Monday, April 18, 2011

Rep. Elijah E. Cummings (D-Maryland) was joined by more than 20 original co-sponsors in introducing the Preserving Homes and Communities Act of 2011


Sen. Jack Reed (D-Rhode Island), has authored a companion bill (S.489), which has nine cosponsors in the Senate.

The lawmakers say the bills would make “major changes” to the mortgage servicing and foreclosure process including:

Requiring lenders and servicers to evaluate homeowners for modifications prior to initiating foreclosure, and to offer approved modifications to qualified homeowners.

Eliminating the “dual tracking” scenario in which borrowers are evaluated for a loan modification while foreclosure proceedings are advanced.

Requiring servicers, if they deny a modification, to prove that they actually have the legal right to foreclose.

Placing limits on the manner in which foreclosure-related fees can be charged.

Creating an appeals process for those homeowners who are denied a loan modification.
Separately, Rep. Brad Miller (D-North Carolina) and Sen. Sherrod Brown (D-Ohio) introduced bills in their respective chambers – by the name of the Foreclosure Fraud and Homeowner Abuse Prevention Act of 2011 — that they say would overhaul the mortgage servicing industry by realigning servicer incentives so that they act in the best interests of investors and homeowners.

According to a statement from the lead sponsors, their bills would:

Protect homeowners from servicer errors, miscommunications, and abusive fees.

End the rush to foreclosure and require servicers to work with homeowners to find sustainable mortgages.

Improve standards for staffing and casework by mortgage servicers.

Protect the interests of investors who buy securities backed by residential mortgages.

Reform oversight of pools of securitized mortgages.