Rep. Ed Towns (D-New York) has introduced a new bill to limit the period of time during which a bank can bring deficiency judgments against foreclosed borrowers.

Currently, the window during which a lender may pursue a deficiency judgment varies by state and can be anywhere from six months to six years.

The Fairness in Foreclosure Act (H.R. 3566) would prohibit lenders from pursuing deficiency judgments more than 12 months after foreclosure, except in states with shorter windows for deficiency judgments.

The act also aims to restrict deficiency judgments against all low-income families.

Additionally, if the amount secured through foreclosure sale does not recover the full amount owed to the lender, the bank would not be allowed to report the deficiency to consumer reporting agencies as an unpaid debt from the borrower.

“A deficiency judgment after foreclosure seems to be one of the greatest injustices that occur to homeowners after they have gone through the arduous foreclosure process,” Towns stated in a press release announcing the Fairness in Foreclosure Act.

“Not only are they behind by thousands of dollars on their mortgage payments and facing public auction of their houses, the ordeal may continue indefinitely,” Towns continued.