S. 73Senate111th Congress (2009-2011)In Committee

Systematic Foreclosure Prevention and Mortgage Modification Act

Introduced January 6, 2009

Legislative Activity

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2 earlier actions
SenateIntro Referral Latest Action

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (text of measure as introduced: CR S73-74)

January 6, 2009

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SenateIntro Referral

Introduced in Senate

January 6, 2009

SenateIntro Referral

Sponsor introductory remarks on measure. (CR S72-73)

January 6, 2009

SenateIntro Referral

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (text of measure as introduced: CR S73-74)

January 6, 2009

Floor Debate

15 members

What members said about S. 73 on the floor

6 Republicans9 Democrats
Dianne Feinstein
Sen. Dianne FeinsteinD-CA · Jan 6, 2009

Mr. President, I am pleased to join Senators Schumer, Snowe, and Boxer in introducing legislation to prohibit the selling and counterfeiting of tickets to the Presidential inaugural ceremony. The…

Daniel K. Inouye
Sen. Daniel K. InouyeD-HI · Jan 6, 2009

Mr. President, today I introduce the Clinical Social Workers' Recognition Act to correct a continuing problem in the Federal Employees Compensation Act. This bill will also provide clinical social…

John McCain
Sen. John McCainR-AZ · Jan 6, 2009

Mr. President, I am pleased to be joined by Senator Ensign in introducing the Abolishing Aviation Barriers Act of 2009. This bill would remove the arbitrary restrictions that prevent Americans from…

Herb Kohl
Sen. Herb KohlD-WI · Jan 6, 2009

Mr. President, I rise today to introduce the Generics First Act. This legislation requires the Federal Government's Medicare Part D prescription drug program to use generic drugs whenever available,…

Patrick J. Leahy
Sen. Patrick J. LeahyD-VT · Jan 6, 2009

Mr. Presdient, as we begin the 111th Congress, we will try, once again, to enact comprehensive immigration reforms that have eluded us in the past several years. With an administration that…

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John F. Kerry
Sen. John F. KerryD-MA · Jan 6, 2009

Mr. President, it is my great hope that Congress will move this year to see that the successful, bipartisan State Children's Health Insurance Program, SCHIP, is allowed the opportunity to fulfill its…

Olympia J. Snowe
Sen. Olympia J. SnoweR-ME · Jan 6, 2009

Mr. President, I rise today to reintroduce a bill I offered last December that will provide much-needed relief to struggling families across America. The Unemployment Benefit Tax Suspension Act of…

Joseph I. Lieberman
Sen. Joseph I. LiebermanD-CT · Jan 6, 2009

Mr. President, I am honored to have the opportunity today, obviously early on this first day of this new session of Congress, together with my colleague from Utah, Senator Hatch, to introduce…

Richard J. Durbin
Sen. Richard J. DurbinD-IL · Jan 6, 2009

Mr. President, as the 111th Congress begins, the most important item on our agenda is to help end the worst economic crisis America has faced since the Great Depression. I look forward to working…

Russell D. Feingold
Sen. Russell D. FeingoldD-WI · Jan 6, 2009

Mr. President, I would like to thank the senior Senator from Wisconsin for his hard work to address antitrust issues in the rail industry along with other industries as Chairman of the Antitrust,…

Dianne Feinstein
Sen. Dianne FeinsteinD-CA · Jan 6, 2009

Mr. President, I rise today to introduce legislation that will limit foreclosures and stabilize home values through Federal loan guarantees and standardized procedures for mortgage workout…

Orrin G. Hatch
Sen. Orrin G. HatchR-UT · Jan 6, 2009

Mr. President, as I did in the last Congress, I am cosponsoring the legislation introduced today by the Senator from Connecticut to provide a House seat for the District of Columbia and an additional…

Kay Bailey Hutchison
Sen. Kay Bailey HutchisonR-TX · Jan 6, 2009

Mr. President, I am pleased to introduce a bill to permanently correct an injustice in the tax code that has harmed citizens in many States of this great Nation. State and local governments have…

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Sam Brownback
Sen. Sam BrownbackR-KS · Sep 29, 2010

Mr. President, it gives me great pleasure to join with my colleagues today and honor a native Kansan who, 52 years ago, committed an act of courage that was the basis for inspiring many civil rights…

K. Michael Conaway
Rep. K. Michael ConawayR-TX-11 · Jul 31, 2009

Madam Speaker, at the request of the Secretary of State of the State of Texas, I am officially entering Senate Concurrent Resolution 73, as passed by the 81st Legislature, Regular Session, 2009 of…

Harry Reid
Sen. Harry ReidD-NV · Jan 6, 2009

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

Bill Text

Latest available legislative text

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Introduced in SenateIssued January 6, 2009
        [Congressional Bills 111th Congress]
[From the U.S. Government Printing Office]
[S. 73 Introduced in Senate (IS)]

111th CONGRESS
1st Session
S. 73

To establish a systematic mortgage modification program at the Federal
Deposit Insurance Corporation, and for other purposes.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

January 6, 2009

Mrs. Feinstein introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

A BILL

To establish a systematic mortgage modification program at the Federal
Deposit Insurance Corporation, 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. SHORT TITLE.

This Act may be cited as the ``Systematic Foreclosure Prevention
and Mortgage Modification Act''.

SEC. 2. SYSTEMATIC FORECLOSURE PREVENTION AND MORTGAGE MODIFICATION
PLAN ESTABLISHED.

(a) In General.--The Chairperson of the Federal Deposit Insurance
Corporation shall establish a systematic foreclosure prevention and
mortgage modification program by--
(1) paying servicers $1,000 to cover expenses for each loan
modified according to the required standards; and
(2) sharing up to 50 percent of any losses incurred if a
modified loan should subsequently re-default.
(b) Program Components.--The program established under subsection
(a) shall include the following components:
(1) Eligible borrowers.--The program shall be limited to
loans secured by owner-occupied properties.
(2) Exclusion for early payment default.--To promote
sustainable mortgages, government loss sharing shall be
available only after the borrower has made a minimum of 6
payments on the modified mortgage.
(3) Standard net present value test.--In order to promote
consistency and simplicity in implementation and audit, a
standard test comparing the expected net present value of
modifying past due loans compared to the net present value of
foreclosing on them will be applied. Under this test, standard
assumptions shall be used to ensure that a consistent standard
for affordability is provided based on a 31 percent borrower
mortgage debt-to-income ratio.
(4) Systematic loan review by participating servicers.--
Participating servicers shall be required to undertake a
systematic review of all of the loans under their management,
to subject each loan to a standard net present value test to
determine whether it is a suitable candidate for modification,
and to modify all loans that pass this test. The penalty for
failing to undertake such a systematic review and to carry out
modifications where they are justified would be
disqualification from further participation in the program
until such a systematic program was introduced.
(5) Modifications.--Modifications may include any of the
following:
(A) Reduction in interest rates and fees.
(B) Forbearance of principal.
(C) Extension of the term to maturity.
(D) Other similar modifications.
(6) Reduced loss share percentage for ``underwater
loans''.--For loan-to-value ratios above 100 percent, the
government loss share shall be progressively reduced from 50
percent to 20 percent as the current loan-to-value ratio rises,
except that loss sharing shall not be available if the loan-to-
value ratio of the first lien exceeds 150 percent.
(7) Simplified loss share calculation.--In order to ensure
the administrative efficiency of this program, the calculation
of loss share basis would be as simple as possible. In general
terms, the calculation shall be based on the difference between
the net present value, as defined by the Chairperson of the
Federal Deposit Insurance Corporation, of the modified loan and
the amount of recoveries obtained in a disposition by
refinancing, short sale, or real estate owned sale, net of
disposal costs as estimated according to industry standards.
Interim modifications shall be allowed.
(8) De minimis test.--To lower administrative costs, a de
minimis test shall be used to exclude from loss sharing any
modification that does not lower the monthly payment at least
10 percent.
(9) 8-year limit on loss sharing payment.--The loss sharing
guarantee shall terminate at the end of the 8-year period
beginning on the date the modification was consummated.
(c) Regulations.--The Corporation shall prescribe such regulations
as may be necessary to implement this Act and prevent evasions thereof.
(d) Troubled Assets.--The costs incurred by the Federal Government
in carrying out the loan modification program established under this
section shall be covered out of the funds made available to the
Secretary of the Treasury under section 118 of the Emergency Economic
Stabilization Act of 2008.
(e) Modifications to Program.--The Chairperson of the Federal
Deposit Insurance Corporation may make any modification to the program
established under subsection (a) that the Chairperson determines are
appropriate for the purpose of maximizing the number of foreclosures
prevented.
(f) Report.--Before the end of the 6-month period beginning on the
date of the enactment of this Act, the Chairperson of the Federal
Deposit Insurance Corporation shall submit a progress report to the
Congress containing such findings and such recommendations for
legislative or administrative action as the Chairperson may determine
to be appropriate.
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