S. 2901, The Encouraging Mortgage Modifications Act of 2008

• This item is from the 110th Congress (2007-2008) and is no longer current. Comments, voting, and wiki editing have been disabled, and the cost/savings estimate has been frozen.

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S. 2901 would encourage residential mortgage loan modifications and workout plans.

Detailed Summary

Encouraging Mortgage Modifications Act of 2008 - Amends the Real Estate Settlement Procedures Act of 1974 to set forth duties of mortgage servicers regarding certain loan modifications or workout plans that affect pooled qualified residential mortgages.

Specifies among such duties the duty to: (1) determine if the net present value of the payments on the modified loan is likely to be greater than the anticipated net recovery that would result from foreclosure to all investors and parties having a direct or indirect interest in the pooled loans or securitization vehicle; and (2) act in the best interests of all such investors and parties, if the servicer agrees to or implements a qualified loan modification or workout plan for a qualified residential mortgage, or takes other reasonable loss mitigation actions, including accepting partial payments or short sale of the property, if such efforts are unsuccessful or infeasible.

Shields from liability a servicer who enters into a qualified loan modification or workout plan if the servicer acts in a manner consistent with such duties.

Status of the Legislation

Latest Major Action: 4/23/2008: Referred to Senate committee. Status: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Points in Favor

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Points Against

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