S.Amdt. 4364

The purpose of this amendment is to establish strict rules and protections for the sale of single family mortgage loans—specifically non-performing and re-performing loans—by the FHA, Fannie Mae, and Freddie Mac. It aims to preserve homes and communities by prioritizing the sale of these loans to entities that promote affordable housing and by ensuring borrowers have access to loss mitigation and fair treatment.

Key Changes and Additions

Protections for FHA, Fannie Mae, and Freddie Mac Loan Sales

• Priority Buyers: The Secretary and enterprises must prioritize selling loans to nonprofit organizations and Federal, State, local, or Tribal governments that have experience in promoting affordable housing, fair housing, and neighborhood stabilization.
• Borrower Notification: Borrowers must receive clear, written notice via certified and first-class mail at least 90 days before their loan is included in a sale.
• Loss Mitigation: Loan sales cannot happen while a loan is in a forbearance plan or within 90 days of a plan ending. Purchasers must offer loss mitigation options and deferral programs that are at least as favorable as those provided by the FHA or the enterprises.
• Post-Foreclosure Use: For non-performing loans where home retention is not possible, 75 percent of foreclosed properties must be sold to owner-occupants at fair market value, donated to nonprofits/governments, leased to tenants earning no more than 100 percent of the area median income, or demolished if uninhabitable.

Claims Without Conveyance of Title First Look Program

• Exclusive Access: This program creates an exclusive right for eligible buyers (homebuyers using the property as a principal residence, qualified nonprofits, and government agencies) to purchase foreclosed properties at or below fair market value for a set period.
• Allowable Uses: Properties must be used for owner-occupancy (income not more than 120 percent of area median), community land trusts, affordable rentals, or strategic demolition.

Accountability and Enforcement

• Data Reporting: Purchasers must provide quarterly data on loan outcomes and demographics to the government.
• Public Transparency: Semiannual reports must be submitted to Congress and made available to the public online, including fair lending analyses to identify discriminatory outcomes.
• Penalties: The government may forcibly retain loans or properties without compensation from purchasers who fail to comply with the requirements, and may issue monetary penalties or ban repeat offenders from future sales.