[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1940 Introduced in House (IH)]
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115th CONGRESS
1st Session
H. R. 1940
To allow homeowners of moderate-value homes who are subject to mortgage
foreclosure proceedings to remain in their homes as renters.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 5, 2017
Mr. Grijalva (for himself, Mr. Carson of Indiana, Ms. Clarke of New
York, Mr. Conyers, Mr. Evans, Mr. Al Green of Texas, Ms. Jackson Lee,
Ms. Kaptur, Ms. Lee, Mrs. Napolitano, Ms. Norton, and Mr. Raskin)
introduced the following bill; which was referred to the Committee on
Financial Services
_______________________________________________________________________
A BILL
To allow homeowners of moderate-value homes who are subject to mortgage
foreclosure proceedings to remain in their homes as renters.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Right to Rent Act of 2017''.
SEC. 2. RIGHT TO RENT HOME SUBJECT TO FORECLOSURE.
(a) Exercise of Right.--If, at any time after notice under
subsection (b) for an eligible mortgage is provided to the eligible
mortgagor and before the commencement of the 7-day period that ends on
the first date that the foreclosing creditor may first commence or
execute such foreclosure pursuant to such notice, the eligible
mortgagor under the eligible mortgage that is subject to such
foreclosure provides notice in accordance with section 3,
notwithstanding such foreclosure or any other interests in the
property, the eligible mortgagor may, at the sole option of the
eligible mortgagor, continue to occupy the foreclosed property during
the 5-year period that begins upon the commencement of such occupancy,
subject to the requirements of subsection (c).
(b) Limitation on Timing of Foreclosure; Notice of Default and
Right To Rent.--Notwithstanding any other provision of law or any
contract, a foreclosure of an eligible mortgage may not be commenced or
executed before the expiration of the 25-day period (not including
Saturdays, Sundays, and legal public holidays) beginning upon the
receipt, by the eligible mortgagor, of written notice provided by the
foreclosing creditor for the mortgage that--
(1) clearly states that--
(A) the eligible mortgagor is in default on the
mortgage; and
(B) foreclosure on the mortgage may or will be
commenced on account of such default;
(2) clearly states that the eligible mortgagor has the
right, notwithstanding foreclosure, to continue to occupy the
foreclosed property in accordance with this Act, and sets forth
the terms of such occupancy under subsections (a) and (c); and
(3) clearly identifies the first date, pursuant to this
section and any other provisions of law and contract, that such
foreclosure may be commenced.
(c) Terms of Periodic Tenancy.--Occupancy, by an eligible
mortgagor, of a foreclosed property pursuant to subsection (a) shall be
under a periodic month-to-month tenancy under which the owner of the
property may terminate the tenancy for material breach but shall have
no authority, at will, to terminate the tenancy during the occupancy
pursuant to subsection (a) if the mortgagor--
(1) timely pays to the owner of the foreclosed property
rent on a monthly basis in the amount of the fair market rent
for the property determined in accordance with section 4; and
(2) uses property as the principal residence of the
mortgagor.
SEC. 3. REQUIRED NOTICE.
With respect to an eligible mortgage for which notice under section
2(b) has been provided, notice in accordance with this section is
notice that--
(1) is made in writing;
(2) is submitted, by a means under which the act of
delivery is recorded, to--
(A) the court having jurisdiction and venue to
conduct the covered foreclosure proceeding for the
eligible mortgage or, in the case of nonjudicial
foreclosure, the court in which an action is brought
pursuant to section 5; and
(B) the foreclosing creditor; and
(3) states that the eligible mortgagor is exercising the
authority under section 2(a) to continue to occupy the
foreclosed property.
SEC. 4. DETERMINATION OF FAIR MARKET RENT.
(a) Initial Determination.--For purposes of this Act, the fair
market rent for a foreclosed property involved in a covered foreclosure
proceeding shall be the amount that is determined by the court
conducting such proceeding or hearing an action pursuant to section 5.
(b) Periodic Adjustments.--The fair market rent determined under
subsection (a) for a foreclosed property shall be adjusted annually to
reflect changes in the owners' equivalent rent of primary residence
component, for the appropriate city, region, or class of city, as
available, of the Consumer Price Index for All Urban Consumers of the
Bureau of Labor Statistics of the Department of Labor.
(c) Redetermination.--If the owner of a foreclosed property or the
eligible mortgagor under the eligible mortgage requests the court
described in subsection (a) to redetermine the fair market rent for a
foreclosed property determined pursuant to this section (as such amount
may have been adjusted pursuant to subsection (b)) and agrees to pay
any costs of such redetermination (including costs of the appraisal
involved), the court shall provide for redetermination of the fair
market rent for the foreclosed property in the manner provided under
subsection (a), except that no such redetermination shall be made
pursuant to a request under this subsection made before the expiration
of the 12-month period beginning upon the most recent redetermination
conducted at the request of the same party.
SEC. 5. NONJUDICIAL FORECLOSURE PROCEEDINGS.
In the case of any covered foreclosure proceeding that is not
conducted or administered by a court, the eligible mortgagor may bring
an action in an appropriate court of the State in which the foreclosed
property is located for a determination of fair market rent for the
foreclosed property for purposes of this Act, by filing notice in
accordance with section 3 with such court and otherwise complying with
the rules of such court.
SEC. 6. NO BAR TO FORECLOSURE.
This Act may not be construed to delay, or otherwise modify,
affect, or alter any right of a creditor under an eligible mortgage to
foreclose on the mortgage and to sell the foreclosed property in
connection with such foreclosure, except that the right of any owner of
the property to possession of the property shall be subject to the
leasehold interest established pursuant to section 2(c).
SEC. 7. RIGHT TO REINSTATEMENT.
This Act may not be construed to affect any right of any eligible
mortgagor to reinstatement of an eligible mortgage, including any right
established under contract or State law.
SEC. 8. JURISDICTION OF FEDERAL COURTS.
At the option of the eligible mortgagor, a proceeding under section
4 or 5 shall be removed to the appropriate district court of the United
States in accordance with section 1441 of title 28, United States Code.
SEC. 9. EFFECT ON STATE LAW.
(a) Foreclosure Laws.--This Act does not annul, alter, affect, or
exempt any person subject to the provisions of this Act from complying
with the laws of any State regarding foreclosure on residential
properties, except to the extent that such laws are inconsistent with
any provision of this Act, and then only to the extent of such
inconsistency.
(b) Landlord-Tenant Laws.--Nothing in this Act may be construed to
not annul, alter, affect, or exempt any such tenancy created pursuant
to section 2(c) from any applicable State or local laws regarding the
rights or responsibilities of landlords or tenants.
SEC. 10. OVERSIGHT BY HUD.
The Secretary of Housing and Urban Development shall--
(1) monitor compliance with the requirements under this
Act;
(2) make available, and provide, appropriate assistance to
eligible mortgagors in exercising their rights under this Act;
(3) conduct outreach activities appropriate to inform
eligible mortgagors of the provisions of this Act; and
(4) submit to the Congress, not less than annually, reports
describing the implementation of this Act, the extent to which
this Act is utilized by eligible mortgagors, and any issues
regarding such implementation or utilization.
SEC. 11. DEFINITIONS.
For purposes of this Act, the following definitions apply:
(1) Covered foreclosure proceeding.--The term ``covered
foreclosure proceeding'' means a foreclosure proceeding with
respect to an eligible mortgage, and includes any foreclosure
proceeding authorized under the law of the applicable State,
including judicial and non-judicial foreclosure proceedings.
(2) Eligible mortgagor.--The term ``eligible mortgagor''
means a mortgagor under an eligible mortgage.
(3) Eligible mortgage.--The term ``eligible mortgage''
means a first or subordinate mortgage--
(A) on a property that--
(i) is a single family property;
(ii) has been used as the principal
residence of the eligible mortgagor for a
period of not less than 2 years immediately
preceding the initiation of the covered
foreclosure proceeding involved; and
(iii) had a purchase price, at the time
purchased by the eligible mortgagor, that is
less than the median purchase price for
residences that are located in--
(I) the same metropolitan
statistical area; or
(II) if the property is not located
in a metropolitan statistical area or
information for the area is not
available, the same State; and
(B) that was originated on or before December 31,
2008.
For purposes of subparagraph (A)(iii), the median purchase
price of residences located within a metropolitan area or State
shall be determined according to information collected and made
available by the National Association of Realtors for such area
or State for the most recently completed month for which such
information is available.
(4) Foreclosed property.--The term ``foreclosed property''
means, with respect to a covered foreclosure proceeding, the
single family property that is subject to the eligible mortgage
being foreclosed under the proceeding.
(5) Foreclosing creditor.--The term ``foreclosing
creditor'' means, with respect to a covered foreclosure
proceeding, the creditor that is foreclosing the eligible
mortgage through such proceeding.
(6) Owner.--The term ``owner'' means, with respect to a
foreclosed property, the person who has title to the property
pursuant to the foreclosure proceeding for the property, and
any successor or assign of such person.
(7) Single family property.--The term ``single family
property'' means--
(A) a structure consisting of 1 to 4 dwelling
units;
(B) a dwelling unit in a multi-unit condominium
property together with an undivided interest in the
common areas and facilities serving the property; or
(C) a dwelling unit in a multi-unit project for
which purchase of stock or a membership interest
entitles the purchaser to permanent occupancy of that
unit.
SEC. 12. APPLICABILITY AND SUNSET.
(a) Applicability.--Subject to subsection (b), this Act shall apply
to any covered foreclosure proceeding that has not been finally
adjudicated as of the date of the enactment of this Act.
(b) Sunset.--This Act shall not apply to any foreclosure proceeding
commenced after the expiration of the 5-year period beginning on the
date of the enactment of this Act.
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