Prompt Notification of Short Sales Act - Requires each servicer of a home mortgage to respond in writing within 75 days to a mortgagor of a residential mortgage loan who has requested in writing a short sale of the dwelling or residential real property that is subject to the mortgage, deed of trust, or other security interest securing the mortgage loan.
Authorizes an aggrieved individual to bring a civil action for damages and equitable relief for any violation of this Act.
Declares this Act inapplicable to certain residential mortgages entered into before its enactment whose mortgage agreements explicitly provide a procedure or terms for a short sale approval.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 2120 Introduced in Senate (IS)]
112th CONGRESS
2d Session
S. 2120
To require the lender or servicer of a home mortgage, upon a request by
the homeowner for a short sale, to make a prompt decision whether to
allow the sale.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 16, 2012
Ms. Murkowski (for herself, Mr. Brown of Ohio, and Mr. Brown of
Massachusetts) introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To require the lender or servicer of a home mortgage, upon a request by
the homeowner for a short sale, to make a prompt decision whether to
allow the sale.
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 ``Prompt Notification of Short Sales
Act''.
SEC. 2. PROMPT DECISION REGARDING SHORT SALE.
(a) Requirement for Prompt Decision.--
(1) In general.--
(A) Written response to mortgagor requests
required.--
(i) In general.--Each servicer shall
respond in writing to a mortgagor of a
residential mortgage loan who has submitted a
written request that meets the requirements of
paragraph (2), not later than the end of the
75-calendar day period beginning on the date of
receipt of such request, subject to
subparagraphs (B) and (C).
(ii) Applicability.--Clause (i) shall
apply, except as provided in subsection (b),
and notwithstanding any other provision of law
or of any contract, including a contract
between a servicer of a residential mortgage
loan and a securitization vehicle or other
investment vehicle.
(B) Content.--A written response by a servicer
under subparagraph (A) shall specify--
(i) a decision on whether such request has
been denied, approved, or that such request has
been approved subject to specified changes; or
(ii) that additional time is required, in
which case the servicer shall provide a new
decision date.
(C) Single extension of new decision date
authorized.--A servicer may, upon written notice to the
mortgagor, extend a new decision date provided under
subparagraph (B)(ii) one single time, for a period of
not longer than 21 additional calendar days.
(2) Mortgagor submission.--Paragraph (1) shall apply in any
case in which the mortgagor under a residential mortgage loan
submits to the servicer thereof--
(A) a written offer for a short sale of the
dwelling or residential real property that is subject
to the mortgage, deed of trust, or other security
interest that secures the mortgage loan; and
(B) all information required by the servicer in
connection with such a request (including a copy of an
executed contract between the owner of the dwelling or
property and the prospective buyer that is subject to
approval by the servicer).
(3) Civil actions authorized.--An aggrieved individual may
bring an action in a court of competent jurisdiction, asserting
a violation of this Act. Aggrieved individuals may be awarded
all appropriate relief, including equitable relief, and a
monetary award of $1,000 per violation, plus reasonable
attorneys' fees, or such higher amount as may be appropriate in
the case of an established pattern or practice of such
failures.
(b) Inapplicability to Certain Existing Mortgages.--Subsection (a)
shall not apply with respect to any residential mortgage with respect
to which the mortgagor and the mortgagee or servicer have entered into
a written agreement before the date of enactment of this Act explicitly
providing a procedure or terms for approval of a short sale.
(c) Treatment of Other Time Limits.--This section may not be
construed to preempt, annul, or otherwise affect any other provision of
law or of any contract or program that provides a shorter period than
is provided under subsection (a) for a decision by the servicer of a
residential mortgage loan regarding a short sale of the dwelling or
residential real property that is subject to the mortgage, deed or
trust, or other security interest that secures the mortgage loan.
(d) Definitions.--For purposes of this Act, the following
definitions shall apply:
(1) Residential mortgage loan.--The term ``residential
mortgage loan'' means any consumer credit transaction that is
secured by a mortgage, deed of trust, or other equivalent
consensual security interest on a dwelling or on residential
real property that includes a dwelling, other than a consumer
credit transaction under an open end credit plan or an
extension of credit relating to a plan described in section
101(53D) of title 11, United States Code.
(2) Securitization vehicle.--The term ``securitization
vehicle'' means a trust, special purpose entity, or other legal
structure that is used to facilitate the issuing of securities,
participation certificates, or similar instruments backed by or
referring to a pool of assets that includes residential
mortgage loans (or instruments that are related to residential
mortgage loans, such as credit-linked notes).
(3) Servicer.--The term ``servicer'' has the same meaning
as in section 129A, except that such term includes a person who
makes or holds a residential mortgage loan (including a pool of
residential mortgage loans), if such person also services the
loan.
(4) Short sale.--The term ``short sale'' means the sale of
the dwelling or residential real property that is subject to
the mortgage, deed or trust, or other security interest that
secures a residential mortgage loan that--
(A) will result in proceeds in an amount that is
less than the remaining amount due under the mortgage
loan; and
(B) requires authorization by the securitization
vehicle or other investment vehicle or holder of the
mortgage loan, or the servicer acting on behalf of such
a vehicle or holder.
<all>
Introduced in Senate
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
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