[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 607 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 607

  To amend the National Housing Act to require partial rebates of FHA 
mortgage insurance premiums to certain mortgagors upon payment of their 
                         FHA-insured mortgages.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 23, 2001

 Mr. Allard (for himself and Mr. Gramm) introduced the following bill; 
which was read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
  To amend the National Housing Act to require partial rebates of FHA 
mortgage insurance premiums to certain mortgagors upon payment of their 
                         FHA-insured mortgages.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Homeowners Rebate Act of 2001''.

SEC. 2. PAYMENT OF DISTRIBUTIVE SHARES FROM MUTUAL MORTGAGE INSURANCE 
              FUND RESERVES.

    (a) In General.--Section 205(c) of the National Housing Act (12 
U.S.C. 1711(c)) is amended to read as follows:
    ``(c) Distribution of Reserves.--Upon termination of an insurance 
obligation of the Mutual Mortgage Insurance Fund by payment of the 
mortgage insured thereunder, if the Secretary determines (in accordance 
with subsection (e)) that there is a surplus for distribution under 
this section to mortgagors, the Participating Reserve Account shall be 
subject to distribution as follows:
            ``(1) Required distribution.--In the case of a mortgage 
        paid after November 5, 1990, and insured for 7 years or more 
        before such termination, the Secretary shall distribute to the 
        mortgagor a share of such Account in such manner and amount as 
        the Secretary shall determine to be equitable and in accordance 
        with sound actuarial and accounting practice, subject to 
        paragraphs (3) and (4).
            ``(2) Discretionary distribution.--In the case of a 
        mortgage not described in paragraph (1), the Secretary is 
        authorized to distribute to the mortgagor a share of such 
        Account in such manner and amount as the Secretary shall 
        determine to be equitable and in accordance with sound 
        actuarial and accounting practice, subject to paragraphs (3) 
        and (4).
            ``(3) Limitation on amount.--In no event shall the amount 
        of any such distributable share exceed the aggregate scheduled 
        annual premiums of the mortgagor to the year of termination of 
        the insurance.
            ``(4) Application requirement.--The Secretary shall not 
        distribute any share of an eligible mortgagor under this 
        subsection beginning on the date which is 6 years after the 
        date that the Secretary first transmitted written notification 
        of eligibility to the last known address of the mortgagor, 
        unless the mortgagor has applied in accordance with procedures 
        prescribed by the Secretary for payment of the share within the 
        6-year period. The Secretary shall transfer from the 
        Participating Reserve Account to the General Surplus Account 
        any amounts that, pursuant to the preceding sentence, are no 
        longer eligible for distribution.''.
    (b) Determination of Surplus.--Section 205(e) of the National 
Housing Act (12 U.S.C. 1711(e)) is amended by adding at the end the 
following: ``Notwithstanding any other provision of this section, if, 
at the time of such a determination, the capital ratio (as defined in 
subsection (f)) for the Fund is 3.0 percent or greater, the Secretary 
shall determine that there is a surplus for distribution under this 
section to mortgagors.''.
    (c) Retroactive Payments.--
            (1) Timing.--Not later than 3 months after the date of 
        enactment of this Act, the Secretary of Housing and Urban 
        Development shall determine the amount of each distributable 
        share for each mortgage described in paragraph (2) to be paid 
        and shall make payment of such share.
            (2) Mortgages covered.--A mortgage described in this 
        paragraph is a mortgage for which--
                    (A) the insurance obligation of the Mutual Mortgage 
                Insurance Fund was terminated by payment of the 
                mortgage before the date of enactment of this Act;
                    (B) a distributable share is required to be paid to 
                the mortgagor under section 205(c)(1) of the National 
                Housing Act (12 U.S.C. 1711(c)(1)), as amended by 
                subsection (a) of this section; and
                    (C) no distributable share was paid pursuant to 
                section 205(c) of the National Housing Act upon 
                termination of the insurance obligation of such Fund.
                                 <all>