12 U.S.C. § 1701x–2 — Legal assistance for foreclosure-related issues

(a) Establishment. The Secretary of Housing and Urban Development (“Secretary”) must establish a grant program providing the full range of foreclosure-related legal assistance to low- and moderate-income homeowners and tenants. The assistance must relate to preserving homeownership, preventing home foreclosure, and tenancy connected with a foreclosure.

(b) Competitive allocation. The Secretary must distribute available grant money to State^* and local legal organizations through a competitive process. “State and local legal organizations” means State and local organizations whose main business or mission is providing legal assistance.

(c) Priority to certain areas. When distributing money under subsection (b), the Secretary must give priority to organizations operating in the 125 metropolitan statistical areas with the highest home-foreclosure rates. The Director^* of the Office of Management and Budget defines “metropolitan statistical area.”

(d) Legal assistance

(1) In general. A recipient may use the money only to assist (A) homeowners of owner-occupied homes whose mortgages are in default, at risk of default, or subject to or at risk of foreclosure; and (B) tenants at risk of eviction or subject to eviction because the property where they live is being foreclosed.

(2) Commence use within 90 days. A recipient must begin using assistance within 90 days after receiving it.

(3) Prohibition on class actions. Money provided under this section may not support class-action litigation.

(4) Limitation on legal assistance. Assistance paid for under this section is limited to mortgage-related default, eviction, or foreclosure proceedings, whether the foreclosure is judicial or nonjudicial.

(5) Effective date. Despite any other provision of this Act, this subsection took effect July 21, 2010.

(e) Limitation on distribution of assistance

(1) In general. No money under this section may be distributed to (A) an organization convicted under federal law of violating a law relating to an election for federal office; or (B) an organization that employs an “applicable individual.”

(2) Definition of applicable individuals. “Applicable individual” means a person^* who (A) is (i) permanently or temporarily employed by the organization, (ii) contracted or retained by it, or (iii) acting for it or with its express or apparent authority; and (B) has been convicted under federal law of violating a law relating to an election for federal office.

(f) Authorization of appropriations. Congress may appropriate $35,000,000 to the Secretary for each of fiscal years 2011 through 2012 for grants under this section.