Text of Senate Amendment 4364

Text of Senate Amendment 4364

Congressional Record, Volume 172 Issue 42 (Thursday, March 5, 2026) [Congressional Record Volume 172, Number 42 (Thursday, March 5, 2026)] [Senate] [Pages S899-S902] From the Congressional Record Online through the Government Publishing Office [ www.gpo.gov ] SA 4364. Mr. REED submitted an amendment intended to be proposed by him to the bill H.R. 6644, a bill to increase the supply of housing in America, and for other purposes; which was ordered to lie on the table; as follows: At the appropriate place, insert the following: SEC. ___. PRESERVING HOMES AND COMMUNITIES. (a) Sale of FHA Non-performing Single Family Mortgage Loans.-- (1) In general.--Title II of the National Housing Act (12 U.S.C. 1707 et seq.) is amended by adding at the end the following: ``SEC. 259. SALE OF NON-PERFORMING SINGLE FAMILY MORTGAGE LOANS. ``(a) Single Family Sales.--The Secretary may conduct sales of 1 or more single family non-performing residential mortgage loans insured under this title only if the following requirements are met: ``(1) The Secretary determines that no other reasonable measures other than a sale are available to restore the Fund to, or keep the Fund above, the minimum capital requirements under section 205(f)(4). ``(2) The Secretary establishes a system that provides priority to Federal, State, local, or Tribal governments or nonprofit organizations that have the capacity and experience required for buying, servicing, and resolving single family mortgage loans in a manner that promotes affordable housing, fair housing, affordable homeownership, housing counseling, or neighborhood stabilization. ``(3) Applicable loss mitigation required under section 230 is exhausted before any loan is placed into the loan sale. ``(4) Clear, written notice is sent by certified and first- class mail by the servicer to the borrower of the loan, all owners of record, and any applicable estate of the borrower with a copy sent to the Secretary, not less than 90 days before the inclusion of the loan in any single family sale-- ``(A) stating that the loan will be included in a single family sale of non-performing loans; and ``(B) describing the sale process, including-- ``(i) the loss mitigation or other protections available to the borrower and other owners of record both before and after the sale; ``(ii) the status of any loss mitigation actions offered by the mortgagee with respect to the loan, including decisions on all loss mitigation reviews, descriptions of any loss mitigation options offered or denied, and supporting documentation for the most recent evaluation; and ``(iii) the obligations of the servicer of the loan before and after the sale, including loss mitigation requirements. ``(5) Purchasers take loans subject to the following requirements: [[Page S900]] ``(A) The provision of loss mitigation options to all eligible borrowers that offer terms and protections at least as favorable as those available under loss mitigation guidelines of the Federal Housing Administration, including the absence of fees for loss mitigation and loan modifications that reduce payments to an affordable level. ``(B) The provision of a deferral program that offers terms and protections at least as favorable as those provided by a partial claim available under loss mitigation guidelines of the Federal Housing Administration, including the absence of fees, to borrowers who can afford their pre-hardship mortgage payment. ``(C) Written, public disclosure of post-sale loss mitigation options. ``(D) Failure by the purchaser to follow the established loss mitigation guidelines shall serve as a defense to a judicial foreclosure and a basis to enjoin or otherwise stay a non-judicial foreclosure. ``(E) Data reporting as provided under subsection (d)(1). ``(F) Maintenance of vacant and abandoned property, including the payment of local property taxes, until such time as title is transferred to a nonprofit organization or the property is sold to a bona fide third-party purchaser. ``(G) Where a property becomes vacant, the purchaser shall not release the lien until the property is sold or donated. ``(H) Use of contract for deed, lease to own, or a land installment contract to sell or otherwise transfer any property that is secured by a purchased loan shall be prohibited unless the tenant or purchaser is a nonprofit organization. ``(I) For all non-performing loans where a home retention loss mitigation option is not possible and the purchaser acquires the property through foreclosure sale, 75 percent of those properties shall be-- ``(i) sold at the current fair market value to an owner occupant; ``(ii) sold or donated to a non-profit or local government entity that will commit to 1 of the outcomes described in clause (i) or (iii); ``(iii) for not less than the 10-year period beginning on the date on which any entity initially leases the property, and with respect to any new lease beginning within such 10- year period, leased to a tenant with income that is not more than 100 percent of the area median income at the time the tenant initially leases the property, with monthly rents that are not more than 30 percent of the monthly household income, provided that the property owner accepts as rental payment any legal source of income, including-- ``(I) a housing voucher under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) and any form of Federal, State, or local housing assistance provided to a person or family or provided to a housing owner on behalf of a person or family, including-- ``(aa) rental vouchers; ``(bb) rental assistance; ``(cc) rental subsidies from nongovernmental organizations; and ``(dd) homeownership subsidies; ``(II) income received as a monthly benefit under title II of the Social Security Act (42 U.S.C. 401 et seq.), as a supplemental security income benefit under title XVI of the Social Security Act (42 U.S.C. 1381 et seq.), or as a benefit under the Railroad Retirement Act of 1974 (45 U.S.C. 231 et seq.), including any such benefit to which the individual is entitled for which payment is made to a representative payee; ``(III) income received by court order, including spousal support and child support; ``(IV) any payment from a trust, guardian, conservator, cosigner, or relative; and ``(V) any other lawful source of income or funds, including savings accounts and investments; or ``(iv) for any property that is not habitable, demolished or donated to a land bank with a cash donation to cover demolition costs. ``(b) Direct Loan Sales.--The Secretary may permit direct loan sales of single family non-performing residential loans insured under this title only if-- ``(1) the loans are sold to municipalities, land banks, or nonprofit organizations that work in affordable housing, housing counseling, or neighborhood stabilization; ``(2) the purchaser complies with the requirements under paragraph (5) of subsection (a); and ``(3) the pricing reasonably reflects the costs of complying with the requirements under paragraphs (3) through (5) of subsection (a). ``(c) Forbearance.--The Secretary may not sell-- ``(1) a single family non-performing residential loan insured under this Title while the loan is in a forbearance plan. ``(2) a single family non-performing residential loan insured under this title that is not more than 90 days from the end of a forbearance plan. ``(d) Data and Reporting.-- ``(1) Purchaser reporting.--During the 4-year period following any single family sale of non-performing residential single family mortgage loans under subsection (a) or (b), the Secretary shall require each purchaser of such a loan, including any subsequent purchaser of the loan, to provide to the Secretary quarterly loan-level data regarding the treatment and outcome of the loan, including-- ``(A) loan characteristics, including loan type, remaining loan term, loan to value ratio, number of months in arrears, loss mitigation status, and foreclosure status at time of sale; ``(B) loss mitigation data, including whether loss mitigation was provided by the purchaser, debt-to-income ratio and percent payment reduction for any modified loans, foreclosures begun or completed, and performance of modified loans; ``(C) demographic data for the borrower and any co- borrower, including race, national origin, sex, ZIP Code, and census tract, and, if available, disability status and veteran status; and ``(D) other purchaser actions, including charge offs and resales of loans and dates for such actions. ``(2) Semiannual reports to congress.--The Secretary shall submit to Congress, and make publicly available at no cost to the public in a format that is readily accessible on the website of the Department of Housing and Urban Development, semi-annual reports to Congress on-- ``(A) loans sold in a single family sale under subsection (a), disaggregated by pool, including-- ``(i) the number of loans and types of loans; ``(ii) mean and median delinquency and loan to value ratios at the time of the sale; ``(iii) the number and percentage of owner-occupied properties; ``(iv) the number and percentage of loans modified prior to the sale; ``(v) the number and percentage of loans in foreclosure proceedings at the time of the sale; and ``(vi) demographic and geographic data, including property locations by census tract or larger geographic location if necessary to protect personally identifiable information; ``(B) the performance of loans after a single family sale under subsection (a), disaggregated by loan pool, including the initial purchaser, current owner, current servicer, data summarizing any alternatives to foreclosure offered and enacted, and data summarizing the data collected under paragraph (1); ``(C) the results of a fair lending analysis conducted based on the data in paragraph (1) to identify any discriminatory impacts or outcomes associated with the sales; and ``(D) claims paid through the Claims Without Conveyance of Title program under section 204(a)(