House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) has introduced legislation that would increase oversight of Federal Housing Administration (FHA) mortgage servicers.
The FHA Foreclosure Prevention Act of 2019 (H.R. 3958) would require the Department of Housing and Urban Development (HUD) to more closely oversee mortgage lenders to strengthen compliance with the FHA’s loss mitigation requirements.
The bill also would 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,” Waters said in a news release.
The FHA helps to promote homeownership for underserved borrowers, including first-time and minority homebuyers.
“Unfortunately, we continue to see significant problems with the servicing of FHA loans that unnecessarily put homeowners at risk of foreclosure,” Waters added.
Meanwhile, Sen. Catherine Cortez Masto (D-Nev.) has introduced a companion measure (S. 2279) in the 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,” Masto said in a news release. “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.”
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