Congressional Delegation Legislation Update
Bills From The Hill That Matter To Nevadans
Compiled by Jessica Santina
S.2698 – FHA Foreclosure Prevention Act of 2018
Sponsor: Sen. Catherine Cortez Masto (D-NV)
Co-Sponsor: Sen. Elizabeth Warren (D-MA)
Related Bill: H.R.5555
House Sponsor: Rep. Maxine Waters (D-CA)
Synopsis: A bill to make necessary reforms to improve compliance with loss mitigation requirements by servicers of mortgages for single-family housing insured by the FHA, and for other purposes. Legislation would:
- Prohibit the Secretary of HUD from paying FHA insurance benefits to any lender unless it has provided documentation on its compliance with loss-mitigation requirements.
- Require the Secretary of HUD to conduct oversight of servicers, which must include appropriate sampling and review of such compliance and direct information collection from borrowers whose files were sampled.
- Establish a robust complaint and appeals process for borrowers who believe they have been subject to unfair treatment related to noncompliance with FHA’s servicing requirement, including its loss-mitigation requirements. The Secretary of HUD will be required to report annually to Congress regarding the types and volume of complaints received through this process.
- Require a servicer to provide borrowers with notification of the results of the servicer’s loss-mitigation review before initiating foreclosure proceedings.
The notice must include several components to help the borrower understand their rights, and their ability to file a complaint.
Actions: On 4/18/2018, read twice and referred to the Committee on Banking, Housing, and Urban Affairs.Sponsor Comments: “As Nevada’s attorney general during the foreclosure crisis, I have seen far too many lives turned upside down due to rampant foreclosures, as well as the devastating effects that come with losing one’s home,” said Cortez Masto. “To this day, borrowers are unnecessarily being put at risk of losing their homes because of servicers’ failures to comply with the FHA’s loss-mitigation requirements. This bill will implement common-sense measures to give borrowers a fair chance at avoiding foreclosure.” “A decade after the devastating foreclosure crisis, we continue to see significant problems with the servicing of FHA loans that unnecessarily put homeowners at risk of foreclosure,” said Waters, who is Ranking Member of the Housing Committee on Financial Services Waters. “This is why my bill, the FHA Foreclosure Prevention Act, would ensure that FHA servicers help families experiencing financial hardship avoid foreclosure so that they can remain in their homes.”
Jessica’s Take: According to an April 2018 article in Forbes, a HUD inspector report found that FHA insured $1.9 billion in home loans in 2016 to 9,507 delinquent borrowers. And the National Deliquency Survey, a quarterly measure of mortgage performance from the Mortgage Bankers Association, found that mortgage delinquencies increased year over year and quarter over quarter in fourth quarter of 2017, with FHA loans being hit the hardest. With FHA loan delinquencies and foreclosure starts on the rise, and with so many of them being offered to folks with poor credit or even delinquencies on their records, it’s clear that folks need to be given all the opportunities they can to make payments and prevent foreclosures. Especially because research from the Urban Institute suggests that the FHA seems to have trouble measuring a borrower’s ability to pay in the first place. Under this bill, the Department of Housing and Urban Development would be required to increase their oversight of FHA mortgage lenders to strengthen compliance with the Federal Housing Administration’s (FHA’s) loss-mitigation requirements. The FHA must communicate with the borrower, connect the borrower to homeownership counseling, offer pre-foreclosure sales and meet other loss mitigation requirements. These laws protect borrowers from unnecessary foreclosures and taxpayers from costly and unnecessary insurance payouts. Organizations including the National Consumer Law Center and the National Housing Law Project have already voiced support for the bill, and so have conservatives such as Paul Ryan, meaning that passage of the bill appears promising.
H.R.5463 – Creating Tech Startup Jobs Act
Sponsor: Rep. Jacky Rosen (D-NV)
Synopsis: A bill to amend the current IRS tax code to allow a credit against income tax for equity investments in research intensive small business concerns, to provide for the proper tax treatment of personal service income earned in pass-through entities, and for other purposes.
Action: On 4/10/2018, introduced in house, the referred to the House Committee on Ways and Means.
Sponsor Comments: “My new legislation will help create jobs at small business tech startups that invest heavily in research and development, which are increasingly calling Nevada home,” said Rosen. “I’m determined to put forward and support policies like this that will strengthen our small business community and diversify Nevada’s economy.”
Jessica’s Take: This bill is intended to incentivize hiring for research and development at tech startups through new tax credits and to promote angel investing by providing tax credits for investments in research-heavy businesses that are less than 10 years old and have fewer than 100 employees. Rosen, a former computer programmer, is well known for her pro-innovation and pro-small business stance in developing legislation. She earned the U.S. Chamber’s Spirit of Enterprise Award, given annually to Congress members based on their votes on critical business legislation. It is widely understood that there is a dearth of R&D funding in the U.S. The Brookings Institute reported in 2015 that while the U.S. was once a world leader in R&D, at the time of the study it had fallen to 2.8 percent of the gross domestic product — 10th among OECD countries. It’s only dropped further since the Trump Administration took office, according to the American Chemical Society; it has since dropped to 0.9 percent of the GDP, while the ACS suggests this number should be more like 4 percent. In addition to the Fiscal 2018 law that increases federal funding to the National Institutes of Health and other agencies — an encouraging effort, to be sure — this bill would make it more appetizing for the private sector to invest in R&D. Inherent in this issue is an entanglement between science and politics, which of late seems to have led to less funding for scientific development. The fact that this bill puts the onus on the private sector should lead to its popularity from both sides of the aisle.