H.R. 4255 – Reading Mode

113th CONGRESS

2d Session

H. R. 4255

IN THE HOUSE OF REPRESENTATIVES

March 14, 2014

Mr. Cartwright (for himself, Mr. Horsford, Mr. Connolly, Mr. George Miller of California, Mrs. Napolitano, Mr. Grijalva, Mr. Van Hollen, Mr. Nolan, Ms. Hahn, Ms. Slaughter, Ms. Lee of California, Mr. Farr, Mr. Honda, Ms. Loretta Sanchez of California, Ms. Eshoo, Ms. Speier, Mr. Hastings of Florida, Mr. Johnson of Georgia, Mr. Tonko, Mr. Fattah, Mr. Brady of Pennsylvania, Ms. Jackson Lee, Ms. Eddie Bernice Johnson of Texas, Mr. Lynch, Ms. Bonamici, Mr. DeFazio, Mr. Cohen, Mr. Cárdenas, Ms. Kaptur, Mr. Rush, Mr. Garcia, Mr. Neal, Ms. Pingree of Maine, Mr. Ellison, Mr. Pallone, Mr. Langevin, Ms. Norton, Mr. Doyle, Ms. Chu, Mr. Thompson of California, Mr. Conyers, Ms. Clark of Massachusetts, Mr. Rangel, Ms. Wilson of Florida, Ms. Shea-Porter, Ms. Lofgren, Ms. Brown of Florida, Mr. Carson of Indiana, Ms. Velázquez, Mr. Takano, Mr. Ruppersberger, Ms. Roybal-Allard, Mr. Gene Green of Texas, Mr. Clay, and Ms. DeLauro) introduced the following bill; which was referred to the Committee on Financial Services

A BILL

To require the Federal Housing Finance Agency to establish a 6-month moratorium on foreclosure of mortgages guaranteed by Fannie Mae or Freddie Mac on homes of individuals who have lost Federal unemployment insurance as a result of the expiration of such program, and for other purposes.

Short title

This Act may be cited as the Stop Foreclosures Due to Congressional Dysfunction Act of 2014.

Mortgage foreclosure moratorium

(a)

Moratorium

The Director of the Federal Housing Finance Agency shall prohibit mortgagees of eligible mortgages under subsection (c) from initiating a foreclosure, whether judicial or nonjudicial, or taking any action in furtherance of a foreclosure already initiated, including any foreclosure sale, with respect to any eligible mortgage during the foreclosure moratorium period under subsection (d) for such eligible mortgage.

(b)

Treatment of mortgage payments due during foreclosure moratorium period

(1)

Deferral of mortgage payments; interest due

The Director shall provide that, during the foreclosure moratorium period with respect to an eligible mortgage—

(A)

the term of the mortgage shall toll;

(B)

any payments of principal and interest due under the mortgage shall be deferred; and

(C)

interest on outstanding principal due under the mortgage shall continue to accrue at the rate provided for under the mortgage.

(2)

Resumption of mortgage payments; amortization of interest accrued

The Director shall provide that, upon the expiration of the foreclosure moratorium period with respect to an eligible mortgage—

(A)

the term of the mortgage, and the responsibility of the mortgagor to make payments of principal and interest due under the mortgage, shall resume; and

(B)

any interest accrued pursuant to paragraph (1)(C) shall be amortized, and payable, over the remaining term of the mortgage.

(c)

Eligible mortgage

An eligible mortgage under this subsection is a mortgage that—

(1)

is owned, held, securitized, or guaranteed by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation;

(2)

is a mortgage on a 1- to 4-family residence that is the principal residence of the mortgagor;

(3)

was current with respect to payments of principal and interest, and any taxes, insurance, and other amounts required to be paid in escrow, that were due under the mortgage as of the beginning of the foreclosure moratorium period with respect to such eligible mortgage; and

(4)

has a mortgagor who—

(A)

(i)

received extended compensation or additional compensation for a week of unemployment ending at any time during the 7-day period ending January 1, 2014;

(ii)

has exhausted all rights to regular compensation under the unemployment compensation law of a State at any time during the period beginning January 1, 2014, and ending on the date of enactment of this Act and has remained continuously unemployed throughout such period; or

(iii)

exhausts all rights to regular compensation under the unemployment compensation law of a State at any time during the period beginning on the date of enactment of this Act and ending on July 1, 2014; and

(B)

as of the beginning of the foreclosure moratorium period with respect to such eligible mortgage, has a ratio of debt to income, as determined in accordance with such requirements as the Director shall establish, that was greater than 40 percent.

(d)

Foreclosure moratorium period

The foreclosure moratorium period under this subsection with respect to an eligible mortgage shall be the 6-month period beginning upon—

(1)

in the case of an eligible mortgage of a mortgagor described in clause (i) or (ii) of subsection (c)(4)(A), the date of the enactment of this Act; and

(2)

in the case of an eligible mortgage of a mortgagor described in clause (iii) of subsection (c)(4)(A), the date on which such mortgagor exhausts all rights to regular compensation under the unemployment compensation law of a State.

(e)

Definitions

For purposes of this section, the following definitions shall apply:

(1)

Director

The term Director means the Director of the Federal Housing Finance Agency.

(2)

Eligible mortgage

The term eligible mortgage means a mortgage that meets the requirements of subsection (c).

(3)

Foreclosure moratorium period

The term foreclosure moratorium period means, with respect to an eligible mortgage, the period specified in subsection (d) for the mortgage.

(4)

Mortgagee

The term mortgagee includes, with respect to an eligible mortgage, any creditor, servicer, or holder of such eligible mortgage, and any other person acting on behalf of any such creditor, servicer, or holder.

(5)

Regular compensation; extended compensation; additional compensation

The terms regular compensation, extended compensation, and additional compensation have the meanings given such terms in section 205 of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note).