COVID–19 Mortgage Relief Act

I 116TH CONGRESS 2D SESSION H. R. 6741 To amend the CARES Act to provide forbearance and foreclosure moratoriums for all mortgage loans, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 8, 2020 Mr. CLAY (for himself, Ms. WATERS, Mr. LAWSON of Florida, Ms. NORTON, Mr. GREEN of Texas, Mr. LYNCH, Mr. GARCI´A of Illinois, Mr. SMITH of Washington, Mrs. HAYES, Mr. KHANNA, Mr. BROWN of Maryland, Miss RICE of New York, Mr. HASTINGS, Mr. ESPAILLAT, Mr. SHERMAN, Mr. CARSON of Indiana, Mr. SIRES, Ms. SCHAKOWSKY, Mr. MEEKS, Mr. HIG- GINS of New York, Mr. COHEN, Ms. ROYBAL-ALLARD, Ms. JUDY CHU of California, Mr. SOTO, and Ms. GABBARD) introduced the following bill; which was referred to the Committee on Financial Services, and in addi- tion to the Committee on the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provi- sions as fall within the jurisdiction of the committee concerned A BILL To amend the CARES Act to provide forbearance and fore- closure moratoriums for all mortgage loans, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. MORTGAGE RELIEF. 3 (a) SHORT TITLE.—This section may be cited as the 4 ‘‘COVID–19 Mortgage Relief Act’’. 5 VerDate Sep 11 2014 23:49 May 22, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6741.IH H6741 dlhill on DSK120RN23PROD with BILLS 2 •HR 6741 IH (b) MORTGAGE RELIEF.— 1 (1) FORBEARANCE AND FORECLOSURE MORA- 2 TORIUM FOR COVERED MORTGAGE LOANS.—Section 3 4022 of the CARES Act (15 U.S.C. 9056) is 4 amended— 5 (A) by striking ‘‘Federally backed mort- 6 gage loan’’ each place such term appears and 7 inserting ‘‘covered mortgage loan’’; and 8 (B) in subsection (a)— 9 (i) by amending paragraph (2) to read 10 as follows: 11 ‘‘(2) COVERED MORTGAGE LOAN.—The term 12 ‘covered mortgage loan’ means any credit trans- 13 action that is secured by a mortgage, deed of trust, 14 or other equivalent consensual security interest on a 15 1- to 4-unit dwelling or on residential real property 16 that includes a 1- to 4-unit dwelling, except that it 17 shall not include a credit transaction under an open 18 end credit plan other than a reverse mortgage.’’; and 19 (ii) by adding at the end the fol- 20 lowing: 21 ‘‘(3) COVERED PERIOD.—With respect to a 22 loan, the term ‘covered period’ means the period be- 23 ginning on the date of enactment of this Act and 24 ending 12 months after such date of enactment.’’. 25 VerDate Sep 11 2014 04:27 May 19, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6741.IH H6741 dlhill on DSK120RN23PROD with BILLS 3 •HR 6741 IH (2) AUTOMATIC FORBEARANCE FOR DELIN- 1 QUENT BORROWERS.—Section 4022(c) of the 2 CARES Act (15 U.S.C. 9056(c)), as amended by 3 paragraph (5) of this subsection, is further amended 4 by adding at the end the following: 5 ‘‘(9) AUTOMATIC FORBEARANCE FOR DELIN- 6 QUENT BORROWERS.— 7 ‘‘(A) IN GENERAL.—Notwithstanding any 8 other law governing forbearance relief— 9 ‘‘(i) any borrower whose covered mort- 10 gage loan became 60 days delinquent be- 11 tween March 13, 2020, and the date of en- 12 actment of this paragraph, and who has 13 not already received a forbearance under 14 subsection (b), shall automatically be 15 granted a 60-day forbearance that begins 16 on the date of enactment of this para- 17 graph, provided that a borrower shall not 18 be considered delinquent for purposes of 19 this paragraph while making timely pay- 20 ments or otherwise performing under a 21 trial modification or other loss mitigation 22 agreement; and 23 ‘‘(ii) any borrower whose covered 24 mortgage loan becomes 60 days delinquent 25 VerDate Sep 11 2014 04:27 May 19, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6741.IH H6741 dlhill on DSK120RN23PROD with BILLS 4 •HR 6741 IH between the date of enactment of this 1 paragraph and the end of the covered pe- 2 riod, and who has not already received a 3 forbearance under subsection (b), shall 4 automatically be granted a 60-day forbear- 5 ance that begins on the 60th day of delin- 6 quency, provided that a borrower shall not 7 be considered delinquent for purposes of 8 this paragraph while making timely pay- 9 ments or otherwise performing under a 10 trial modification or other loss mitigation 11 agreement. 12 ‘‘(B) INITIAL EXTENSION.—An automatic 13 forbearance provided under subparagraph (A) 14 shall be extended for up to an additional 120 15 days upon the borrower’s request, oral or writ- 16 ten, submitted to the borrower’s servicer affirm- 17 ing that the borrower is experiencing a financial 18 hardship that prevents the borrower from mak- 19 ing timely payments on the covered mortgage 20 loan due, directly or indirectly, to the COVID– 21 19 emergency. 22 ‘‘(C) SUBSEQUENT EXTENSION.—A for- 23 bearance extended under subparagraph (B) 24 shall be extended for up to an additional 180 25 VerDate Sep 11 2014 04:27 May 19, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6741.IH H6741 dlhill on DSK120RN23PROD with BILLS 5 •HR 6741 IH days, up to a maximum of 360 days (including 1 the period of automatic forbearance), upon the 2 borrower’s request, oral or written, submitted to 3 the borrower’s servicer affirming that the bor- 4 rower is experiencing a financial hardship that 5 prevents the borrower from making timely pay- 6 ments on the covered mortgage loan due, di- 7 rectly or indirectly, to the COVID–19 emer- 8 gency. 9 ‘‘(D) RIGHT TO ELECT TO CONTINUE MAK- 10 ING PAYMENTS.—With respect to a forbearance 11 provided under this paragraph, the borrower of 12 such loan may elect to continue making regular 13 payments on the loan. A borrower who makes 14 such election shall be offered a loss mitigation 15 option pursuant to subsection (d) within 30 16 days of resuming regular payments to address 17 any payment deficiency during the forbearance. 18 ‘‘(E) RIGHT TO SHORTEN FORBEAR- 19 ANCE.—At a borrower’s request, any period of 20 forbearance provided under this paragraph may 21 be shortened. A borrower who makes such a re- 22 quest shall be offered a loss mitigation option 23 pursuant to subsection (d) within 30 days of re- 24 VerDate Sep 11 2014 04:27 May 19, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6741.IH H6741 dlhill on DSK120RN23PROD with BILLS 6 •HR 6741 IH suming regular payments to address any pay- 1 ment deficiency during the forbearance. 2 ‘‘(10) AUTOMATIC FORBEARANCE FOR CERTAIN 3 REVERSE MORTGAGE LOANS.— 4 ‘‘(A) IN GENERAL.—When any covered 5 mortgage loan which is also a federally insured 6 reverse mortgage loan, during the covered pe- 7 riod, is due and payable due to the death of the 8 last borrower or end of a deferral period or eli- 9 gible to be called due and payable due to a 10 property charge default, or if the borrower de- 11 faults on a property charge repayment plan, or 12 if the borrower defaults for failure to complete 13 property repairs, or if an obligation of the bor- 14 rower under the Security Instrument is not per- 15 formed, the mortgagee automatically shall be 16 granted a six-month extension of— 17 ‘‘(i) the mortgagee’s deadline to re- 18 quest due and payable status from the De- 19 partment of Housing and Urban Develop- 20 ment; 21 ‘‘(ii) the mortgage’s deadline to send 22 notification to the mortgagor or his or her 23 heirs that the loan is due and payable; 24 VerDate Sep 11 2014 23:49 May 22, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6741.IH H6741 dlhill on DSK120RN23PROD with BILLS 7 •HR 6741 IH ‘‘(iii) the deadline to initiate fore- 1 closure; 2 ‘‘(iv) any reasonable diligence period 3 related to foreclosure or the Mortgagee Op- 4 tional Election; 5 ‘‘(v) if applicable, the deadline to ob- 6 tain the due and payable appraisal; and 7 ‘‘(vi) any claim submission deadline, 8 including the 6-month acquired property 9 marketing period. 10 ‘‘(B) FORBEARANCE PERIOD.—The mort- 11 gagee shall not request due and payable status 12 from the Secretary of Housing and Urban De- 13 velopment nor initiate foreclosure during this 14 six-month period described under subparagraph 15 (A), which shall be considered a forbearance pe- 16 riod. 17 ‘‘(C) EXTENSION.—A forbearance provided 18 under subparagraph (B) and related deadline 19 extension authorized under subparagraph (A) 20 shall be extended for an additional 180 days 21 upon— 22 ‘‘(i) the borrower’s request, oral or 23 written, submitted to the borrower’s 24 servicer affirming that the borrower is ex- 25 VerDate Sep 11 2014 04:27 May 19, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6741.IH H6741 dlhill on DSK120RN23PROD with BILLS 8 •HR 6741 IH periencing a financial hardship that pre- 1 vents the borrower from making payments 2 on property charges, completing property 3 repairs, or performing an obligation of the 4 borrower under the Security Instrument 5 due, directly or indirectly, to the COVID– 6 19 emergency; 7 ‘‘(ii) a non-borrowing spouse’s re- 8 quest, oral or written, submitted to the 9 servicer affirming that the non-borrowing 10 spouse has been unable to satisfy all cri- 11 teria for the Mortgagee Optional Election 12 program due, directly or indirectly, to the 13 COVID-19 emergency, or to perform all 14 actions necessary to become an eligible 15 non-borrowing spouse following the death 16 of all borrowers; or 17 ‘‘(iii) a successor-in-interest of the 18 borrower’s request, oral or written, sub- 19 mitted to the servicer affirming the heir’s 20 difficulty satisfying the reverse mortgage 21 loan due, directly or indirectly, to the 22 COVID-19 emergency. 23 ‘‘(D) CURTAILMENT OF DEBENTURE IN- 24 TEREST.—Where any covered mortgage loan 25 VerDate Sep 11 2014 04:27 May 19, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H6741.IH H6741 dlhill on DSK120RN23PROD with BILLS 9 •HR 6741 IH which is also a federally insured reverse mort- 1 gage loan is in default during the covered pe- 2 riod and subject to a prior event which provides 3 for curtailment of debenture interest in connec- 4 tion with a claim for insurance benefits, the 5 curtailment of debenture interest shall be sus- 6 pended during any forbearance period provided 7 herein.’’. 8 (3) ADDITIONAL FORECLOSURE AND REPOSSES- 9 SION PROTECTIONS.—Section 4022(c) of the 10 CARES Act (15 U.S.C. 9056(c)) is amended— 11 (A) in paragraph (2), by striking ‘‘may not 12 initiate any judicial or non-judicial foreclosure 13 process, move for a foreclosure judgment or 14 order of sale, or execute a foreclosure-related 15 eviction or foreclosure sale for not less than the 16 60-day period beginning on March 18, 2020’’ 17 and inserting ‘‘may not initiate or proceed with 18 any judicial or non-judicial foreclosure process, 19 schedule a foreclosure sale, move for a fore- 20 closure judgment or order of sale, execute a 21 foreclosure related eviction or foreclosure sale 22 for six months after the date of enactment of 23 the COVID–19 HERO Act’’; and 24 (B) by adding at the end the following: 25 VerDate Sep 11 2014 04:27 May 19, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H6741.IH H6741 dlhill on DSK120RN23PROD with BILLS 10 •HR 6741 IH ‘‘(3) REPOSSESSION MORATORIUM.—In the case 1 of personal property, including any recreational or 2 motor vehicle, used as a dwelling, no person may use 3 any judicial or non-judicial procedure to repossess or 4 otherwise take possession of such property for six 5 months after date of enactment of this paragraph.’’. 6 (4) MORTGAGE FORBEARANCE REFORMS.—Sec- 7 tion 4022 of the CARES Act (15 U.S.C. 9056) is 8 amended— 9 (A) in subsection (b), by striking para- 10 graphs (1), (2), and (3) and inserting the fol- 11 lowing: 12 ‘‘(1) IN GENERAL.—During the covered period, 13 a borrower with a covered mortgage loan who has 14 not obtained automatic forbearance pursuant to this 15 section and who is experiencing a financial hardship 16 that prevents the borrower from making timely pay- 17 ments on the covered mortgage loan due, directly or 18 indirectly, to the COVID–19 emergency may request 19 forbearance on the loan, regardless of delinquency 20 status, by— 21 ‘‘(A) submitting a request, orally or in 22 writing, to the servicer of the loan; and 23 ‘‘(B) affirming that the borrower is experi- 24 encing a financial hardship that prevents the 25 VerDate Sep 11 2014 04:27 May 19, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H6741.IH H6741 dlhill on DSK120RN23PROD with BILLS 11 •HR 6741 IH borrower from making timely payments on the 1 covered mortgage loan due, directly or indi- 2 rectly, to the COVID–19 emergency. 3 ‘‘(2) DURATION OF FORBEARANCE.— 4 ‘‘(A) IN GENERAL.—Upon a request by a 5 borrower to a servicer for forbearance under 6 paragraph (1), such forbearance shall be grant- 7 ed by the servicer for the period requested by 8 the borrower, up to an initial length of 180 9 days, the length of which shall be extended by 10 the servicer, at the request of the borrower for 11 the period or periods requested, for a total for- 12 bearance period of up to 12 months. 13 ‘‘(B) MINIMUM FORBEARANCE 14 AMOUNTS.—For purposes of granting a forbear- 15 ance under this paragraph, a servicer may 16 grant an initial forbearance with a term of not 17 less than 90 days, provided that it is automati- 18 cally extended for an additional 90 days unless 19 the servicer confirms the borrower does not 20 want to renew the forbearance or that the bor- 21 rower is no longer experiencing a financial 22 hardship that prevents the borrower from mak- 23 ing timely mortgage payments due, directly or 24 indirectly, to the COVID–19 emergency. 25 VerDate Sep 11 2014 23:49 May 22, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H6741.IH H6741 dlhill on DSK120RN23PROD with BILLS 12 •HR 6741 IH ‘‘(C) RIGHT TO SHORTEN FORBEAR- 1 ANCE.—At a borrower’s request, any period of 2 forbearance described under this paragraph 3 may be shortened. A borrower who makes such 4 a request shall be offered a loss mitigation op- 5 tion pursuant to subsection (d) within 30 days 6 of resuming regular payments to address any 7 payment deficiency during the forbearance. 8 ‘‘(3) ACCRUAL OF INTEREST OR FEES.—A 9 servicer shall not charge a borrower any fees, pen- 10 alties, or interest (beyond the amounts scheduled or 11 calculated as if the borrower made all contractual 12 payments on time and in full under the terms of the 13 mortgage contract) in connection with a forbearance, 14 provided that a servicer may offer the borrower a 15 modification option at the end of a forbearance pe- 16 riod granted hereunder that includes the capitaliza- 17 tion of p [Text truncated for display. Full text available on Congress.gov.]