HF2823 Summary: Supporting Responsible Homeowners and Stabilizing Neighborhoods Act

• State-chartered banks must offer refinancing at lower interest rates to customers with underwater mortgages (loan-to-value ratio exceeding 100%) originated before January 1, 2009, with current interest rates of 5.25% or higher, and current on payments; offer must be made within 60 days and remain available for 60 days.

• Banks must provide written transparency regarding loan modification eligibility criteria at least annually and within 30 days of any changes; loan modification denials require written notice within 5 days with explanation of how applicant failed to meet criteria.

• Lenders must respond in writing within 30 days to short sale requests, either accepting, denying, or accepting with conditions, and must state reasons; failure to respond results in 12-month redemption period and loss of deficiency judgment rights.

• Foreclosure is prohibited if a mortgagor has submitted a pending loan modification request or is current on a modified loan; mortgagors unemployed for 10+ years of homeownership qualify for 12-month foreclosure forbearance, extended to 24 months for 20+ year residents.

• New chapter 584 establishes comprehensive loan modification procedures including required affidavits of compliance before foreclosure, detailed notice requirements, mandatory telephone contact attempts, and statutory damages up to $2,000 per violation plus punitive damages for non-good-faith violations.