Mortgage Modification Reform Act of 2010

Mr. President, I rise today to introduce the Mortgage Modification Reform Act, which is designed to protect homeowners and communities from big banks who fail to modify mortgages in a timely fashion.

In the past year I have heard from hundreds of families in New Hampshire who have fallen behind on their mortgages. Often, they tell me that they can no longer afford their payments because of circumstances beyond their control. A family member has been laid off or had her hours reduced. Medical bills have started piling up. Higher interest payments kicked in at just the wrong time. And since value of the average home has declined over 15 percent in New Hampshire, they now owe more on their home than it's worth.

But these families want to make it work, so they reach out to their bank or ``mortgage servicer'' to figure out a way to make payments they can afford. Often, when a homeowner comes to a servicer, they can work together to bring the homeowner's payments down to an affordable level. When a servicer modifies a mortgage, everybody wins: the homeowner can stay in their home; the servicer avoids the costly foreclosure process; and communities are spared from the devastating effects that foreclosures have on home values and communities.

That is why these families in New Hampshire and others across the country breathed a sigh of relief when they heard that a new program, called the Home Affordable Modification Program, or HAMP, would provide powerful incentives to servicers to work with borrowers to keep them in their homes.

We were told that HAMP would help 3-4 million homeowners stay in their homes by reducing the amount a family owes each month to 31 percent of its monthly income. The big, national servicer banks who signed up for the program would avoid the foreclosure process and receive incentive payments. Most importantly, communities would have benefitted by stemming the tide of foreclosures, which have so drastically lowered home values and the equity of millions of homeowners.

But a year into the program, it is clear that many of these big banks are unwilling or uninterested in helping people in our communities. The banks routinely lose documents and ask the borrower to send them in again, delaying the process for months at a time. They don't respond to calls and voice messages that are only returned weeks or months later-- if they are returned at all. And as homeowners wait for a decision, the banks charge them late fees, which puts them even further behind. When homeowners finally receive modification offers, they often come at the last minute--just days before the borrower's home is set to be auctioned.

As a result of these abuses, instead of helping the millions of homeowners that they promised would be able to stay in their homes, servicers have offered trial modifications to less than 30 percent of eligible homeowners. The banks participating in HAMP have only provided permanent relief to only 116,000 homeowners.

We know that the servicers are capable of success in this program because some servicers have been better than others. According to the latest Servicer Performance Report from the Treasury, some servicers have helped as little as 2 percent of their eligible

borrowers, while others have helped over 50 percent. And it's not surprising that some of the servicers with the worst numbers are the same big banks that were happy to be bailed out by TARP not too long ago.

It is time to tell these big banks that enough's enough. We need protections for homeowners, and we need to penalize the servicers who have failed to offer the help they promised.

That is why I am introducing legislation today, the Mortgage Modification Reform Act, to stop the big banks from abusing homeowners and to start penalizing those who do not live up to their promise to provide homeowners with the relief they need.

The Mortgage Modification Reform Act would charge banks ``late fees'' for every month that they fail to evaluate a homeowner for this program. After 3 months, if a homeowner has not received an answer on whether their mortgage will be modified, the banks' payments will be reduced 10 percent for each month that it fails to evaluate the homeowner. By reducing payments to the banks over time, the bank will be encouraged to evaluate these borrowers earlier and more frequently. This also protects the taxpayer by only rewarding those banks that respond quickly and punishing those that fail to act. Banks will have to perform to get paid, and if they don't, their compensation will stay with to the taxpayer.

This legislation would also require banks to stop the foreclosure process until it determines whether a borrower qualifies. This would also give much-needed peace of mind to homeowners who aren't sure which will come first: the modification they need, or the sale of their home.

In addition, the legislation would prevent banks from imposing fees while they wait for a decision. There is no reason that a bank should charge a homeowner for being delinquent while waiting for evaluation in the program. There is no reason for a homeowner to pay fees for an unnecessary foreclosure process. This legislation would put an end to these abusive practices.

Finally, the Mortgage Modification Reform Act provides a protection for borrowers that has been missing from day one of this program: a way for homeowners to request a review of the bank's decision. Right now, the banks make all the decisions whether a homeowner qualifies for the program or not. There is no way for the homeowner to appeal that decision. But we know that those decisions aren't always right. Many homeowners were originally told that they didn't qualify, but ask their Senator or get legal assistance to ask the servicer to take another look. Often, they did qualify for the program, but the servicer did not evaluate the borrower properly.

But not every homeowner should have to involve their Senator or a lawyer to get their bank to respond. They should be able to make their case on their own to an independent arbiter. This legislation requires the Treasury Department to create a separate, independent review process to allow homeowners who feel they have been wrongly denied the chance to stay in their home. In addition, to ensure transparency, this legislation would require the servicer to submit documentation to the Treasury for each denial that it makes.

Making this program work isn't just important for these homeowners, it's also critical to our economic recovery. With million homeowners across the nation behind on their mortgages and at risk of foreclosure, we need this program achieve its potential of stopping millions of homes from flooding the housing market and further depressing home values.

I urge my colleagues to join me to prevent banks from continuing to abuse this program, and to get it on track to provide help to the millions of homeowners who need it.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I rise today to introduce the Mortgage Modification Reform Act, which is designed to protect homeowners and communities from big banks who fail to modify mortgages in a timely fashion.

In the past year I have heard from hundreds of families in New Hampshire who have fallen behind on their mortgages. Often, they tell me that they can no longer afford their payments because of circumstances beyond their control. A family member has been laid off or had her hours reduced. Medical bills have started piling up. Higher interest payments kicked in at just the wrong time. And since value of the average home has declined over 15 percent in New Hampshire, they now owe more on their home than it's worth.

But these families want to make it work, so they reach out to their bank or ``mortgage servicer'' to figure out a way to make payments they can afford. Often, when a homeowner comes to a servicer, they can work together to bring the homeowner's payments down to an affordable level. When a servicer modifies a mortgage, everybody wins: the homeowner can stay in their home; the servicer avoids the costly foreclosure process; and communities are spared from the devastating effects that foreclosures have on home values and communities.

That is why these families in New Hampshire and others across the country breathed a sigh of relief when they heard that a new program, called the Home Affordable Modification Program, or HAMP, would provide powerful incentives to servicers to work with borrowers to keep them in their homes.

We were told that HAMP would help 3-4 million homeowners stay in their homes by reducing the amount a family owes each month to 31 percent of its monthly income. The big, national servicer banks who signed up for the program would avoid the foreclosure process and receive incentive payments. Most importantly, communities would have benefitted by stemming the tide of foreclosures, which have so drastically lowered home values and the equity of millions of homeowners.

But a year into the program, it is clear that many of these big banks are unwilling or uninterested in helping people in our communities. The banks routinely lose documents and ask the borrower to send them in again, delaying the process for months at a time. They don't respond to calls and voice messages that are only returned weeks or months later-- if they are returned at all. And as homeowners wait for a decision, the banks charge them late fees, which puts them even further behind. When homeowners finally receive modification offers, they often come at the last minute--just days before the borrower's home is set to be auctioned.

As a result of these abuses, instead of helping the millions of homeowners that they promised would be able to stay in their homes, servicers have offered trial modifications to less than 30 percent of eligible homeowners. The banks participating in HAMP have only provided permanent relief to only 116,000 homeowners.

We know that the servicers are capable of success in this program because some servicers have been better than others. According to the latest Servicer Performance Report from the Treasury, some servicers have helped as little as 2 percent of their eligible

borrowers, while others have helped over 50 percent. And it's not surprising that some of the servicers with the worst numbers are the same big banks that were happy to be bailed out by TARP not too long ago.

It is time to tell these big banks that enough's enough. We need protections for homeowners, and we need to penalize the servicers who have failed to offer the help they promised.

That is why I am introducing legislation today, the Mortgage Modification Reform Act, to stop the big banks from abusing homeowners and to start penalizing those who do not live up to their promise to provide homeowners with the relief they need.

The Mortgage Modification Reform Act would charge banks ``late fees'' for every month that they fail to evaluate a homeowner for this program. After 3 months, if a homeowner has not received an answer on whether their mortgage will be modified, the banks' payments will be reduced 10 percent for each month that it fails to evaluate the homeowner. By reducing payments to the banks over time, the bank will be encouraged to evaluate these borrowers earlier and more frequently. This also protects the taxpayer by only rewarding those banks that respond quickly and punishing those that fail to act. Banks will have to perform to get paid, and if they don't, their compensation will stay with to the taxpayer.

This legislation would also require banks to stop the foreclosure process until it determines whether a borrower qualifies. This would also give much-needed peace of mind to homeowners who aren't sure which will come first: the modification they need, or the sale of their home.

In addition, the legislation would prevent banks from imposing fees while they wait for a decision. There is no reason that a bank should charge a homeowner for being delinquent while waiting for evaluation in the program. There is no reason for a homeowner to pay fees for an unnecessary foreclosure process. This legislation would put an end to these abusive practices.

Finally, the Mortgage Modification Reform Act provides a protection for borrowers that has been missing from day one of this program: a way for homeowners to request a review of the bank's decision. Right now, the banks make all the decisions whether a homeowner qualifies for the program or not. There is no way for the homeowner to appeal that decision. But we know that those decisions aren't always right. Many homeowners were originally told that they didn't qualify, but ask their Senator or get legal assistance to ask the servicer to take another look. Often, they did qualify for the program, but the servicer did not evaluate the borrower properly.

But not every homeowner should have to involve their Senator or a lawyer to get their bank to respond. They should be able to make their case on their own to an independent arbiter. This legislation requires the Treasury Department to create a separate, independent review process to allow homeowners who feel they have been wrongly denied the chance to stay in their home. In addition, to ensure transparency, this legislation would require the servicer to submit documentation to the Treasury for each denial that it makes.

Making this program work isn't just important for these homeowners, it's also critical to our economic recovery. With million homeowners across the nation behind on their mortgages and at risk of foreclosure, we need this program achieve its potential of stopping millions of homes from flooding the housing market and further depressing home values.

I urge my colleagues to join me to prevent banks from continuing to abuse this program, and to get it on track to provide help to the millions of homeowners who need it.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, today I am pleased to introduce the PRECAUTION Act--the Prevention Resources for Eliminating Criminal Activity Using Tailored Interventions in Our Neighborhoods Act. It is a long name, but it stands for an important principle--that it is better to invest in precautionary measures now than it is to pay the costs of crime--both in dollars and lives--later on. I am pleased that the Senator from Pennsylvania, Senator Specter, will again join me as an original cosponsor of this legislation.

The Federal Government has three important roles to play in fighting crime. First, the Federal Government should develop and disseminate knowledge to state and local officials regarding the newest and most effective law enforcement techniques and strategies. Second, the Federal Government should provide financial support for innovations that our State and local partners cannot afford to fund on their own. With that funding, it should also provide guidance, training, and technical assistance to implement those innovations. Third, the Federal Government can help to create and maintain effective partnerships among agencies at all levels of government, partnerships that are crafted to address specific law enforcement challenges.

The PRECAUTION Act is designed to support all three of these important roles. It creates a national commission to wade through the sea of information on crime prevention and intervention strategies currently available to identify those programs that are most ready for replication around the country. Over-taxed law enforcement officials need a simple, accessible resource to turn to that recommends a few, top-tier crime prevention and intervention programs. They need a resource that will single out those existing programs that are truly ``evidence-based'' programs that are proven by scientifically reliable evidence to be effective. The commission created by the PRECAUTION Act will provide just such a report--written in plain language and focused on pragmatic implementation issues--approximately a year and a half after the bill is enacted.

In the course of holding hearings and writing this first report, the commission will also identify some types of prevention and intervention strategies that are promising but need further research and development before they are ready for further implementation. The National Institute of Justice then will administer a grant program that will fund pilot projects in these identified areas. The commission will follow closely the progress of these pilot projects, and at the end of the three-year grant program, it will publish a second report, providing a detailed discussion of each pilot project and its effectiveness. This second report will include detailed implementation information and will discuss both the successes and failures of the projects funded by the grants.

There is particular urgency for this bill as State and Federal budget shortfalls continue and State and local law enforcement are forced to do more with fewer resources. There is no doubt that money is tight, which makes it all the more important that innovative and cost- effective law enforcement strategies that benefit both public safety and the government bottom line are being used in our communities. To help accomplish this, the Federal Government must work in concert with State and local law enforcement, with the non-profit criminal justice community, and with other branches of State and Federal Government. While we have an obligation to provide leadership and support, we do not have the right to unilaterally take control from the State and local officials on the ground. With these partnerships in place we can invest our resources in crime-fighting measures, confident that they will work. Sometimes, small and careful advances are the ones that yield the most benefit.

The PRECAUTION Act answers a call by police chiefs and mayors from more than 50 cities around the country during a national conference hosted by the Police Executive Research Forum in 2006. According to a report on the event from the Forum, these law enforcement leaders agreed that while there is a desperate need for the law enforcement community to focus on violent crime, ``other municipal agencies and social services organizations--including schools, mental health, public health, courts, corrections, and conflict management groups--need to be brought together to partner toward the common goal of reducing violent crime.'' In the hearings held by the PRECAUTION Act commission, these voices will all be heard. In the reports filed by the commission, these perspectives will be acknowledged. In the pilot projects administered by the National Institute of Justice, these partnerships will be developed and fostered.

The Senate Judiciary Committee highlighted the need for cost saving measures when it held a hearing entitled ``Encouraging Innovative and Cost-Effective Crime Reduction Strategies.'' Chief of Police Michael Schirling of Burlington, Vermont, in response to a question I asked him in conjunction with the hearing, said of the PRECAUTION Act that it would be:

[A] useful tool for law enforcement that could, if properly

implemented, result in long-term cost savings not only for

law enforcement, but also for communities as a whole. The

manner in which creative initiatives would be studied to

validate their effectiveness and then added to a resource

library of new ideas seems like a prudent approach to

spreading important concepts and ideas to improve the

criminal justice system in a meaningful way.

The PRECAUTION Act, though very modest in scope, is an important supplement to the essential financial support the Federal Government provides to our State and local law enforcement partners through programs such as the Byrne Justice Assistance grants and the COPS grants. When State and local law enforcement receive Federal support for policing, they have difficult decisions to make on how to spend those Federal dollars. We all know that prevention and intervention are integral components of any comprehensive law enforcement plan. The PRECAUTION Act not only highlights the importance of these components, but will also help to single out some of the best, most effective forms of prevention and intervention programs. At the same time, it will help to develop additional, cutting-edge strategies that are supported by solid scientific evidence of their effectiveness.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I have sought recognition to introduce legislation to incorporate two historically significant properties into the boundary of Gettysburg National Military Park. This expansion effort is consistent with Gettysburg National Military Park's 1999 General Management Plan, the goals of the National Park Service and is supported by the Gettysburg Borough Council.

The bill I have introduced will expand the boundary of the park to include the Gettysburg Railroad Station, also known as the Lincoln Train Station, located in downtown Gettysburg, PA. This train station was built in 1858 and is listed in the National Register of Historic Places. The station served as a hospital during the Battle of Gettysburg and was the departure point for thousands of soldiers who were wounded or killed in battle. The Lincoln Train Station is perhaps most historically significant as the site at which President Abraham Lincoln arrived on November 18, 1863, 1 day before he delivered the Gettysburg Address.

Currently, the station is operated by the National Trust for Historic Gettysburg and is open to the public throughout the year. Additionally, the station

served as the home of the Pennsylvania Abraham Lincoln Bicentennial Commission, which promoted events to commemorate the 200th anniversary year of Lincoln's birth in 2009. I am informed that the borough of Gettysburg had planned for the Lincoln Train Station to be used as an information and orientation center for visitors. Toward that goal, the borough in 2006 completed a rehabilitation of the station funded thought a State grant but has been unable to operate the visitor center due to a lack of funds. Accordingly, I understand that the Gettysburg Borough Council voted in 2008 to transfer the station to the National Park Service.

The legislation I introduced also expands the boundary of Gettysburg National Military Park to include 45 acres of land at the southern end of Gettysburg battlefield. I am informed by National Park officials that there were cavalry skirmishes in this area during the Battle of Gettysburg in July of 1863. Moreover, I am advised that this property is environmentally significant as the home to wetlands and wildlife habitat related to the Plum Run stream that traverses the park. This 45-acre property is adjacent to current park land and was generously donated in April of 2009. Therefore, no federal land acquisition funding will be necessary to obtain this property.

This legislation will help preserve properties and land that are historically and environmentally significant and critically important to telling the story of the Battle of Gettysburg. The Civil War was a defining moment for our Nation and we ought to take steps necessary to preserve historical assets for the benefit of current and future generations.

I urge my colleagues to support this bill.

Mr. President, as Chairman of the Senate Committee on Veterans' Affairs, concerns have been raised to me about a technical error in the health care reform bill that was recently passed, the Patient Protection and Affordable Care Act, H.R. 3590. In drafting the PPACA, a provision was included which designates health care provided under VA's authority as meeting the minimum required health care coverage that an individual is required to maintain.

However, due to the way this exemption was worded, this definition may exclude children with spina bifida, who are seriously disabled and to whom VA provides reimbursement for comprehensive health care. The underlying bill gave authority to the Secretary of Health and Human Services to designate other care, which could include the VA spina bifida program, as meeting the definition of minimum essential coverage. This bill would simply clarify what was originally intended.

Chapter 18 of title 38 contains the Spina Bifida Health Care Program, which is a health benefit program administered by the Department of Veterans Affairs for Vietnam War and certain Korean War Veterans' birth children who have been diagnosed with spina bifida, except spina bifida occulta. The program provides reimbursement for medical services and supplies.

The legislation I introduce today corrects this small error. Additionally, this legislation would clarify that recipients of CHAMPVA would also be considered as meeting the requirement for minimum essential coverage.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.