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1.2.10 The Helping Families Save Their Homes Act of 2009

The Helping Families Save Their Homes Act of 2009 amended the Truth in Lending Act in two ways. First, it added a requirement that borrowers be notified whenever ownership of their mortgage loan is transferred.109 The new owner or assignee must notify the borrower in writing, within thirty days after the loan is sold or assigned, of its identity, address, telephone number, and the date of transfer and location where the transfer is recorded. In addition, the new owner must disclose how the borrower may reach an agent or party with authority to act on behalf of the new owner, and any other relevant information. The law became effective upon enactment, May 20, 2009. An interim final rule was issued by the FRB on November 20, 2009, with mandatory compliance on January 19, 2010.110 Final rules were published in the Federal Register on September 24, 2010, with mandatory compliance beginning on January 1, 2011.111 These requirements are discussed further at Chapter 5, Chapter 10, and Chapter 11, infra.

Second, it established a safe harbor in TILA for servicers providing “qualified” loss mitigation on loans originated before the law’s effective date, May 20, 2009—specifically including loans that had been securitized.112 Under the safe harbor, any duty on the part of the servicer to maximize the return for the investor applies equally to all investors. That is, if the return for loss mitigation is greater than foreclosure, then the question of which particular investors benefit or lose is no longer part of the duty analysis and the servicer providing loss mitigation is presumed to have met its obligation. Moreover, the statute specifically provides that a servicer acting in the interests of all investors according to these provisions will not be liable to any particular investor to whom the servicer owes a duty, and will not be subject to any injunction, stay, or other equitable relief (although it explicitly carves out of this safe harbor any liability for fraud or other state or federal law violations, including those relating to predatory lending). The statute extends that safe harbor to other actors—any trustee, issuer, or loan originator cooperating with a servicer. A “qualified” loss mitigation plan is defined as one where:

  • • Default has occurred, is imminent or is reasonably foreseeable, as defined by guidelines issued by the Secretary of the Treasury or his designee;
  • • The property is the homeowner’s principal residence; and
  • • The loss mitigation has been determined by the servicer, consistent with guidelines issued by the Treasury Secretary or his designee, to provide a greater anticipated recovery than a foreclosure.113

These standards generally aligned with the Home Affordable Modification Program (HAMP). The loss mitigation program has reached its sunset, with initial packages from homeowners due to the servicer on or before December 30, 2016.114


  • 109 {109} Pub. L. No. 111-22, § 404, 123 Stat. 1632 (May 20, 2009), codified at 15 U.S.C. § 1641(g)(1)(A)–(E).

  • 110 {110} See 74 Fed. Reg. 60,143 (Nov. 20, 2009).

  • 111 {111} 75 Fed. Reg. 58,489 (Sept. 24, 2010).

  • 112 {112} Pub. L. No. 111-22, § 201, 123 Stat. 1632 (May 20, 2009), codified at 15 U.S.C. § 1639a. Cf. Markle v. HSBC Mortgage Corp., 844 F. Supp. 2d 172 (D. Mass. 2011) (provision that Treasury’s HAMP guidelines “shall constitute standard industry practice for purposes of all Federal and State laws” does not establish a duty of care that can be privately enforced by a borrower in a negligence action).

  • 113 {113} This value generally is known as the “net present value.”

  • 114 {114} National Consumer Law Center, Mortgage Servicing and Loan Modifications § (2019), updated at (detailed discussion of HAMP).