Rebuilding equity program

(a)

Establishment of voluntary program

(1)

Establishment

(A)

Payment of closing costs

The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation (in this Act referred to as the enterprises) shall each establish a voluntary program for borrowers described in paragraph (2), under which the enterprises shall pay $1,000 toward the closing costs associated with applying for and receiving the refinancing when the borrower agrees to refinance into a fully amortizing loan with a term of not longer than 20 years. (B)

First year of program

During the 12-month period that begins on the date of enactment of this Act, the amount of the closing costs that each enterprise shall pay under the program shall not vary based on the term of the mortgage that the borrower agrees to refinance into. (C)

Subsequent years

(i)

Annual recalculation of closing costs payment

Upon the expiration of the 12-month period set forth under subparagraph (B), and for each of the next two 12-month periods thereafter, the Director of the Federal Housing Finance Agency— (I)shall adjust the amount of the portion of the closing costs that each enterprise will pay under the program— (aa)by an amount that results in such program being revenue neutral for such 12-month period; and (bb)based on economic conditions generally affecting the mortgage and housing markets; and (II)may adjust the amount of the closing costs that each enterprise will pay under the program based on the term of the mortgage that the borrower agrees to refinance into. (ii)

Report

The Director of the Federal Housing Finance Agency shall report any adjustments made pursuant to the requirements of clause (i) to the Chair and Ranking Member of the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives. (2)

Eligible borrowers

The program required by paragraph (1) shall be for any borrower— (A)who qualifies for the Home Affordable Refinance Program carried out by the enterprises; (B)whose subject property has a loan-to-value ratio of not less than 105 percent; and (C)who refinances from a loan with an original term of 30 years to a loan with a term of 20 years or less. (b)

Sunset

Each voluntary program under this section shall terminate on the date that is 3 years after the date of establishment of such program. (c)

Definitions

As used in this section, the following definitions shall apply: (1)

Loan-to-value ratio

The term loan-to-value ratio means the ratio of the amount of the primary mortgage on a property to the value of that property. (2)

Closing costs

The term closing costs— (A)means all reasonable and actual costs charged to the borrower by a third party to the refinancing transaction; (B)includes— (i)appraisal and inspection fees; (ii)fees associated with obtaining a borrower’s credit report; (iii)title insurance and title examination costs; (iv)attorneys’ fees associated with closing the transaction, other than attorneys’ fees associated with disputes arising out of the transaction or otherwise ancillary to closing the transaction; (v)document preparation costs, if completed by a third party not controlled by the lender; (vi)transfer stamps, recording fees, courier fees, wire transfer fees, and reconveyance fees; and (vii)test and certification fees; and (C)does not include any costs charged to the borrower by the lender, including— (i)lender application fees; and (ii)lender origination fees.