H. R. 1842
IN THE HOUSE OF REPRESENTATIVES
May 7, 2013
Mr. Cummings (for himself, Mr. Michaud, Mr. Smith of Washington, Mrs. Davis of California, Mr. Takano, and Mr. Tierney) introduced the following bill; which was referred to the Committee on Veterans’ Affairs
To amend the Servicemembers Civil Relief Act to improve the protections for servicemembers, surviving spouses, and disabled veterans against mortgage foreclosures, and for other purposes.
This Act may be cited as the
Military Family Home Protection
Mortgage protection for members of the Armed Forces, surviving spouses, and certain veterans
Members of the Armed Forces, surviving spouses, and certain disabled veterans
Title III of the Servicemembers Civil Relief Act (50 U.S.C. App. 501 et seq.) is amended by inserting after section 303 the following new section:
Mortgages and trust deeds of certain servicemembers, surviving spouses, and disabled veterans
Mortgage as Security
This section applies only to an obligation on real or personal property owned by a covered individual that—
originated at any time and for which the covered individual is still obligated; and
is secured by a mortgage, trust deed, or other security in the nature of a mortgage.
Stay of Proceedings
In accordance with subsection (d)(1), in a judicial action pending or in a nonjudicial action commenced during a covered time period to enforce an obligation described in subsection (a), a court—
may, after a hearing and on its own motion, stay the proceedings until the end of the covered time period; and
shall, upon application by a covered individual, stay the proceedings until the end of the covered time period.
Obligation to stop proceedings
Upon receipt of notice provided under subsection (d)(1), a mortgagee, trustee, or other creditor seeking to foreclose on real property secured by an obligation covered by this section using any judicial or nonjudicial proceedings shall immediately stop any such proceeding until the end of the covered time period.
Sale or Foreclosure
A sale, judicial or nonjudicial foreclosure, or seizure of property for a breach of an obligation described in subsection (a) that is not stayed under subsection (b) shall not be valid during a covered time period except—
upon a court order granted before such sale, judicial or nonjudicial foreclosure, or seizure with a return made and approved by the court; or
if made pursuant to an agreement as provided in section 107.
To be covered under this section, a covered individual shall provide to the mortgagee, trustee, or other creditor written notice that such individual is so covered.
Written notice under paragraph (1) may be provided electronically.
Notice provided under paragraph (1) shall be provided during the covered time period.
With respect to a servicemember described in subsection (g)(1)(A), notice shall include—
a copy of the servicemember’s official military orders, or any notification, certification, or verification from a servicemember's commanding officer that provides evidence of servicemember's eligibility for special pay as described in subsection (g)(1)(A); or
an official notice using a form designed under paragraph (5).
The Secretary of Defense shall design and distribute an official Department of Defense form that can be used by an individual to give notice under paragraph (1).
Use of official form not required
Failure by any individual to use a form designed or distributed under subparagraph (A) to provide notice shall not make such provision of notice invalid.
The aggregate duration for which a covered individual (except a servicemember described in subsection (g)(1)(A)) may be covered under this section is one year.
A person who knowingly makes or causes to be made a sale, foreclosure, or seizure of property that is prohibited by subsection (c), or who knowingly attempts to do so, shall be fined as provided in title 18, United States Code, or imprisoned for not more than one year, or both.
In this section:
The term covered individual means the following individuals:
A servicemember who is or was eligible for hostile fire or imminent danger special pay under section 310 of title 37, United States Code, during a period of military service.
A surviving spouse (as defined in section 101(3) of title 38, United States Code, and in accordance with section 103 of such title) of a servicemember who died while in military service if such spouse is the successor in interest to property covered under subsection (a).
Covered time period
The term covered time period means the following time periods:
With respect to a servicemember who is or was eligible for hostile fire or imminent danger special pay under section 310 of title 37, United States Code, during a period of military service, during the period beginning on the first day on which the servicemember is or was eligible for such special pay during such period of military service and ending on the date that is one year after the last day of such period of military service.
With respect to a servicemember described in paragraph (1)(B), during the one-year period beginning on the date on which the servicemember is placed on convalescent status or transferred to the temporary disability retired list under section 1202 or 1205 of title 10, United States Code.
With respect to a veteran described in paragraph (1)(C), during the one-year period beginning on the date of the retirement of such veteran.
With respect to a surviving spouse of a servicemember as described in paragraph (1)(D), during the one-year period beginning on the date on which the spouse receives notice of the death of the servicemember.
The table of contents in section 1(b) of such Act is amended by inserting after the item relating to section 303 the following new item:
Sec. 303A. Mortgages and trust deeds of certain servicemembers, surviving spouses, and disabled veterans.
Section 107 of the Servicemembers Civil Relief Act ( 50 U.S.C. App. 517 ) is amended by adding at the end the following:
For purposes of this section, the term servicemember includes any covered individual under section 303A.
Increased civil penalties for mortgage violations
Paragraph (3) of section 801(b) of the Servicemembers Civil Relief Act ( 50 U.S.C. App. 597(b)(3) ) is amended to read as follows:
to vindicate the public interest, assess a civil penalty—
with respect to a violation of section 207, 303, or 303A regarding real property—
in an amount not exceeding $110,000 for a first violation; and
in an amount not exceeding $220,000 for any subsequent violation; and
with respect to any other violation of this Act—
in an amount not exceeding $55,000 for a first violation; and
in an amount not exceeding $110,000 for any subsequent violation.
Section 108 of such Act ( 50 U.S.C. App. 518 ) is amended—
Application by and inserting
receipt.—Application by; and
by adding at the end the following new subsection:
In addition to the protections under subsection (a), an individual who is entitled to any right or protection provided under this Act may not be denied or refused credit or be subject to any other action described under paragraphs (1) through (6) of subsection (a) solely by reason of such entitlement.
Section 303A of the Servicemembers Civil Relief Act, as added by subsection (a), and the amendments made by this section, shall take effect on the date that is 90 days after the date of the enactment of this Act.
Treatment of relocation for active duty for purposes of mortgage refinancing
Title III of the Servicemembers Civil Relief Act (50 U.S.C. App. 531 et seq.) is amended by inserting after section 303A, as added by section 1(a)(1), the following new section:
Treatment of relocation for active duty for purposes of mortgage refinancing
Treatment of absence from residence due to active duty
Subject to paragraph (2), if, at any time that a servicemember who is the mortgagor under an existing mortgage does not reside in the residence that secures the existing mortgage because of relocation described in subsection (c)(1)(B), such servicemember inquires about or applies for a covered refinancing mortgage, such servicemember shall be, for all purposes relating to the covered refinancing mortgage, including such inquiry or application and eligibility for and compliance with any underwriting criteria and standards regarding such covered refinancing mortgage, considered to occupy the residence that secures the existing mortgage to be paid or prepaid by such covered refinancing mortgage as the principal residence of the servicemember during the period of any such relocation.
Paragraph (1) shall not apply with respect to a servicemember at any time if, during the five-year period preceding such time, the servicemember entered into a covered refinancing mortgage pursuant to this section.
Mortgages originated before period military service
If a covered refinancing mortgage is entered into pursuant to this section with respect to an existing mortgage that originated before the period of the servicemember's military service, such covered refinancing mortgage shall be deemed to be an obligation that originated before the period of the servicemember's military service and for which the servicemember is still obligated for purposes of section 303(a)(1).
In this section:
The term existing mortgage means a mortgage that is secured by a 1- to 4-family residence, including a condominium or a share in a cooperative ownership housing association, that was the principal residence of a servicemember for a period that—
had a duration of 13 consecutive months or longer; and
ended upon the relocation of the servicemember caused by the servicemember receiving military orders for a permanent change of station or to deploy with a military unit, or as an individual in support of a military operation, for a period of not less than 90 days that did not allow the servicemember to continue to occupy such residence as a principal residence.
Covered refinancing mortgage
The term covered refinancing mortgage means any mortgage—
that is made for the purpose of paying or prepaying, and extinguishing, the outstanding obligations under an existing mortgage or mortgages; and
that is secured by the same residence that secured such existing mortgage or mortgages.
The table of contents for such Act is amended by inserting after the item relating to section 303A the following new item:
Sec. 303B. Treatment of relocation for active duty for purposes of mortgage refinancing.
Requirements for lending institutions that are creditors for obligations and liabilities covered by the Servicemembers Civil Relief Act
Section 207 of the Servicemembers Civil Relief Act ( 50 U.S.C. App. 527 ) is amended—
by redesignating subsections (d) and (e) as subsections (e) and (f), respectively; and
by inserting after subsection (c) the following new subsection (d):
Lending institution requirements
Each lending institution subject to the requirements of this section shall designate an employee of the institution as a compliance officer who is responsible for ensuring the institution’s compliance with this section and for distributing information to servicemembers whose obligations and liabilities are covered by this section.
Toll-free telephone number
During any fiscal year, a lending institution subject to the requirements of this section that had annual assets for the preceding fiscal year of $10,000,000,000 or more shall maintain a toll-free telephone number and shall make such telephone number available on the primary Internet website of the institution.