Congresswoman Maxine Waters (D-CA), chair of the House Committee on Financial Services, introduced legislation that would help prevent foreclosures for borrowers with Federal Housing Administration (FHA) mortgages by strengthening requirements for and increasing oversight of FHA mortgage servicers so that every homebuyer with an FHA mortgage is given a fair chance at avoiding foreclosure.
“The Federal Housing Administration is critical to our housing market and helps to promote homeownership for underserved borrowers, including first-time and minority homebuyers,” said Waters. “Unfortunately, we continue to see significant problems with the servicing of FHA loans that unnecessarily put homeowners at risk of foreclosure. That is why I have introduced the FHA Foreclosure Prevention Act of 2019, which would ensure that FHA servicers help families experiencing financial hardship avoid foreclosure so that they can remain in their homes.”
The FHA Foreclosure Prevention Act of 2019 (H.R. 3958) would require the Department of Housing and Urban Development to increase its oversight of FHA mortgage lenders in an effort to strengthen compliance with the FHA’s loss mitigation requirements.
This bill would also establish a robust complaint and appeals process to provide borrowers the ability to adequately voice their concerns about unfair treatment. Ultimately, this bill seeks to ensure that FHA borrowers have a fair opportunity to become current after defaulting on their loan.
Senator Catherine Cortez Masto (D-NV) introduced a companion measure (S. 2279) in the United States Senate.
“As Nevada’s Attorney General during the housing crisis, I held the Big Banks and mortgage companies accountable for trying to take away the homes of hardworking families in the Silver State,” said Cortez Masto. “Lenders must follow the law before foreclosing on borrowers and that includes communicating transparently and doing everything possible to avoid eviction. Yet loan servicers and mortgage companies are still not following the law when it comes to helping homeowners, which is why my legislation is so important. This bill ensures that lenders put consumers first and take every step possible to keep struggling homeowners in Nevada and across the country in their homes.”
Both measures are supported by the National Housing Law Project (NHLP) and the National Consumer Law Center (NCLC) on behalf of its low-income clients.
To view a one page description of the legislation, click here.
To view the bill text, click here.
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