consistent format;
(3) to update the data no less frequently than monthly;
(4) to establish procedures for disclosing such data to the public
on a public Web site with no cost to access the data; and
(5) to allow the Secretary to make such deletions as the Secretary
may determine to be appropriate to protect any privacy interest of
any loan modification applicant, including the deletion or alteration
of the applicant's name and identification number.
(d) Exception- No data shall have to be disclosed if it voids or violates
existing contracts between the Secretary of Treasury and mortgage servicers
as part of the Making Home Affordable Program.