[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3221 Engrossed Amendment House (EAH)]
In the House of Representatives, U. S.,
May 8, 2008.
Resolved, That the House agree to the amendment of the Senate to
the title of the bill (H.R. 3221) entitled ``An Act moving the United
States toward greater energy independence and security, developing
innovative new technologies, reducing carbon emissions, creating green
jobs, protecting consumers, increasing clean renewable energy
production, and modernizing our energy infrastructure, and to amend the
Internal Revenue Code of 1986 to provide tax incentives for the
production of renewable energy and energy conservation'' and be it
further
Resolved, That the House agree to the amendment of the Senate to
the text of the aforesaid bill, with the following
HOUSE AMENDMENTS TO SENATE AMENDMENTS:
(1)In the matter proposed to be inserted by the amendment of the Senate
to the text of the bill, strike section 1 and all that follows through
the end of title V and insert the following:
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``American Housing
Rescue and Foreclosure Prevention Act of 2008''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title and table of contents.
TITLE I--FHA HOUSING STABILIZATION AND HOMEOWNERSHIP RETENTION
Sec. 101. Short title.
Subtitle A--Homeownership Retention
Sec. 111. Purposes.
Sec. 112. Insurance of homeownership retention mortgages.
Sec. 113. Study of Auction or Bulk Refinance Program.
Sec. 114. Temporary increase in maximum loan guaranty amount for
certain housing loans guaranteed by
Secretary of Veterans Affairs.
Sec. 115. Study of possible accounting revisions relating to property
at risk of foreclosure and the availability
of credit for refinancing home mortgages at
risk of foreclosure.
Sec. 116. GAO study of the effect of tightening credit markets in
communities affected by the subprime
mortgage foreclosure crises and predatory
lending on prospective first-time
homebuyers seeking mortgages.
Subtitle B--Office of Housing Counseling
Sec. 131. Short title.
Sec. 132. Establishment of Office of Housing Counseling.
Sec. 133. Counseling procedures.
Sec. 134. Grants for housing counseling assistance.
Sec. 135. Requirements to use HUD-certified counselors under HUD
programs.
Sec. 136. Study of defaults and foreclosures.
Sec. 137. Definitions for counseling-related programs.
Sec. 138. Updating and simplification of mortgage information booklet.
Subtitle C--Combating Mortgage Fraud
Sec. 151. Authorization of appropriations to combat mortgage fraud.
TITLE II--FHA REFORM AND MANUFACTURED HOUSING LOAN INSURANCE
MODERNIZATION
Subtitle A--FHA Reform
Sec. 201. Short title.
Sec. 202. Findings and purposes.
Sec. 203. Maximum principal loan obligation.
Sec. 204. Extension of mortgage term.
Sec. 205. Downpayment simplification.
Sec. 206. Mortgage insurance premiums for qualified homeownership
assistance entities and higher-risk
borrowers.
Sec. 207. Risk-based mortgage insurance premiums.
Sec. 208. Payment incentives for higher-risk borrowers.
Sec. 209. Protections for higher-risk borrowers.
Sec. 210. Refinancing mortgages.
Sec. 211. Annual reports on new programs and loss mitigation.
Sec. 212. Insurance for single family homes with licensed child care
facilities.
Sec. 213. Rehabilitation loans.
Sec. 214. Discretionary action.
Sec. 215. Insurance of condominiums and manufactured housing.
Sec. 216. Mutual Mortgage Insurance Fund.
Sec. 217. Hawaiian home lands and Indian reservations.
Sec. 218. Conforming and technical amendments.
Sec. 219. Home equity conversion mortgages.
Sec. 220. Study on participation of mortgage brokers and correspondent
lenders.
Sec. 221. Conforming loan limit in disaster areas.
Sec. 222. Failure to pay amounts from escrow accounts for single family
mortgages.
Sec. 223. Acceptable identification for FHA mortgagors.
Sec. 224. Pilot program for automated process for borrowers without
sufficient credit history.
Sec. 225. Sense of Congress regarding technology for financial systems.
Sec. 226. Clarification of disposition of certain properties.
Sec. 227. Valuation of multifamily properties in noncompetitive sales
by HUD to states and localities.
Sec. 228. Limitation on mortgage insurance premium increases.
Sec. 229. Civil money penalties for improperly influencing appraisals.
Sec. 230. Mortgage insurance premium refunds.
Sec. 231. Savings provision.
Sec. 232. Implementation.
Subtitle B--FHA Manufactured Housing Loan Insurance Modernization
Sec. 251. Short title.
Sec. 252. Findings and purposes.
Sec. 253. Exception to limitation on financial institution portfolio.
Sec. 254. Insurance benefits.
Sec. 255. Maximum loan limits.
Sec. 256. Insurance premiums.
Sec. 257. Technical corrections.
Sec. 258. Revision of underwriting criteria.
Sec. 259. Requirement of social security account number for assistance.
Sec. 260. GAO study of mitigation of tornado risks to manufactured
homes.
TITLE III--REFORM OF GOVERNMENT-SPONSORED ENTITIES FOR HOUSING FINANCE
Sec. 301. Short title.
Sec. 302. Definitions.
Subtitle A--Reform of Regulation of Enterprises and Federal Home Loan
Banks
Chapter 1--Improvement of Safety and Soundness
Sec. 311. Establishment of the Federal Housing Finance Agency.
Sec. 312. Duties and authorities of Director.
Sec. 313. Federal Housing Enterprise Board.
Sec. 314. Authority to require reports by regulated entities.
Sec. 315. Disclosure of income and charitable contributions by
enterprises.
Sec. 316. Assessments.
Sec. 317. Examiners and accountants.
Sec. 318. Prohibition and withholding of executive compensation.
Sec. 319. Reviews of regulated entities.
Sec. 320. Inclusion of minorities and women; diversity in Agency
workforce.
Sec. 321. Regulations and orders.
Sec. 322. Non-waiver of privileges.
Sec. 323. Risk-based capital requirements.
Sec. 324. Minimum and critical capital levels.
Sec. 325. Review of and authority over enterprise assets and
liabilities.
Sec. 326. Corporate governance of enterprises.
Sec. 327. Required registration under Securities Exchange Act of 1934.
Sec. 328. Liaison with Financial Institutions Examination Council.
Sec. 329. Guarantee fee study.
Sec. 330. Conforming amendments.
Chapter 2--Improvement of Mission Supervision
Sec. 331. Transfer of product approval and housing goal oversight.
Sec. 332. Review of enterprise products.
Sec. 333. Conforming loan limits.
Sec. 334. Annual housing report regarding regulated entities.
Sec. 335. Annual reports by regulated entities on affordable housing
stock.
Sec. 336. Mortgagor identification requirements for mortgages of
regulated entities.
Sec. 337. Revision of housing goals.
Sec. 338. Duty to serve underserved markets.
Sec. 339. Monitoring and enforcing compliance with housing goals.
Sec. 340. Affordable Housing Fund.
Sec. 341. Consistency with mission.
Sec. 342. Enforcement.
Sec. 343. Conforming amendments.
Chapter 3--Prompt Corrective Action
Sec. 345. Capital classifications.
Sec. 346. Supervisory actions applicable to undercapitalized regulated
entities.
Sec. 347. Supervisory actions applicable to significantly
undercapitalized regulated entities.
Sec. 348. Authority over critically undercapitalized regulated
entities.
Sec. 349. Conforming amendments.
Chapter 4--Enforcement Actions
Sec. 351. Cease-and-desist proceedings.
Sec. 352. Temporary cease-and-desist proceedings.
Sec. 353. Prejudgment attachment.
Sec. 354. Enforcement and jurisdiction.
Sec. 355. Civil money penalties.
Sec. 356. Removal and prohibition authority.
Sec. 357. Criminal penalty.
Sec. 358. Subpoena authority.
Sec. 359. Conforming amendments.
Chapter 5--General Provisions
Sec. 361. Boards of enterprises.
Sec. 362. Report on portfolio operations, safety and soundness, and
mission of enterprises.
Sec. 363. Conforming and technical amendments.
Sec. 364. Study of alternative secondary market systems.
Sec. 365. Effective date.
Subtitle B--Federal Home Loan Banks
Sec. 371. Definitions.
Sec. 372. Directors.
Sec. 373. Federal Housing Finance Agency oversight of Federal Home Loan
Banks.
Sec. 374. Joint activities of Banks.
Sec. 375. Sharing of information between Federal Home Loan Banks.
Sec. 376. Reorganization of Banks and voluntary merger.
Sec. 377. Securities and Exchange Commission disclosure.
Sec. 378. Community financial institution members.
Sec. 379. Technical and conforming amendments.
Sec. 380. Study of affordable housing program use for long-term care
facilities.
Sec. 381. Effective date.
Subtitle C--Transfer of Functions, Personnel, and Property of Office of
Federal Housing Enterprise Oversight, Federal Housing Finance Board,
and Department of Housing and Urban Development
Chapter 1--Office of Federal Housing Enterprise Oversight
Sec. 385. Abolishment of OFHEO.
Sec. 386. Continuation and coordination of certain regulations.
Sec. 387. Transfer and rights of employees of OFHEO.
Sec. 388. Transfer of property and facilities.
Chapter 2--Federal Housing Finance Board
Sec. 391. Abolishment of the Federal Housing Finance Board.
Sec. 392. Continuation and coordination of certain regulations.
Sec. 393. Transfer and rights of employees of the Federal Housing
Finance Board.
Sec. 394. Transfer of property and facilities.
Chapter 3--Department of Housing and Urban Development
Sec. 395. Termination of enterprise-related functions.
Sec. 396. Continuation and coordination of certain regulations.
Sec. 397. Transfer and rights of employees of Department of Housing and
Urban Development.
Sec. 398. Transfer of appropriations, property, and facilities.
TITLE IV--EMERGENCY MORTGAGE LOAN MODIFICATION
Sec. 401. Short title.
Sec. 402. Safe harbor for qualified loan modifications or workout plans
for certain residential mortgage loans.
TITLE V--OTHER HOUSING PROVISIONS
Sec. 501. Depository Institution Community Development Investments
Enhancement.
Sec. 502. Preservation of certain affordable housing dwelling units.
Sec. 503. Eligibility of certain projects for enhanced voucher
assistance.
Sec. 504. Transfer of certain rental assistance contracts.
Sec. 505. Protection against discriminatory treatment.
TITLE I--FHA HOUSING STABILIZATION AND HOMEOWNERSHIP RETENTION
SEC. 101. SHORT TITLE.
This title may be cited as the ``FHA Housing Stabilization and
Homeownership Retention Act of 2008''.
Subtitle A--Homeownership Retention
SEC. 111. PURPOSES.
The purposes of this subtitle are--
(1) to create an FHA program, which is voluntary on the
part of borrowers and existing mortgage loan holders, including
both existing senior mortgage loan holders and existing
subordinate mortgage loan holders, to insure refinance loans
for substantial numbers of borrowers at risk of foreclosure, at
levels which are reasonably likely to be sustainable through
enhanced affordability of debt service;
(2) to provide flexible underwriting for FHA-insured loans
under such a program to provide refinancing opportunities under
fiscally responsible terms, including higher fees commensurate
with higher risk levels, a seasoning requirement for higher
debt to income loans, and additional program controls to limit
and control risk;
(3) to bar speculators and second home owners from
participation in such program;
(4) to require existing mortgage loan holders to take
substantial loan writedowns in exchange for having the Federal
Government and the borrower assume the ongoing risk of the
refinanced loan;
(5) to set a loan-to-value limit on such loans that
provides the FHA with an equity buffer against potential loan
losses, provides protections against the risk of future home
price declines, and creates incentives for borrowers to
maintain payments on the loan;
(6) to protect the FHA against losses which may exceed
normal FHA loss levels by establishing higher fee levels,
including an exit fee and profit sharing during the first five
years of the loan, with such higher fee levels effectively
being funded through the required lender writedown;
(7) to provide a fair level of incentives for junior lien
holders to provide the necessary releases of their lien
interests, in order to meet program requirements that all
outstanding liens must be extinguished, and thereby permit the
refinancing to be completed;
(8) to enhance the administrative capacity of the FHA to
carry out its expanded role under the program through
establishment of an Oversight Board which adds expertise from
the Federal Reserve and the Department of the Treasury, through
additional funding to contract out for the provision of any
needed expertise in designing program requirements and
oversight, and through additional funding to increase FHA
personnel resources as needed to handle the increased loan
volume resulting from the program;
(9) to sunset the program when it is no longer needed; and
(10) to study the need for and efficacy of an auction or
bulk refinancing mechanism to facilitate more expeditious
refinancing of larger volumes of existing mortgages that are at
risk for foreclosure into FHA-insured mortgages.
SEC. 112. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.
(a) Mortgage Insurance Program.--Title II of the National Housing
Act (12 U.S.C. 1707 et seq.) is amended by adding at the end the
following new section:
``SEC. 257. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.
``(a) Oversight Board.--
``(1) Establishment.--There is hereby established the
Refinance Program Oversight Board (in this section referred to
as the `Oversight Board').
``(2) Membership.--The Oversight Board shall consist of the
following members or their designees:
``(A) The Secretary of the Treasury.
``(B) The Secretary of Housing and Urban
Development.
``(C) The Chairman of the Board of Governors of the
Federal Reserve System.
``(3) No additional compensation.--Members of the Oversight
Board shall receive no additional pay by reason of service on
the Oversight Board.
``(4) Responsibilities.--The Oversight Board shall be
responsible for establishing program and oversight requirements
for the program under this section, which shall include--
``(A) detailed program requirements under
subsection (c);
``(B) flexible underwriting criteria under
subsection (d);
``(C) a mortgage premium structure under subsection
(e);
``(D) a reasonable fee and rate limitation under
subsection (f);
``(E) enhancement of FHA capacity under subsection
(i), including oversight of such activities and
personnel as may be contracted for as provided therein;
``(F) monitoring of underwriting risk under
subsection (j); and
``(G) such additional requirements as may be
necessary and appropriate to oversee and implement the
program.
``(5) Use of resources.--In carrying out its functions
under this section, the Oversight Board may utilize, with their
consent and to the extent practical, the personnel, services,
and facilities of the Department of the Treasury, the
Department of Housing and Urban Development, the Board of
Governors of the Federal Reserve System, the Federal Reserve
Banks, and other Federal agencies, with or without
reimbursement therefore.
``(b) Authority.--
``(1) In general.--The Secretary shall, subject only to the
absence of qualified requests for insurance under this section
and to the limitations under subsection (h) of this section and
section 531(a), make commitments to insure and insure any
mortgage covering a 1- to 4-family residence that is made for
the purpose of paying or prepaying outstanding obligations
under an existing mortgage or mortgages on the residence if the
mortgage being insured under this section meets the
requirements of this section, as established by the Oversight
Board, and of section 203, except as modified by this section.
``(2) Establishment and implementation of program
requirements.--The Oversight Board shall establish program
requirements and standards under this section and the Secretary
shall implement such requirements and standards. The Oversight
Board and the Secretary may establish and implement any
requirements or standards through interim guidance and
mortgagee letters.
``(c) Requirements.--To be eligible for insurance under this
section, a mortgage shall comply with all of the following
requirements:
``(1) Owner-occupied principal residence requirement.--The
residence securing the mortgage insured under this section
shall be occupied by the mortgagor as the principal residence
of the mortgagor and the mortgagor shall provide a
certification to the originator of the mortgage that such
residence securing the mortgage insured under this section is
the only residence in which the mortgagor has any present
ownership interest. With regard to such certification, the
Oversight Board may create exceptions for mortgagors who have
only a partial ownership interest in a residence other than the
residence securing the mortgage insured under this section.
``(2) Lack of capacity to pay existing mortgage or
mortgages.--
``(A) Borrower certification.--
``(i) The mortgagor shall provide a
certification to the originator of the mortgage
that the mortgagor--
``(I) has not intentionally
defaulted on the existing mortgage or
mortgages; and
``(II) has not knowingly, or
willfully and with actual knowledge
furnished material information known to
be false for the purpose of obtaining
the existing mortgage or mortgages.
``(ii) The mortgagor shall agree in writing
that the mortgagor shall be liable to repay the
FHA any direct financial benefit achieved from
the reduction of indebtedness on the existing
mortgage or mortgages on the residence
refinanced under this section derived from
misrepresentations made in the certifications
and documentation required under this
subparagraph, subject to the discretion of the
Oversight Board.
``(B) Current borrower debt-to-income ratio.--As of
March 1, 2008, the mortgagor shall have had a ratio of
mortgage debt to income, taking into consideration all
existing mortgages at such time, greater than 35
percent.
``(C) Loss mitigation responsibilities.--This
section may not be construed to alter or in any way
affect the responsibilities of any party (including the
mortgage servicer) to engage in any or all loan
modification or other loss mitigation strategies to
maximize value to investors as established by any
applicable contract.
``(3) Eligibility of mortgages by date of origination.--The
existing senior mortgage shall have been originated on or
before December 31, 2007.
``(4) Maximum loan-to-value ratio for new loans.--The
mortgage being insured under this section shall involve a
principal obligation (including such initial service charges,
appraisal, inspection, and other fees as the Secretary shall
approve and including the mortgage insurance premium paid
pursuant to subsection (e)(1)) in an amount not to exceed 90
percent of the current appraised value of the property. Section
203(d) shall not apply to mortgages insured under this section.
``(5) Required waiver of prepayment penalties and fees.--
All penalties for prepayment of the existing mortgage or
mortgages, and all fees and penalties related to default or
delinquency on all existing mortgages or mortgages, shall be
waived or forgiven.
``(6) Required loan reduction.--
``(A) Reduction of indebtedness under existing
senior mortgage.--The amount of indebtedness on the
existing mortgage or mortgages on the residence shall
have been substantially reduced by such percentage as
the Oversight Board may require, and such reduction
shall be at least sufficient to--
``(i) provide for the refinancing of such
existing mortgage or mortgages in an amount not
greater than 90 percent of the current
appraised value of the property involved;
``(ii) pay the full amount of the single
premium to be collected pursuant to subsection
(e)(1) (which shall be an amount equal to 3.0
percent of the amount of the original insured
principal obligation of the mortgage insured
under this section and which shall serve as an
additional reserve to cover possible loan
losses); and
``(iii) pay the full amount of the loan
origination fee and any other closing costs,
not to exceed 2.0 percent of the amount of the
original insured principal obligation of the
mortgage insured under this section.
``(B) Extinguishment of debt by refinancing.--
``(i) Required agreement.--All existing
holders of mortgage liens on the property
securing the mortgage to be insured under this
section shall agree to accept the proceeds of
the insured loan as payment in full of all
indebtedness under all existing mortgages, and
all encumbrances related to such mortgages
shall be removed. The Oversight Board may take
such actions as the Oversight Board considers
necessary or appropriate to facilitate
coordination and agreement between the holders
of the existing senior mortgage and any
existing subordinate mortgages, taking into
consideration the subordinate lien status of
such subordinate mortgages, to comply with the
requirement under this subparagraph.
``(ii) Treatment of multiple mortgage
liens.--In addition to clause (i), the
Oversight Board shall adopt one of the
following approaches for all mortgages or such
classes of mortgages as the Oversight Board may
determine and may, from time to time,
reconsider:
``(I) Fixed price.--As a
requirement for participating in this
program, all existing lien holders will
agree to not provide any payment to
subordinate lien holders other than
such payment in accordance with a
formula established by the Oversight
Board as set forth in clause (iii);
except that the Oversight Board may
establish a short period within which
first and subordinate lien holders may
negotiate to extinguish all subordinate
liens for compensation that may be
different from the amount determined
under such formula set forth in clause
(iii).
``(II) Shared equity.--The
Oversight Board may require the
mortgagor under a mortgage insured
under this section to agree to share a
portion of any future equity in the
mortgaged property with holders of
existing subordinate mortgages, in
accordance with a formula for such
shared equity established by the
Oversight Board as set forth in clause
(iii), except that payments of such
shared equity may be made only after
the Secretary recovers all amounts owed
to the Secretary with respect to such
mortgage pursuant to the program under
this section (including amounts owed
pursuant to paragraph (8)).
``(iii) Formula.--In determining a formula
for determining any payments to subordinate
lien holders pursuant to subclauses (I) and
(II) of clause (ii), and in any reconsideration
of such formula as the Oversight Board may from
time to time undertake, the Oversight Board
shall take into consideration the current
market value of such liens. In no case may a
formula provide for the payment of more than 1
percent of the current appraised value of the
mortgaged property to a subordinate lien holder
if the outstanding balance owed to more senior
lien holders is equal to or exceeds such
current appraised value.
``(iv) Voluntary program.--This section may
not be construed to require any holder of any
existing mortgage to participate in the program
under this section generally, or with respect
to any particular loan.
``(v) Source of payments for subordinate
loans.--Any amounts paid to holders of any
existing subordinate mortgages in connection
with the origination and insurance of a
mortgage under this section shall derive only
from--
``(I) the holder of the existing
senior mortgage; or
``(II) in the case only of the
shared equity approach under clause
(ii)(II), the mortgagor under the
mortgage insured under this section
``(7) Required reduction of debt service.--The debt service
payments due under the mortgage insured under this section
shall be in an amount that is substantially reduced from the
debt service payments due under the existing mortgage or
mortgages, which reduction may be achieved through a reduction
of indebtedness, a reduction in the interest rate being paid,
or an extension of the term of the mortgage, or any combination
thereof.
``(8) Financial recovery to federal government through exit
premium.--
``(A) Subordinate lien.--The mortgage shall provide
that the Secretary shall retain a lien on the residence
involved, which shall be subordinate to the mortgage
insured under this section but senior to all other
mortgages on the residence that may exist at any time,
and which shall secure the repayment of the amount due
under subparagraph (D).
``(B) No interest or payment during mortgage.--The
amount secured by the lien retained by the Secretary
pursuant to subparagraph (A) shall not bear interest
and shall not be repayable to the Secretary except as
provided in subparagraph (D) of this paragraph.
``(C) Net proceeds available for exit premium.--
Upon the sale, refinancing, or other disposition of the
residence securing a mortgage insured under this
section, any proceeds resulting from such disposition
that remain after deducting the remaining insured
principal balance of the mortgage insured under this
section shall be available to meet the obligation under
subparagraph (D). In the case of a refinance, non-arms
length transaction, or such other transaction as the
Oversight Board shall determine, the proceeds shall be
based on the current appraised value at the time of the
refinance or transaction.
``(D) Exit premium.--Upon any refinancing of the
mortgage insured under this section or any sale or
disposition of the residence securing the mortgage, the
Secretary shall, subject to the availability of
sufficient net proceeds described in subparagraph (C),
receive the greater of--
``(i) 3 percent of the amount of the
original insured principal obligation of the
mortgage (or the entire amount of the net
proceeds described in subparagraph (C) if such
net proceeds are less than 3 percent of the
amount of the original insured principal
obligation of the mortgage); or
``(ii) a percentage of the portion of the
net proceeds available for profit-sharing, as
described in subparagraph (E), which shall be--
``(I) in the case of any
refinancing, sale, or disposition
occurring during the first year of the
term of the mortgage, 100 percent of
such net proceeds;
``(II) in the case of any
refinancing, sale, or disposition
occurring during the second year of the
term of the mortgage, 80 percent;
``(III) in the case of any
refinancing, sale, or disposition
occurring during the third year of the
term of the mortgage, 60 percent; and
``(IV) in the case of any
refinancing, sale, or disposition
occurring during the fourth year of the
term of the mortgage or at any time
thereafter, 50 percent;
except that such percentage of proceeds shall be
reduced by all fees the Secretary has collected for the
mortgage prior to such refinancing, sale, or
disposition.
``(E) Net proceeds available for profit-sharing.--
With respect to any mortgage insured under this
section, the net proceeds available for purposes of
subparagraph (D)(ii) shall be any proceeds resulting
from the sale, refinancing, or other disposition of the
residence securing the mortgage that remain after
deducting the original insured principal obligation of
the mortgage. In the case of a refinance, non-arms
length transaction, or such other transaction as the
Oversight Board shall determine, the proceeds shall be
based on the current appraised value at the time of the
refinance or transaction.
``(F) Authority to prohibit new second liens.--The
Oversight Board shall prohibit borrowers from granting
a new second lien on the mortgaged property during the
first five years of the term of the mortgage insured
under this section, except as the Oversight Board
determines to be necessary to ensure the appropriate
maintenance of the mortgaged property.
``(9) Documentation and verification of income.--In
complying with the FHA underwriting requirements under the
program under this section, the mortgagee shall document and
verify the income of the mortgagor or non-filing status by
procuring (A) an income tax return transcript of the income tax
returns of the mortgagor, or (B) a copy of the income tax
returns for the Internal Revenue Service, for the two most
recent years for which the filing deadline for such years has
passed and by any other method, in accordance with procedures
and standards that the Oversight Board shall establish.
``(10) Fixed rate mortgage.--The mortgage insured under
this section shall bear interest at a single rate that is fixed
for the entire term of the mortgage.
``(11) Maximum loan amount.--Notwithstanding section
203(b)(2), the mortgage being insured under this section shall
involve a principal obligation in an amount that does not
exceed the limitation (for a property of the applicable size)
on the amount of the principal obligation that would be
allowable under the terms of section 202(a) of the Economic
Stimulus Act of 2008 if the mortgage were insured pursuant to
such section. The limitation on the amount of the principal
obligation allowable under such Act shall apply for the
purposes of this section until the termination under subsection
(n) of the program under this section.
``(12) Ineligibility for fraud conviction.--The mortgagor
shall not have been convicted under Federal or State law for
mortgage fraud during the 7-year period ending upon the
insurance of the mortgage under this section.
``(13) Lender review.--The mortgagee under the mortgage
shall conduct an electronic database search of the mortgagor's
criminal history to determine if the mortgagor has had a
conviction described in paragraph (12). The mortgagee may
charge the mortgagor a reasonable fee for the actual cost of
the search not to exceed a maximum rate established by the
Oversight Board. The Oversight Board may provide clarification,
if needed, to help mortgagees identify any differences among
the States in how they report mortgage fraud convictions. The
Oversight Board shall establish procedures sufficient to allow
the mortgagor to challenge a mortgagee's determination with
respect to paragraph (12) (including to correct inaccuracies
resulting from theft of the mortgagor's identity or personally
identifiable information).
``(14) Appraisals.--Any appraisal conducted in connection
with a mortgage insured under this section shall--
``(A) be based on the current value of the
property;
``(B) be conducted in accordance with title XI of
the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (12 U.S.C. 3331 et seq.);
``(C) be completed by an appraiser who meets the
competency requirements of the Uniform Standards of
Professional Appraisal Practice;
``(D) be wholly consistent with the appraisal
standards, practices, and procedures under section
202(e) of this Act that apply to all loans insured
under this Act; and
``(E) comply with the requirements of subsection
(g) of this section (relating to appraisal
independence).
``(15) Statement of loan terms.--
``(A) Requirement.--The mortgagor shall have been
provided by the mortgagee, not later than three days
before closing for the mortgage, a form described in
subparagraph (B) appropriately and accurately completed
by the mortgagee.
``(B) Form.--The form described in this
subparagraph shall be a single page, written disclosure
regarding the mortgage loan to be insured under this
section that, when completed by the mortgagee, sets
forth, in accordance with such requirements as the
Secretary shall by regulation establish a best possible
estimate of--
``(i) the total loan amount under the
mortgage;
``(ii) the loan-to-value ratio for the
mortgage;
``(iii) the final maturity date for the
mortgage;
``(iv) the amount of any prepayment fee to
be charged if the mortgage is paid in full
before the final maturity date for the
mortgage, including the percentages of any net
proceeds to be received by the Secretary
pursuant to paragraph (8)(D)(ii);
``(v) the amount of the exit premium under
the mortgage pursuant to subsection (e)(3);
``(vi) the interest rate under the mortgage
expressed as an annual percentage rate, and the
amount of the monthly payment due under such
rate;
``(vii) the fully indexed rate of interest
under the mortgage expressed as an annual
percentage rate and the amount of the monthly
payment due under such rate;
``(viii) the monthly household income of
the borrower upon which the mortgage is based;
``(ix) the amount of the monthly payment
due under the mortgage, and the amount of such
initial monthly payment plus monthly amounts
due for taxes and insurance on the property for
which the mortgage is made, both expressed as a
percentage of the monthly household income of
the borrower; and
``(x) the aggregate amount of settlement
charges for all settlement services provided in
connection with the mortgage, the amount of
such charges that are included in the principal
amount and the amount of such charges the
borrower must pay at closing, the aggregate
amount of mortgagee's fees connection with the
mortgage, and the aggregate amount of other
fees or required payments in connection with
the mortgage.
``(d) Flexible Underwriting Criteria.--
``(1) In general.--The Oversight Board shall establish, and
the Secretary acting on behalf of the Oversight Board shall
implement, underwriting standards for mortgages insured under
this section that--
``(A) ensure that each mortgagor under a mortgage
insured under this section has a reasonable expectation
of repaying the mortgage, taking into consideration the
mortgagor's income, assets, liabilities, payment
history, and other applicable criteria, but which shall
not result in a denial of insurance solely on the basis
of the mortgagor's current FICO or other credit scores,
or any delinquency or default by the mortgagor under
the existing mortgage or mortgages, or any case filed
under title 11, United States Code, by the mortgagor;
and
``(B) subject to the provisions of subparagraph
(A), permit a total debt-to-income ratio of up to 43
percent.
``(2) Exception.--
``(A) In general.--Subject to the underwriting
standards established under paragraph (1)(A) and any
additional requirements that the Oversight Board
considers appropriate, the Oversight Board shall permit
a total debt-to-income ratio of more than 43 percent,
but not more than 50 percent, if the mortgagor has
made, on a timely basis before the endorsement of the
mortgage insured under this section, not less than six
months of payments in an amount not less than the
amount of the monthly payment due under the mortgage to
be insured under this section. The holder of the
existing senior mortgage shall exercise forbearance
with respect to such mortgage during the period in
which such payments are made.
``(B) Computation of debt-to-income ratio.-- In
computing the mortgagor's total debt-to-income ratio
for purposes of mortgage qualification under the
underwriting standards established pursuant to this
section--
``(i) if the mortgagor is a debtor in a
case under chapter 13 of title 11, United
States Code, payments on recurring debts other
than housing expenses shall be based on the
amounts being paid on such debts under the
mortgagor's confirmed plan under such chapter;
and
``(ii) if the mortgagor is a debtor in a
case under chapter 7 of title 11, United States
Code, recurring debts that are to be discharged
in that case shall not be considered.
``(3) Authority.--The Oversight Board may alter the ratios
under this subsection for a particular class of borrowers
subject to such requirements as the Board determines is
necessary and appropriate to fulfill the purposes of this Act.
``(4) Representations and warranties.--The Oversight Board
shall require the underwriter of the insured loan to provide
such representations and warranties as the Oversight Board
considers necessary or appropriate for the Secretary to enforce
compliance with all underwriting and appraisal standards of the
program.
``(e) Premiums.--For each mortgage insured under this section, the
Oversight Board shall establish and the Secretary shall collect--
``(1) at the time of insurance, a single premium payment in
an amount equal to 3.0 percent of the amount of the original
insured principal obligation of the mortgage, which shall be
paid from the proceeds of the mortgage being insured under this
section, through the reduction of the amount of indebtedness on
the existing senior mortgage required under subsection
(c)(6)(A);
``(2) in addition to the premium under paragraph (1),
annual premium payments in an amount equal to 1.50 percent of
the remaining insured principal balance of the mortgage; and
``(3) an exit premium in the amount determined under
subsection (c)(8), but which shall not be less than 3.0 percent
of the original insured principal obligation of the mortgage,
subject only to the availability of sufficient net proceeds
from sale, refinancing, or other disposition of the property,
as determined in subsection (c)(8).
``(f) Origination Fees and Mortgage Rate.--The Oversight Board
shall establish and the Secretary shall implement a reasonable
limitation on origination fees for mortgages insured under this section
and shall establish procedures to ensure that interest rates on such
mortgages shall be commensurate with market rate interest rates on such
types of loans.
``(g) Appraisal Independence.--
``(1) Prohibitions on interested parties in a real estate
transaction.--No mortgage lender, mortgage broker, mortgage
banker, real estate broker, appraisal management company,
employee of an appraisal management company, nor any other
person with an interest in a real estate transaction involving
an appraisal in connection with a mortgage insured under this
section shall improperly influence, or attempt to improperly
influence, through coercion, extortion, collusion,
compensation, instruction, inducement, intimidation, non-
payment for services rendered, or bribery, the development,
reporting, result, or review of a real estate appraisal sought
in connection with the mortgage.
``(2) Exceptions.--The requirements of paragraph (1) shall
not be construed as prohibiting a mortgage lender, mortgage
broker, mortgage banker, real estate broker, appraisal
management company, employee of an appraisal management
company, or any other person with an interest in a real estate
transaction from asking an appraiser to provide 1 or more of
the following services:
``(A) Consider additional, appropriate property
information, including the consideration of additional
comparable properties to make or support an appraisal.
``(B) Provide further detail, substantiation, or
explanation for the appraiser's value conclusion.
``(C) Correct errors in the appraisal report.
``(3) Civil monetary penalties.--The Secretary may impose a
civil money penalty for any knowing and material violation of
paragraph (1) under the same terms and conditions as are
authorized in section 536(a) of this Act.
``(h) Limitation on Aggregate Insurance Authority.--The aggregate
original principal obligation of all mortgages insured under this
section may not exceed $300,000,000,000.
``(i) Enhancement of FHA Capacity.--Under the direction of the
Oversight Board, the Secretary shall take such actions as may be
necessary to--
``(1) contract for the establishment of underwriting
criteria, automated underwriting systems, pricing standards,
and other factors relating to eligibility for mortgages insured
under this section;
``(2) contract for independent quality reviews of
underwriting, including appraisal reviews and fraud detection,
of mortgages insured under this section or pools of such
mortgages; and
``(3) increase personnel of the Department as necessary to
process or monitor the processing of mortgages insured under
this section.
``(j) Monitoring of Underwriting Risk.--
``(1) Monitoring of designated underwriters.--The Oversight
Board and the Secretary shall monitor independent quality
reviews as established pursuant to subsection (i)(2) to--
``(A) determine compliance of designated
underwriters with underwriting standards;
``(B) determine rates of delinquency, claims rates,
and loss rates of designated underwriters; and
``(C) terminate eligibility of designated
underwriters that do not meet minimum performance
standards as the Oversight Board may establish and the
Secretary implements.
``(2) Reports by oversight board.--The Oversight Board
shall submit monthly reports to the Congress identifying the
progress of the program for mortgage insurance under this
section, which shall contain the following information for each
month:
``(A) The number of new mortgages insured under
this section, including the location of the properties
subject to such mortgages by census tract.
``(B) The aggregate principal obligation of new
mortgages insured under this section.
``(C) The average amount by which the indebtedness
on existing mortgages is reduced in accordance with
subsection (c)(6).
``(D) The average amount by which the debt service
payments on existing mortgages is reduced in accordance
with subsection (c)(7).
``(E) The amount of premiums collected for
insurance of mortgages under this section.
``(F) The claim and loss rates for mortgages
insured under this section.
``(G) The race, ethnicity, gender, and income of
the mortgagors, aggregated by geographical areas at
least as specific as census tracts, except where
necessary to protect privacy of the borrower.
``(H) Any other information that the Oversight
Board considers appropriate.
``(3) Report by inspector general.--The Inspector General
of the Department of Housing and Urban Development shall
conduct an annual audit of the program for mortgage insurance
under this section to determine compliance with this section
and program rules.
``(k) GNMA Commitment Authority.--
``(1) Guarantees.--The Secretary shall take such actions as
may be necessary to ensure that securities based on and backed
by a trust or pool composed of mortgages insured under this
section are available to be guaranteed by the Government
National Mortgage Association as to the timely payment of
principal and interest.
``(2) Guarantee authority.--To carry out the purposes of
section 306 of the National Housing Act (12 U.S.C. 1721), the
Government National Mortgage Association may enter into new
commitments to issue guarantees of securities based on or
backed by mortgages insured under this section, not exceeding
$300,000,000,000. The amount of authority provided under the
preceding sentence to enter into new commitments to issue
guarantees is in addition to any amount of authority to make
new commitments to issue guarantees that is provided to the
Association under any other provision of law.
``(l) Special Risk Insurance Fund.--The insurance of each mortgage
under this section shall be the obligation of the Special Risk
Insurance Fund established by section 238.
``(m) Definitions.--For purposes of this section, the following
definitions shall apply:
``(1) Existing mortgage.--The term `existing mortgage'
means, with respect to a mortgage insured under this section, a
mortgage that is to be extinguished, and paid or prepaid, from
the proceeds of the mortgage insured under this section.
``(2) Existing senior mortgage.--The term `existing senior
mortgage' means, with respect to a mortgage insured under this
section, the existing mortgage that has superior priority.
``(3) Existing subordinate mortgage.--The term `existing
subordinate mortgage' means, with respect to a mortgage insured
under this section, an existing mortgage that has subordinate
priority to the existing senior mortgage.
``(n) Sunset.--
``(1) In general.--Except as provided in paragraph (2), the
authority of the Secretary to make any new commitment to insure
any mortgage under this section shall terminate upon the
expiration of the 2-year period beginning on the date of the
enactment of the FHA Housing Stabilization and Homeownership
Retention Act of 2008.
``(2) Extensions.--The Oversight Board may, not more than
four times, extend the authority to enter into new commitments
to insure mortgages under this section beyond the date
specified in paragraph (1), except that each such extension
shall--
``(A) be effective only if, before the program
terminates pursuant to paragraph (1) or any previous
extension pursuant to this paragraph, the Oversight
Board--
``(i) certifies the need for such extension
in writing to the Congress; and
``(ii) causes notice of such extension to
be published in the Federal Register no later
than the beginning of the 3-month period that
ends upon the scheduled termination date of the
program; and
``(B) be for a period of not more than 6 months.
``(o) Authorizations of Appropriations.--There is authorized to be
appropriated for each of fiscal years 2008 and 2009--
``(1) $230,000,000 for providing counseling regarding loss
mitigation for mortgagors with 1- to 4-family residences,
including determining eligibility for the program under this
section, with grants to be administered through the
Neighborhood Reinvestment Corporation, except that--
``(A) funds shall be targeted to States and
communities based on their levels of foreclosures and
delinquencies in 2007 and 2008;
``(B) not less than 15 percent of the funds made
available pursuant to this paragraph shall be provided
to counseling organizations that target counseling
services regarding loss mitigation to minority and low-
income homeowners or provide such services in
neighborhoods with high concentrations of minority and
low-income homeowners;
``(C) $35,000,000 of the funds made available
pursuant to this paragraph shall be used by the
Neighborhood Reinvestment Corporation (referred to in
this subparagraph as the `NRC') to make grants to State
and local legal organizations or attorneys that have
demonstrated legal experience in home foreclosure or
eviction law to provide legal assistance related to
home ownership preservation, home foreclosure
prevention, and tenancy associated with home
foreclosure or to counseling intermediaries that have
been approved by the Department of Housing and Urban
Development for the purpose of making such grants or
contracting for such legal assistance; of the amount
provided under this subparagraph, at least 60 percent
shall be allocated for legal assistance to low-income
homeowners or tenants; such attorneys shall be capable
of assisting homeowners in owner-occupied homes or
tenants who live in homes with mortgages in default, in
danger of default, or subject to or at risk of
foreclosure or eviction and who have legal issues that
cannot be handled by counselors employed by NRC
intermediaries; in using the amount made available
under this subparagraph, the NRC shall give priority
consideration to State and local legal organizations
and attorneys that (i) provide legal assistance in the
100 metropolitan statistical areas (as defined by the
Director of the Office of Management and Budget) with
the highest home foreclosure rates, and (ii) have the
capacity to begin using the financial assistance within
90 days after receipt of the assistance; as a condition
of the receipt of a grant under this subparagraph, the
grantee shall submit to NRC information relating to the
demographic characteristics of the assisted homeowners
or tenants, the dollar amount and terms of the relevant
mortgages and the outcome of legal proceedings related
to the foreclosure or eviction proceedings, including
the resolutions thereof; except that no funds under
this subparagraph shall be used for class action
litigation;
``(D) $20,000,000 of the funds made available
pursuant to this paragraph shall be used for such
counseling for veterans recently returning from active
duty in the Armed Forces;
``(E) the NRC shall give priority consideration for
funding with amounts made available pursuant to this
paragraph, except for funds made available under
subparagraphs (B), (C), and (D), to entities that have
an effective plan in place for making contact,
including personal contact, with defaulted mortgagors,
and such a plan may include use of third parties
(including both for-profit and not-for-profit entities)
to make personal contact with defaulted mortgagors, or
visits to such mortgagors, or both;
``(F) except with respect to funds reserved under
subparagraphs (B), (C), and (D), the NRC shall give
priority consideration for funding with amounts made
available pursuant to this paragraph to entities that
have a written plan that has been implemented for
providing in-person counseling and for making contact,
including personal contact, with defaulted mortgagors,
for the purpose of providing counseling or providing
information about available counseling, both (i) prior
to commencement of any foreclosure proceedings, and
(ii) in the event effective in person or phone contact
has not been made with such defaulted mortgagors prior
thereto, then prior to the conclusion of the
foreclosure process; and
``(G) not less than 2 percent of the funds made
available pursuant to this paragraph shall be used only
for identifying and notifying borrowers under existing
mortgages who are eligible under this section for
insurance of refinancing mortgages, and in making funds
reserved under this subparagraph available for such
purpose, the Secretary shall give preference to
assistance for programs that have a proven history of
outreach within minority communities; and
``(2) $150,000,000 for costs of activities under subsection
(i).
``(p) Audit and Report by Inspector General.--
``(1) Audit.--The Inspector General of the Department of
Housing and Urban Development shall conduct an audit of the
program for loss mitigation counseling funded with amounts made
available under subsection (o)(1) to determine compliance with
such subsection.
``(2) Reports to congress.--Not later than March 30, 2009,
and every calendar quarter thereafter, the Inspector General
shall submit to the appropriate committees of the Congress a
report summarizing the activities of the Inspector General and
the Neighborhood Reinvestment Corporation during the 120-day
period ending on the date of such report. Each report shall
include, for the period covered by such report, a detailed
statement of all obligations, expenditures, and revenues
associated with paragraphs (1) and (2) of subsection (o),
including--
``(A) obligations and expenditures of appropriated
funds;
``(B) the number of homeowners eligible in such
program;
``(C) the number of homeowners participating in
such program;
``(D) the status of homeowners within such program;
``(E) the number of homeowners who have rejected
assistance from the Neighborhood Reinvestment
Corporation; and
``(F) information on participating counseling
services.''.
(b) Special Risk Insurance Fund.--Section 238 of the National
Housing Act (12 U.S.C. 1715z-3) is amended--
(1) in subsection (a)(1), by striking ``or 243'' each place
such term appears and inserting ``243, or 257''; and
(2) in subsection (b), by striking ``and 243'' each place
such term appears and inserting ``243, and 257''.
(c) FHA Reverse Mortgage Program.--Section 255(g) of the National
Housing Act (12 U.S.C. 1715z-20(g)) is amended by striking the first
sentence.
SEC. 113. STUDY OF AUCTION OR BULK REFINANCE PROGRAM.
(a) Study.--The Board of Governors of the Federal Reserve System
(in this section referred to as the ``Board of Governors''), in
consultation with other members of the Oversight Board established by
section 257(a) of the National Housing Act (as added by the amendment
made by section 112(a) of this title), shall conduct a study of the
need for and efficacy of an auction or bulk refinancing mechanism to
facilitate refinancing of existing residential mortgages that are at
risk for foreclosure into mortgages insured under the mortgage
insurance program under title II of the National Housing Act. The study
shall identify and examine various options for mechanisms under which
lenders and servicers of such mortgages may make bids for forward
commitments for such insurance in an expedited manner.
(b) Content.--
(1) Analysis.--The study required under subsection (a)
shall analyze--
(A) the feasibility of establishing a mechanism
that would facilitate the more rapid refinancing of
borrowers at risk of foreclosure into performing
mortgages insured under title II of the National
Housing Act;
(B) whether such a mechanism would provide an
effective and efficient mechanism to reduce
foreclosures on qualified existing mortgages;
(C) whether the use of an auction or bulk refinance
program is necessary to stabilize the housing market
and reduce the impact of turmoil in that market on the
economy of the United States;
(D) whether there are other mechanisms or authority
that would be useful to reduce foreclosure; and
(E) and any other factors that the Board of
Governors considers relevant.
(2) Determinations.--To the extent that the Board of
Governors finds that a facility of the type described in
paragraph (1) is feasible and useful, the study shall--
(A) determine and identify any additional authority
or resources needed to establish and operate such a
mechanism;
(B) determine whether there is a need for
additional authority with respect to the loan
underwriting criteria included in the amendment made by
section 112(a) of this title or with respect to
eligibility of participating borrowers, lenders, or
holders of liens;
(C) determine whether such underwriting criteria
should be established on the basis of individual loans,
in the aggregate, or otherwise to facilitate the goal
of refinancing borrowers at risk of foreclosure into
viable loans insured under the National Housing Act.
(c) Report.--Not later than the expiration of the 60-day period
beginning on the date of the enactment of this Act, the Board of
Governors shall submit a report regarding the results of the study
conducted under this section to the Committee on Financial Services of
the House of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate. The report shall include a detailed
description of the analysis required under subsection (b)(1) and of the
determinations made pursuant to subsection (b)(2), and shall include
any other findings and recommendations of the Board of Governors
pursuant to the study, including identifying various options for
mechanisms described in subsection (a).
SEC. 114. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT FOR
CERTAIN HOUSING LOANS GUARANTEED BY SECRETARY OF VETERANS
AFFAIRS.
Notwithstanding subparagraph (C) of section 3703(a)(1) of title 38,
United States Code, for purposes of any loan described in subparagraph
(A)(i)(IV) of such section that is originated during the period
beginning on the date of the enactment of this Act and ending on
December 31, 2008, the term ``maximum guaranty amount'' shall mean an
amount equal to 25 percent of the higher of--
(1) the limitation determined under section 305(a)(2) of
the Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)(2)) for the calendar year in which the loan is
originated for a single-family residence; or
(2) 125 percent of the area median price for a single-
family residence, but in no case to exceed 175 percent of the
limitation determined under such section 305(a)(2) for the
calendar year in which the loan is originated for a single-
family residence.
SEC. 115. STUDY OF POSSIBLE ACCOUNTING REVISIONS RELATING TO PROPERTY
AT RISK OF FORECLOSURE AND THE AVAILABILITY OF CREDIT FOR
REFINANCING HOME MORTGAGES AT RISK OF FORECLOSURE.
(a) Study Required.--The Securities and Exchange Commission, in
consultation with the Board of Governors of the Federal Reserve System,
shall conduct a study on fair value accounting standards applicable to
financial institutions, including depository institutions, with respect
to their residential mortgages that are at risk of foreclosure and
mortgage-backed securities involving such mortgages, the effects of
such accounting standards on a financial institution's balance sheet
and capacity to provide refinancing to residential mortgagors that are
at risk of foreclosure and to residential mortgagors during periods of
market value declines and increased foreclosures, and the advisability
and feasibility of modifications of such standards during periods of
market fluctuation in order to maintain the ability of the institution
to continue to carry mortgages on residential property at risk of
foreclosure and assure the availability of credit to refinance at-risk
residential mortgages.
(b) Report Required.--The Securities and Exchange Commission shall
submit a report to the Congress before the end of the 90-day period
beginning on the date of the enactment of this Act containing the
findings and determinations of the Commission with respect to the study
conducted under subsection (a) and such administrative and legislative
recommendations as the Commission may determine to be appropriate.
SEC. 116. GAO STUDY OF THE EFFECT OF TIGHTENING CREDIT MARKETS IN
COMMUNITIES AFFECTED BY THE SUBPRIME MORTGAGE FORECLOSURE
CRISES AND PREDATORY LENDING ON PROSPECTIVE FIRST-TIME
HOMEBUYERS SEEKING MORTGAGES.
The Comptroller General of the United States shall conduct a study
to analyze the effects of tightening credit markets on prospective
first-time home buyers who reside in selected communities that have
been most detrimentally affected by both the current subprime mortgage
foreclosure crisis and predatory mortgage lending. Such study shall
also analyze the adequacy of financial literacy outreach efforts by
agencies of the Federal Government tasked with implementing financial
literacy education in such communities and shall assess whether the
current funding levels for such efforts are at sufficient levels to
reduce the levels of subprime mortgage delinquencies and foreclosures
and to increase the level of financial literacy in the selected
communities so as to minimize the incidences of predatory mortgage
lending. Not later than the expiration of the 6-month period beginning
on the date of the enactment of this Act, the Comptroller General shall
submit a report to the Congress setting forth the results of the study
and including recommendations regarding such funding levels.
Subtitle B--Office of Housing Counseling
SEC. 131. SHORT TITLE.
This subtitle may be cited as the ``Expand and Preserve Home
Ownership Through Counseling Act''.
SEC. 132. ESTABLISHMENT OF OFFICE OF HOUSING COUNSELING.
Section 4 of the Department of Housing and Urban Development Act
(42 U.S.C. 3533) is amended by adding at the end the following new
subsection:
``(g) Office of Housing Counseling.--
``(1) Establishment.--There is established, in the Office
of the Secretary, the Office of Housing Counseling.
``(2) Director.--There is established the position of
Director of Housing Counseling. The Director shall be the head
of the Office of Housing Counseling and shall be appointed by
the Secretary. Such position shall be a career-reserved
position in the Senior Executive Service.
``(3) Functions.--
``(A) In general.--The Director shall have ultimate
responsibility within the Department, except for the
Secretary, for all activities and matters relating to
homeownership counseling and rental housing counseling,
including--
``(i) research, grant administration,
public outreach, and policy development
relating to such counseling; and
``(ii) establishment, coordination, and
administration of all regulations,
requirements, standards, and performance
measures under programs and laws administered
by the Department that relate to housing
counseling, homeownership counseling (including
maintenance of homes), mortgage-related
counseling (including home equity conversion
mortgages and credit protection options to
avoid foreclosure), and rental housing
counseling, including the requirements,
standards, and performance measures relating to
housing counseling.
``(B) Specific functions.--The Director shall carry
out the functions assigned to the Director and the
Office under this section and any other provisions of
law. Such functions shall include establishing rules
necessary for--
``(i) the counseling procedures under
section 106(g)(1) of the Housing and Urban
Development Act of 1968 (12 U.S.C.
1701x(h)(1));
``(ii) carrying out all other functions of
the Secretary under section 106(g) of the
Housing and Urban Development Act of 1968,
including the establishment, operation, and
publication of the availability of the toll-
free telephone number under paragraph (2) of
such section;
``(iii) carrying out section 5 of the Real
Estate Settlement Procedures Act of 1974 (12
U.S.C. 2604) for home buying information
booklets prepared pursuant to such section;
``(iv) carrying out the certification
program under section 106(e) of the Housing and
Urban Development Act of 1968 (12 U.S.C.
1701x(e));
``(v) carrying out the assistance program
under section 106(a)(4) of the Housing and
Urban Development Act of 1968, including
criteria for selection of applications to
receive assistance;
``(vi) carrying out any functions regarding
abusive, deceptive, or unscrupulous lending
practices relating to residential mortgage
loans that the Secretary considers appropriate,
which shall include conducting the study under
section 136 of the Expand and Preserve Home
Ownership Through Counseling Act;
``(vii) providing for operation of the
advisory committee established under paragraph
(4) of this subsection;
``(viii) collaborating with community-based
organizations with expertise in the field of
housing counseling; and
``(ix) providing for the building of
capacity to provide housing counseling services
in areas that lack sufficient services.
``(4) Advisory committee.--
``(A) In general.--The Secretary shall appoint an
advisory committee to provide advice regarding the
carrying out of the functions of the Director.
``(B) Members.--Such advisory committee shall
consist of not more than 12 individuals, and the
membership of the committee shall equally represent all
aspects of the mortgage and real estate industry,
including consumers.
``(C) Terms.--Except as provided in subparagraph
(D), each member of the advisory committee shall be
appointed for a term of 3 years. Members may be
reappointed at the discretion of the Secretary.
``(D) Terms of initial appointees.--As designated
by the Secretary at the time of appointment, of the
members first appointed to the advisory committee, 4
shall be appointed for a term of 1 year and 4 shall be
appointed for a term of 2 years.
``(E) Prohibition of pay; travel expenses.--Members
of the advisory committee shall serve without pay, but
shall receive travel expenses, including per diem in
lieu of subsistence, in accordance with applicable
provisions under subchapter I of chapter 57 of title 5,
United States Code.
``(F) Advisory role only.--The advisory committee
shall have no role in reviewing or awarding housing
counseling grants.
``(5) Scope of homeownership counseling.--In carrying out
the responsibilities of the Director, the Director shall ensure
that homeownership counseling provided by, in connection with,
or pursuant to any function, activity, or program of the
Department addresses the entire process of homeownership,
including the decision to purchase a home, the selection and
purchase of a home, issues arising during or affecting the
period of ownership of a home (including refinancing, default
and foreclosure, and other financial decisions), and the sale
or other disposition of a home.''.
SEC. 133. COUNSELING PROCEDURES.
(a) In General.--Section 106 of the Housing and Urban Development
Act of 1968 (12 U.S.C. 1701x) is amended by adding at the end the
following new subsection:
``(g) Procedures and Activities.--
``(1) Counseling procedures.--
``(A) In general.--The Secretary shall establish,
coordinate, and monitor the administration by the
Department of Housing and Urban Development of the
counseling procedures for homeownership counseling and
rental housing counseling provided in connection with
any program of the Department, including all
requirements, standards, and performance measures that
relate to homeownership and rental housing counseling.
``(B) Homeownership counseling.--For purposes of
this subsection and as used in the provisions referred
to in this subparagraph, the term `homeownership
counseling' means counseling related to homeownership
and residential mortgage loans. Such term includes
counseling related to homeownership and residential
mortgage loans that is provided pursuant to--
``(i) section 105(a)(20) of the Housing and
Community Development Act of 1974 (42 U.S.C.
5305(a)(20));
``(ii) in the United States Housing Act of
1937--
``(I) section 9(e) (42 U.S.C.
1437g(e));
``(II) section 8(y)(1)(D) (42
U.S.C. 1437f(y)(1)(D));
``(III) section 18(a)(4)(D) (42
U.S.C. 1437p(a)(4)(D));
``(IV) section 23(c)(4) (42 U.S.C.
1437u(c)(4));
``(V) section 32(e)(4) (42 U.S.C.
1437z-4(e)(4));
``(VI) section 33(d)(2)(B) (42
U.S.C. 1437z-5(d)(2)(B));
``(VII) sections 302(b)(6) and
303(b)(7) (42 U.S.C. 1437aaa-1(b)(6),
1437aaa-2(b)(7)); and
``(VIII) section 304(c)(4) (42
U.S.C. 1437aaa-3(c)(4));
``(iii) section 302(a)(4) of the American
Homeownership and Economic Opportunity Act of
2000 (42 U.S.C. 1437f note);
``(iv) sections 233(b)(2) and 258(b) of the
Cranston-Gonzalez National Affordable Housing
Act (42 U.S.C. 12773(b)(2), 12808(b));
``(v) this section and section 101(e) of
the Housing and Urban Development Act of 1968
(12 U.S.C. 1701x, 1701w(e));
``(vi) section 220(d)(2)(G) of the Low-
Income Housing Preservation and Resident
Homeownership Act of 1990 (12 U.S.C.
4110(d)(2)(G));
``(vii) sections 422(b)(6), 423(b)(7),
424(c)(4), 442(b)(6), and 443(b)(6) of the
Cranston-Gonzalez National Affordable Housing
Act (42 U.S.C. 12872(b)(6), 12873(b)(7),
12874(c)(4), 12892(b)(6), and 12893(b)(6));
``(viii) section 491(b)(1)(F)(iii) of the
McKinney-Vento Homeless Assistance Act (42
U.S.C. 11408(b)(1)(F)(iii));
``(ix) sections 202(3) and 810(b)(2)(A) of
the Native American Housing and Self-
Determination Act of 1996 (25 U.S.C. 4132(3),
4229(b)(2)(A));
``(x) in the National Housing Act--
``(I) in section 203 (12 U.S.C.
1709), the penultimate undesignated
paragraph of paragraph (2) of
subsection (b), subsection (c)(2)(A),
and subsection (r)(4);
``(II) subsections (a) and (c)(3)
of section 237 (12 U.S.C. 1715z-2); and
``(III) subsections (d)(2)(B) and
(m)(1) of section 255 (12 U.S.C. 1715z-
20);
``(xi) section 502(h)(4)(B) of the Housing
Act of 1949 (42 U.S.C. 1472(h)(4)(B)); and
``(xii) section 508 of the Housing and
Urban Development Act of 1970 (12 U.S.C. 1701z-
7).
``(C) Rental housing counseling.--For purposes of
this subsection, the term `rental housing counseling'
means counseling related to rental of residential
property, which may include counseling regarding future
homeownership opportunities and providing referrals for
renters and prospective renters to entities providing
counseling and shall include counseling related to such
topics that is provided pursuant to--
``(i) section 105(a)(20) of the Housing and
Community Development Act of 1974 (42 U.S.C.
5305(a)(20));
``(ii) in the United States Housing Act of
1937--
``(I) section 9(e) (42 U.S.C.
1437g(e));
``(II) section 18(a)(4)(D) (42
U.S.C. 1437p(a)(4)(D));
``(III) section 23(c)(4) (42 U.S.C.
1437u(c)(4));
``(IV) section 32(e)(4) (42 U.S.C.
1437z-4(e)(4));
``(V) section 33(d)(2)(B) (42
U.S.C. 1437z-5(d)(2)(B)); and
``(VI) section 302(b)(6) (42 U.S.C.
1437aaa-1(b)(6));
``(iii) section 233(b)(2) of the Cranston-
Gonzalez National Affordable Housing Act (42
U.S.C. 12773(b)(2));
``(iv) section 106 of the Housing and Urban
Development Act of 1968 (12 U.S.C. 1701x);
``(v) section 422(b)(6) of the Cranston-
Gonzalez National Affordable Housing Act (42
U.S.C. 12872(b)(6));
``(vi) section 491(b)(1)(F)(iii) of the
McKinney-Vento Homeless Assistance Act (42
U.S.C. 11408(b)(1)(F)(iii));
``(vii) sections 202(3) and 810(b)(2)(A) of
the Native American Housing and Self-
Determination Act of 1996 (25 U.S.C. 4132(3),
4229(b)(2)(A)); and
``(viii) the rental assistance program
under section 8 of the United States Housing
Act of 1937 (42 U.S.C. 1437f).
``(2) Standards for materials.--The Secretary, in
conjunction with the advisory committee established under
subsection (g)(4) of the Department of Housing and Urban
Development Act, shall establish standards for materials and
forms to be used, as appropriate, by organizations providing
homeownership counseling services, including any recipients of
assistance pursuant to subsection (a)(4).
``(3) Mortgage software systems.--
``(A) Certification.--The Secretary shall provide
for the certification of various computer software
programs for consumers to use in evaluating different
residential mortgage loan proposals. The Secretary
shall require, for such certification, that the
mortgage software systems take into account--
``(i) the consumer's financial situation
and the cost of maintaining a home, including
insurance, taxes, and utilities;
``(ii) the amount of time the consumer
expects to remain in the home or expected time
to maturity of the loan;
``(iii) such other factors as the Secretary
considers appropriate to assist the consumer in
evaluating whether to pay points, to lock in an
interest rate, to select an adjustable or fixed
rate loan, to select a conventional or
government-insured or guaranteed loan and to
make other choices during the loan application
process.
If the Secretary determines that available existing
software is inadequate to assist consumers during the
residential mortgage loan application process, the
Secretary shall arrange for the development by private
sector software companies of new mortgage software
systems that meet the Secretary's specifications.
``(B) Use and initial availability.--Such certified
computer software programs shall be used to supplement,
not replace, housing counseling. The Secretary shall
provide that such programs are initially used only in
connection with the assistance of housing counselors
certified pursuant to subsection (e).
``(C) Availability.--After a period of initial
availability under subparagraph (B) as the Secretary
considers appropriate, the Secretary shall take
reasonable steps to make mortgage software systems
certified pursuant to this paragraph widely available
through the Internet and at public locations, including
public libraries, senior-citizen centers, public
housing sites, offices of public housing agencies that
administer rental housing assistance vouchers, and
housing counseling centers.
``(4) National public service multimedia campaigns to
promote housing counseling.--
``(A) In general.--The Director of Housing
Counseling shall develop, implement, and conduct
national public service multimedia campaigns designed
to make persons facing mortgage foreclosure, persons
considering a subprime mortgage loan to purchase a
home, elderly persons, persons who face language
barriers, low-income persons, and other potentially
vulnerable consumers aware that it is advisable, before
seeking or maintaining a residential mortgage loan, to
obtain homeownership counseling from an unbiased and
reliable sources and that such homeownership counseling
is available, including through programs sponsored by
the Secretary of Housing and Urban Development.
``(B) Contact information.--Each segment of the
multimedia campaign under subparagraph (A) shall
publicize the toll-free telephone number and web site
of the Department of Housing and Urban Development
through which persons seeking housing counseling can
locate a housing counseling agency in their State that
is certified by the Secretary of Housing and Urban
Development and can provide advice on buying a home,
renting, defaults, foreclosures, credit issues, and
reverse mortgages.
``(C) Authorization of appropriations.--There are
authorized to be appropriated to the Secretary, not to
exceed $3,000,000 for fiscal years 2008, 2009, and
2010, for the develop, implement, and conduct of
national public service multimedia campaigns under this
paragraph.
``(5) Education programs.--The Secretary shall provide
advice and technical assistance to States, units of general
local government, and nonprofit organizations regarding the
establishment and operation of, including assistance with the
development of content and materials for, educational programs
to inform and educate consumers, particularly those most
vulnerable with respect to residential mortgage loans (such as
elderly persons, persons facing language barriers, low-income
persons, and other potentially vulnerable consumers), regarding
home mortgages, mortgage refinancing, home equity loans, and
home repair loans.''.
(b) Conforming Amendments to Grant Program for Homeownership
Counseling Organizations.--Section 106(c)(5)(A)(ii) of the Housing and
Urban Development Act of 1968 (12 U.S.C. 1701x(c)(5)(A)(ii)) is
amended--
(1) in subclause (III), by striking ``and'' at the end;
(2) in subclause (IV) by striking the period at the end and
inserting ``; and''; and
(3) by inserting after subclause (IV) the following new
subclause:
``(V) notify the housing or
mortgage applicant of the availability
of mortgage software systems provided
pursuant to subsection (g)(3).''.
SEC. 134. GRANTS FOR HOUSING COUNSELING ASSISTANCE.
Section 106(a) of the Housing and Urban Development Act of 1968 (12
U.S.C. 1701x(a)(3)) is amended by adding at the end the following new
paragraph:
``(4) Homeownership and Rental Counseling Assistance.--
``(A) In general.--The Secretary shall make financial
assistance available under this paragraph to States, units of
general local governments, and nonprofit organizations
providing homeownership or rental counseling (as such terms are
defined in subsection (g)(1)).
``(B) Qualified entities.--The Secretary shall establish
standards and guidelines for eligibility of organizations
(including governmental and nonprofit organizations) to receive
assistance under this paragraph.
``(C) Distribution.--Assistance made available under this
paragraph shall be distributed in a manner that encourages
efficient and successful counseling programs.
``(D) Authorization of appropriations.--There are
authorized to be appropriated $45,000,000 for each of fiscal
years 2008 through 2011 for--
``(i) the operations of the Office of Housing
Counseling of the Department of Housing and Urban
Development;
``(ii) the responsibilities of the Secretary under
paragraphs (2) through (5) of subsection (g); and
``(iii) assistance pursuant to this paragraph for
entities providing homeownership and rental
counseling.''.
SEC. 135. REQUIREMENTS TO USE HUD-CERTIFIED COUNSELORS UNDER HUD
PROGRAMS.
Section 106(e) of the Housing and Urban Development Act of 1968 (12
U.S.C. 1701x(e)) is amended--
(1) by striking paragraph (1) and inserting the following
new paragraph:
``(1) Requirement for assistance.--An organization may not
receive assistance for counseling activities under subsection
(a)(1)(iii), (a)(2), (a)(4), (c), or (d) of this section, or
under section 101(e), unless the organization, or the
individuals through which the organization provides such
counseling, has been certified by the Secretary under this
subsection as competent to provide such counseling.'';
(2) in paragraph (2)--
(A) by inserting ``and for certifying
organizations'' before the period at the end of the
first sentence; and
(B) in the second sentence by striking ``for
certification'' and inserting ``, for certification of
an organization, that each individual through which the
organization provides counseling shall demonstrate,
and, for certification of an individual,'';
(3) in paragraph (3), by inserting ``organizations and''
before ``individuals'';
(4) by redesignating paragraph (3) as paragraph (5); and
(5) by inserting after paragraph (2) the following new
paragraphs:
``(3) Requirement under hud programs.--Any homeownership
counseling or rental housing counseling (as such terms are
defined in subsection (g)(1)) required under, or provided in
connection with, any program administered by the Department of
Housing and Urban Development shall be provided only by
organizations or counselors certified by the Secretary under
this subsection as competent to provide such counseling.
``(4) Outreach.--The Secretary shall take such actions as
the Secretary considers appropriate to ensure that individuals
and organizations providing homeownership or rental housing
counseling are aware of the certification requirements and
standards of this subsection and of the training and
certification programs under subsection (f).''.
SEC. 136. STUDY OF DEFAULTS AND FORECLOSURES.
The Secretary of Housing and Urban Development shall conduct an
extensive study of the root causes of default and foreclosure of home
loans, using as much empirical data as are available. The study shall
also examine the role of escrow accounts in helping prime and nonprime
borrowers to avoid defaults and foreclosures. Not later than 12 months
after the date of the enactment of this Act, the Secretary shall submit
to the Congress a preliminary report regarding the study. Not later
than 24 months after such date of enactment, the Secretary shall submit
a final report regarding the results of the study, which shall include
any recommended legislation relating to the study, and recommendations
for best practices and for a process to identify populations that need
counseling the most.
SEC. 137. DEFINITIONS FOR COUNSELING-RELATED PROGRAMS.
Section 106 of the Housing and Urban Development Act of 1968 (12
U.S.C. 1701x), as amended by the preceding provisions of this subtitle,
is further amended by adding at the end the following new subsection:
``(h) Definitions.--For purposes of this section:
``(1) Nonprofit organization.--The term `nonprofit
organization' has the meaning given such term in section 104(5)
of the Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12704(5)), except that subparagraph (D) of such section
shall not apply for purposes of this section.
``(2) State.--The term `State' means each of the several
States, the Commonwealth of Puerto Rico, the District of
Columbia, the Commonwealth of the Northern Mariana Islands,
Guam, the Virgin Islands, American Samoa, the Trust Territories
of the Pacific, or any other possession of the United States.
``(3) Unit of general local government.--The term `unit of
general local government' means any city, county, parish, town,
township, borough, village, or other general purpose political
subdivision of a State.''.
SEC. 138. UPDATING AND SIMPLIFICATION OF MORTGAGE INFORMATION BOOKLET.
Section 5 of the Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2604) is amended--
(1) in the section heading, by striking ``special'' and
inserting ``home buying'';
(2) by striking subsections (a) and (b) and inserting the
following new subsections:
``(a) Preparation and Distribution.--The Secretary shall prepare,
at least once every 5 years, a booklet to help consumers applying for
federally related mortgage loans to understand the nature and costs of
real estate settlement services. The Secretary shall prepare the
booklet in various languages and cultural styles, as the Secretary
determines to be appropriate, so that the booklet is understandable and
accessible to homebuyers of different ethnic and cultural backgrounds.
The Secretary shall distribute such booklets to all lenders that make
federally related mortgage loans. The Secretary shall also distribute
to such lenders lists, organized by location, of homeownership
counselors certified under section 106(e) of the Housing and Urban
Development Act of 1968 (12 U.S.C. 1701x(e)) for use in complying with
the requirement under subsection (c) of this section.
``(b) Contents.--Each booklet shall be in such form and detail as
the Secretary shall prescribe and, in addition to such other
information as the Secretary may provide, shall include in plain and
understandable language the following information:
``(1) A description and explanation of the nature and
purpose of the costs incident to a real estate settlement or a
federally related mortgage loan. The description and
explanation shall provide general information about the
mortgage process as well as specific information concerning, at
a minimum--
``(A) balloon payments;
``(B) prepayment penalties; and
``(C) the trade-off between closing costs and the
interest rate over the life of the loan.
``(2) An explanation and sample of the uniform settlement
statement required by section 4.
``(3) A list and explanation of lending practices,
including those prohibited by the Truth in Lending Act or other
applicable Federal law, and of other unfair practices and
unreasonable or unnecessary charges to be avoided by the
prospective buyer with respect to a real estate settlement.
``(4) A list and explanation of questions a consumer
obtaining a federally related mortgage loan should ask
regarding the loan, including whether the consumer will have
the ability to repay the loan, whether the consumer
sufficiently shopped for the loan, whether the loan terms
include prepayment penalties or balloon payments, and whether
the loan will benefit the borrower.
``(5) An explanation of the right of rescission as to
certain transactions provided by sections 125 and 129 of the
Truth in Lending Act.
``(6) A brief explanation of the nature of a variable rate
mortgage and a reference to the booklet entitled `Consumer
Handbook on Adjustable Rate Mortgages', published by the Board
of Governors of the Federal Reserve System pursuant to section
226.19(b)(1) of title 12, Code of Federal Regulations, or to
any suitable substitute of such booklet that such Board of
Governors may subsequently adopt pursuant to such section.
``(7) A brief explanation of the nature of a home equity
line of credit and a reference to the pamphlet required to be
provided under section 127A of the Truth in Lending Act.
``(8) Information about homeownership counseling services
made available pursuant to section 106(a)(4) of the Housing and
Urban Development Act of 1968 (12 U.S.C. 1701x(a)(4)), a
recommendation that the consumer use such services, and
notification that a list of certified providers of
homeownership counseling in the area, and their contact
information, is available.
``(9) An explanation of the nature and purpose of escrow
accounts when used in connection with loans secured by
residential real estate and the requirements under section 10
of this Act regarding such accounts.
``(10) An explanation of the choices available to buyers of
residential real estate in selecting persons to provide
necessary services incidental to a real estate settlement.
``(11) An explanation of a consumer's responsibilities,
liabilities, and obligations in a mortgage transaction.
``(12) An explanation of the nature and purpose of real
estate appraisals, including the difference between an
appraisal and a home inspection.
``(13) Notice that the Office of Housing of the Department
of Housing and Urban Development has made publicly available a
brochure regarding loan fraud and a World Wide Web address and
toll-free telephone number for obtaining the brochure.
The booklet prepared pursuant to this section shall take into
consideration differences in real estate settlement procedures that may
exist among the several States and territories of the United States and
among separate political subdivisions within the same State and
territory.'';
(3) in subsection (c), by inserting at the end the
following new sentence: ``Each lender shall also include with
the booklet a reasonably complete or updated list of
homeownership counselors who are certified pursuant to section
106(e) of the Housing and Urban Development Act of 1968 (12
U.S.C. 1701x(e)) and located in the area of the lender.''; and
(4) in subsection (d), by inserting after the period at the
end of the first sentence the following: ``The lender shall
provide the HUD-issued booklet in the version that is most
appropriate for the person receiving it.''.
Subtitle C--Combating Mortgage Fraud
SEC. 151. AUTHORIZATION OF APPROPRIATIONS TO COMBAT MORTGAGE FRAUD.
For fiscal years 2008, 2009, 2010, 2011, and 2012, there are
authorized to be appropriated to the Attorney General a total of--
(1) $31,250,000 to support the employment of 30 additional
agents of the Federal Bureau of Investigation and 2 additional
dedicated prosecutors at the Department of Justice to
coordinate prosecution of mortgage fraud efforts with the
offices of the United States Attorneys; and
(2) $750,000 to support the operations of interagency task
forces of the Federal Bureau of Investigation in the areas with
the 15 highest concentrations of mortgage fraud.
TITLE II--FHA REFORM AND MANUFACTURED HOUSING LOAN INSURANCE
MODERNIZATION
Subtitle A--FHA Reform
SEC. 201. SHORT TITLE.
This subtitle may be cited as the ``Expanding American
Homeownership Act of 2008''.
SEC. 202. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) one of the primary missions of the Federal Housing
Administration (FHA) single family mortgage insurance program
is to reach borrowers who are underserved, or not served, by
the existing conventional mortgage marketplace;
(2) the FHA program has a long history of innovation, which
includes pioneering the 30-year self-amortizing mortgage and a
safe-to-seniors reverse mortgage product, both of which were
once thought too risky to private lenders;
(3) the FHA single family mortgage insurance program
traditionally has been a major provider of mortgage insurance
for home purchases;
(4) the FHA mortgage insurance premium structure, as well
as FHA's product offerings, should be revised to reflect FHA's
enhanced ability to determine risk at the loan level and to
allow FHA to better respond to changes in the mortgage market;
(5) during past recessions, including the oil-patch
downturns in the mid-1980s, FHA remained a viable credit
enhancer and was therefore instrumental in preventing a more
catastrophic collapse in housing markets and a greater loss of
homeowner equity; and
(6) as housing price appreciation slows and interest rates
rise, many homeowners and prospective homebuyers will need the
less-expensive, safer financing alternative that FHA mortgage
insurance provides.
(b) Purposes.--The purposes of this subtitle are--
(1) to provide flexibility to FHA to allow for the
insurance of housing loans for low- and moderate-income
homebuyers during all economic cycles in the mortgage market;
(2) to modernize the FHA single family mortgage insurance
program by making it more reflective of enhancements to loan-
level risk assessments and changes to the mortgage market; and
(3) to adjust the loan limits for the single family
mortgage insurance program to reflect rising house prices and
the increased costs associated with new construction.
SEC. 203. MAXIMUM PRINCIPAL LOAN OBLIGATION.
(a) In General.--Section 203(b)(2) of the National Housing Act (12
U.S.C. 1709(b)(2)(A)) is amended by striking subparagraph (A) and
inserting the following new subparagraph:
``(A) not to exceed the lesser of--
``(i) in the case of a 1-family residence,
125 percent of the median 1-family house price
in the area, as determined by the Secretary;
and in the case of a 2-, 3-, or 4-family
residence, the percentage of such median price
that bears the same ratio to such median price
as the dollar amount limitation determined
under section 305(a)(2) of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C.
1454(a)(2)) for a 2-, 3-, or 4-family
residence, respectively, bears to the dollar
amount limitation determined under such section
for a 1-family residence; or
``(ii) 175 percent of the dollar amount
limitation determined under such section
305(a)(2)(A) for a residence of the applicable
size (without regard to any authority to
increase such limitations with respect to
properties located in Alaska, Guam, Hawaii, or
the Virgin Islands and without regard to the
high-cost area limitation under such section
305(a)(2)(B));
except that the dollar amount limitation in effect
under this subparagraph for any size residence for any
area may not be less than the greater of: (I) the
dollar amount limitation in effect under this section
for the area on October 21, 1998; or (II) 65 percent of
the dollar amount limitation determined under such
section 305(a)(2) for a residence of the applicable
size; and except that, if the Secretary determines that
market conditions warrant such an increase, the
Secretary may, for such period as the Secretary
considers appropriate, increase the maximum dollar
amount limitation determined pursuant to the preceding
provisions of this subparagraph with respect to any
particular size or sizes of residences, or with respect
to residences located in any particular area or areas,
to an amount that does not exceed the maximum dollar
amount then otherwise in effect pursuant to the
preceding provisions of this subparagraph for such size
residence, or for such area (if applicable), by not
more than $100,000; and''.
(b) Treatment of Temporary Loan Limit Increase.--Subsection (a) and
the amendment made by such subsection may not be construed to in any
way affect the effectiveness of section 202 of the Economic Stimulus
Act of 2008 (Public Law 110-185; 122 Stat. 620).
SEC. 204. EXTENSION OF MORTGAGE TERM.
Paragraph (3) of section 203(b) of the National Housing Act (12
U.S.C. 1709(b)(3)) is amended--
(1) by striking ``thirty-five years'' and inserting ``forty
years''; and
(2) by striking ``(or thirty years if such mortgage is not
approved for insurance prior to construction)''.
SEC. 205. DOWNPAYMENT SIMPLIFICATION.
Section 203(b) of the National Housing Act (12 U.S.C. 1709(b)) is
amended--
(1) in paragraph (2)--
(A) by striking subparagraph (B) and inserting the
following new subparagraph:
``(B) not to exceed an amount equal to the sum of--
``(i) the amount of the mortgage premium
paid at the time the mortgage is insured; and
``(ii) 97.75 percent of the appraised value
of the property.'';
(B) in the matter after and below subparagraph (B),
by striking the second sentence (relating to a
definition of ``average closing cost'') and all that
follows through ``title 38, United States Code.''; and
(C) by striking the last undesignated paragraph
(relating to counseling with respect to the
responsibilities and financial management involved in
homeownership); and
(2) in paragraph (9)--
(A) by striking the paragraph designation and all
that follows through ``Provided further, That for'' and
inserting the following:
``(9) Be executed by a mortgagor who shall have paid on
account of the property, in cash or its equivalent, at least 3
percent of the Secretary's estimate of the cost of acquisition
(excluding the mortgage insurance premium paid at the time the
mortgage is insured). For''; and
(B) by inserting after the period at the end the
following: ``For purposes of this paragraph, the
Secretary shall consider as cash or its equivalent any
amounts gifted by a family member (as such term is
defined in section 201), the mortgagor's employer or
labor union, or a qualified homeownership assistance
entity, but only if there is no obligation on the part
of the mortgagor to repay the gift: For purposes of the
preceding sentence, the term `qualified homeownership
assistance entity' means any governmental agency or
charity that has a program to provide homeownership
assistance to low- and moderate-income families or
first-time home buyers, or any private nonprofit
organization that has such a program and evidences
sufficient fiscal soundness to protect the fiscal
integrity of the Mutual Mortgage Insurance Fund by
maintaining a minimum net worth of $4,000,000 of
acceptable assets.''.
SEC. 206. MORTGAGE INSURANCE PREMIUMS FOR QUALIFIED HOMEOWNERSHIP
ASSISTANCE ENTITIES AND HIGHER-RISK BORROWERS.
Paragraph (2) of section 203(c) of the National Housing Act (12
U.S.C. 1709(c)(2)) is amended--
(1) in subparagraph (A), in the matter preceding
subparagraph (A), by striking the first comma after ``section
234(c)'';
(2) in subparagraph (A), by inserting after the period at
the end of the second sentence the following: ``In the case of
a mortgage for which any amounts gifted by a qualified
homeownership assistance entity (as such term is defined in
paragraph (9) of subsection (b)) that is a private nonprofit
organization are treated as cash or its equivalent for purposes
of meeting the 3 percent requirement under such paragraph, the
premium payment under this subparagraph shall not exceed 3.0
percent of the amount of the original insured principal
obligation of the mortgage.''; and
(3) by adding at the end the following new subparagraph:
``(C) Higher-risk borrowers.--The Secretary shall establish
underwriting standards that provide for insurance under this
section of mortgages described in the matter in this paragraph
preceding subparagraph (A) for which the mortgagor has a credit
score equivalent to a FICO score of less than 560, and may
insure, and make commitments to insure, such mortgages. Such
underwriting standards shall include establishing and
collecting premium payments that comply with the requirements
of this paragraph, except that notwithstanding subparagraph
(A), the single premium payment collected at the time of
insurance may be established in an amount that does not exceed
3.0 percent of the amount of the original insured principal
obligation of the mortgage.''.
SEC. 207. RISK-BASED MORTGAGE INSURANCE PREMIUMS.
Section 203(c) of the National Housing Act (12 U.S.C. 1709(c)), as
amended by the preceding provisions of this subtitle, is further
amended by adding at the end the following new paragraphs:
``(4) Flexible Risk-Based Premiums.--In the case of a mortgage
referred to in paragraph (2)(C) or a mortgage described in the third
sentence of subparagraph (A) of paragraph (2) (relating to mortgages
for which amounts are gifted by a nonprofit qualified homeownership
assistance entity), for which the loan application is received by the
mortgagee on or after the date of the enactment of the Expanding
American Homeownership Act of 2008:
``(A) In general.--The Secretary may establish a mortgage
insurance premium structure involving a single premium payment
collected prior to the insurance of the mortgage or annual
payments (which may be collected on a periodic basis), or both,
subject to the requirements of subparagraph (B) and paragraph
(5). Under such structure, the rate of premiums for such a
mortgage may vary according to the credit risk associated with
the mortgage and the rate of any annual premium for such a
mortgage may vary during the mortgage term as long as the basis
for determining the variable rate is established before the
execution of the mortgage. The Secretary may change a premium
structure established under this subclause but only to the
extent that such change is not applied to any mortgage already
executed.
``(B) Establishment and alteration of premium structure.--A
premium structure shall be established or changed under
subparagraph (A) only by providing notice to mortgagees and to
the Congress, at least 30 days before the premium structure is
established or changed.
``(C) Annual report regarding premiums.--The Secretary
shall submit a report to the Congress annually setting forth
the rate structures and rates established and altered pursuant
to this paragraph during the preceding 12-month period and
describing how such rates were determined.
``(5) Considerations for Premium Structure.--When establishing
premiums for mortgages referred to in paragraph (2)(C), establishing
premiums pursuant to paragraph (3), establishing a premium structure
under paragraph (4), and when changing such a premium structure, the
Secretary shall consider the following:
``(A) The effect of the proposed premiums or structure on
the Secretary's ability to meet the operational goals of the
Mutual Mortgage Insurance Fund as provided in section 202(a).
``(B) Underwriting variables.
``(C) The extent to which new pricing under the proposed
premiums or structure has potential for acceptance in the
private market.
``(D) The administrative capability of the Secretary to
administer the proposed premiums or structure.
``(E) The effect of the proposed premiums or structure on
the Secretary's ability to maintain the availability of
mortgage credit and provide stability to mortgage markets.
``(6) Authority to Base Premium Prices on Product Risk.--
``(A) Authority.--In establishing premium rates under
paragraphs (2), (3), and (4), the Secretary may provide for
variations in such rates according to the credit risk
associated with the type of mortgage product that is being
insured under this title, which may include providing that
premium rates differ between fixed-rate mortgages and
adjustable-rate mortgages insured pursuant to section 251,
between mortgages insured pursuant to section 203(b) and
mortgages for condominiums insured pursuant to section 234, and
between such other products as the Secretary considers
appropriate.
``(B) Limitation.--Subparagraph (A) may not be construed to
authorize the Secretary to establish, for any mortgage product,
any mortgage insurance premium rate that does not comply with
the requirements and limitations under paragraphs (2) through
(5).''.
SEC. 208. PAYMENT INCENTIVES FOR HIGHER-RISK BORROWERS.
Section 203(c) of the National Housing Act (12 U.S.C. 1709(c)), as
amended by the preceding provisions of this subtitle, is further
amended by adding at the end the following new paragraph:
``(7) Payment Incentives.--
``(A) Authority.--With respect to mortgages referred to in
paragraph (2)(C):
``(i) Discretionary 3-year payment incentive.--The
Secretary may provide, in the discretion of the
Secretary, that the payment incentive under
subparagraph (B) shall apply upon the expiration of the
3-year period beginning upon the time of insurance of
such a mortgage.
``(ii) Mandatory 5-year payment incentive.--The
Secretary shall provide that the payment incentive
under subparagraph (B) applies upon the expiration of
the 5-year period beginning upon the time of insurance
of such a mortgage.
``(B) Payment incentive.--In the case of any mortgage to
which the payment incentive under this subparagraph applies,
if, during the period referred to in clause (i) or (ii) of
subparagraph (A), as applicable, all mortgage insurance
premiums for such mortgage have been paid on a timely basis,
upon the expiration of such period the Secretary shall--
``(i) reduce the amount of the annual premium
payments otherwise due thereafter under such mortgage
to an amount that does not exceed the amount of the
annual premium payable at the time of insurance of the
mortgage on a mortgage of the same product type having
the same terms, but for which the mortgagor has a
credit score equivalent to a FICO score of 560 or more;
and
``(ii) refund to the mortgagor, upon payment in
full of the obligation of the mortgage, any amount by
which the single premium payment for such mortgage
collected at the time of insurance exceeded the amount
of the single premium payment chargeable under
paragraph (2)(A) at the time of insurance for a
mortgage of the same product type having the same
terms, but for which the mortgagor has a credit score
equivalent to a FICO score of 560 or more.''.
SEC. 209. PROTECTIONS FOR HIGHER-RISK BORROWERS.
Section 203(b) of the National Housing Act (12 U.S.C. 1709(b)) is
amended by adding at the end the following new paragraph:
``(10) Protections for higher-risk borrowers.--Except as
otherwise specifically provided in this paragraph, in the case
of any mortgage referred to in paragraph (2)(C) of subsection
(c), the following requirements shall apply:
``(A) Disclosures.--
``(i) Required disclosures.--In addition to
any disclosures that are otherwise required by
law or by the Secretary for single family
mortgages, the mortgagee shall disclose to the
mortgagor the following information:
``(I) At application.--At the time
of application for the loan involved in
the mortgage, a list of counseling
agencies, approved by the Secretary, in
the area of the applicant.
``(II) At execution.--At the time
of entering into the mortgage--
``(aa) the terms of the
mandatory 5-year payment
incentive required under
subsection (c)(7)(A)(ii); and
``(bb) a statement that the
mortgagor has a right under
contract to loss mitigation.
``(III) Other information.--Any
other additional information that the
Secretary determines is appropriate to
ensure that the mortgagor has received
timely and accurate information about
the program under paragraph (2)(C) of
subsection (c).
``(ii) Penalties for failure to provide
required disclosures.--The Secretary may
establish and impose appropriate penalties for
failure of a mortgagee to provide any
disclosure required under clause (i).
``(iii) No private right of action.--This
subparagraph shall not create any private right
of action on behalf of the mortgagor.
``(B) Counseling.--
``(i) Requirement.--The Secretary shall
require that the mortgagor shall have received
counseling that complies with the requirements
of this subparagraph.
``(ii) Terms of counseling.--Counseling
under this subparagraph shall be provided--
``(I) prior to closing for the loan
involved in the mortgage;
``(II) by a third party (other than
the mortgagee) who is approved by the
Secretary, with respect to the
responsibilities and financial
management involved in homeownership;
``(III) on an individual basis to
the mortgagor by a representative of
the approved third-party counseling
entity; and
``(IV) in person, to the maximum
extent possible.
``(iii) 2- and 3-family residences.--In the
case of a mortgage involving a 2- or 3-family
residence, counseling under this subparagraph
shall include (in addition to the information
required under clause (iii)) information
regarding real estate property management.
``(C) Notice of foreclosure prevention counseling
availability.--
``(i) Written agreement.--To be eligible
for insurance under this subsection, the
mortgagee shall provide the mortgagor, at the
time of the execution of the mortgage, a
written agreement which shall be signed by the
mortgagor and under which the mortgagee shall
provide notice described in clause (ii) to a
housing counseling entity that has agreed to
provide the notice and counseling required
under clause (iii) and is approved by the
Secretary.
``(ii) Notice to counseling agency.--The
notice described in this clause, with respect
to a mortgage, is notice, provided at the
earliest time practicable after the mortgagor
becomes 60 days delinquent with respect to any
payment due under the mortgage, that the
mortgagor is so delinquent and of how to
contact the mortgagor. Such notice may only be
provided once with respect to each delinquency
period for a mortgage.
``(iii) Notice to mortgagor.--Upon notice
from a mortgagee that a mortgagor is 60 days
delinquent with respect to payments due under
the mortgage, the housing counseling entity
shall at the earliest time practicable notify
the mortgagor of such delinquency, that the
entity makes available foreclosure prevention
counseling that may assist the mortgagor in
resolving the delinquency, and of how to
contact the entity to arrange for such
counseling.
``(iv) Ability to cure.--Failure to provide
the written agreement required under clause (i)
may be corrected by sending such agreement to
the mortgagor not later than the earliest time
practicable after the mortgagor first becomes
60 days delinquent with respect to payments due
under the mortgage. Insurance provided under
this subsection may not be terminated and
penalties for such failure may not be
prospectively or retroactively imposed if such
failure is corrected in accordance with this
clause.
``(v) Penalties for failure to provide
agreement.--The Secretary may establish and
impose appropriate penalties for failure of a
mortgagee to provide the written agreement
required under clause (i).
``(vi) Limitation on liability of
mortgagee.--A mortgagee shall not incur any
liability or penalties for any failure of a
housing counseling entity to provide notice
under clause (iii).
``(vii) No private right of action.--This
subparagraph shall not create any private right
of action on behalf of the mortgagor.
``(viii) Delinquency period.--For purposes
of this subparagraph, the term `delinquency
period' means, with respect to a mortgage, a
period that begins upon the mortgagor becoming
delinquent with respect to payments due under
the mortgage and ends upon the first subsequent
occurrence of such payments under the mortgage
becoming current or the property subject to the
mortgage being foreclosed or otherwise disposed
of.''.
SEC. 210. REFINANCING MORTGAGES.
Section 203 of the National Housing Act (12 U.S.C. 1709) is amended
by inserting after subsection (k) the following new subsection:
``(l) Refinancing Mortgages.--
``(1) Establishment of underwriting standards.--The
Secretary shall establish underwriting standards that provide
for insurance under this title of mortgage loans, and take
actions to facilitate the availability of mortgage loans
insured under this title, for qualified borrowers that are made
for the purpose of paying or prepaying outstanding obligations
under existing mortgages for borrowers that--
``(A) have existing mortgages with adverse terms or
rates, or
``(B) do not have access to mortgages at reasonable
rates and terms for such refinancings due to adverse
market conditions.
``(2) Insurance of mortgages to borrowers in default or at
risk of default.--In facilitating insurance for such mortgages,
the Secretary may insure mortgages to borrowers who are,
currently in default or at imminent risk of being in default,
but only if such loans meet reasonable underwriting standards
established by the Secretary.''.
SEC. 211. ANNUAL REPORTS ON NEW PROGRAMS AND LOSS MITIGATION.
Section 540(b)(2) of the National Housing Act (12 U.S.C. 1735f-
18(b)(2)) is amended, by adding at the end the following new
subparagraphs:
``(C) The rates of default and foreclosure for the
applicable collection period for mortgages insured
pursuant to the program for mortgage insurance under
paragraph (2)(C) of section 203(c).
``(D) Actions taken by the Secretary during the
applicable collection period with respect to loss
mitigation on mortgages insured pursuant to section
203.''.
SEC. 212. INSURANCE FOR SINGLE FAMILY HOMES WITH LICENSED CHILD CARE
FACILITIES.
(a) Definition of Child Care Facility.--Section 201 of the National
Housing Act (12 U.S.C. 1707) is amended by adding at the end the
following new subsection:
``(g) The term `child care facility' means a facility that--
``(A) has as its purpose the care of children who are less
than 12 years of age; and
``(B) is licensed or regulated by the State in which it is
located (or, if there is no State law providing for such
licensing and regulation by the State, by the municipality or
other political subdivision in which the facility is located).
Such term does not include facilities for school-age children primarily
for use during normal school hours.''.
(b) Increase in Maximum Mortgage Amount Limitation.--Paragraph (2)
of section 203(b) of the National Housing Act (12 U.S.C. 1709(b)(2)),
as amended by the preceding provisions of this subtitle, is further
amended by adding at end the following new undesignated paragraph:
``Notwithstanding any other provision of this paragraph,
the amount that may be insured under this section may be
increased by up to 25 percent if such increase is necessary to
account for the increased cost of the residence due to an
increased need of space in the residence for locating and
operating a child care facility (as such term is defined in
section 201) within the residence, but only if a valid license
or certificate of compliance with regulations described in
section 201(g)(2) has been issued for such facility as of the
date of the execution of the mortgage, and only if such
increase in the amount insured is proportional to the amount of
space of such residence that will be used for such facility.''.
SEC. 213. REHABILITATION LOANS.
Subsection (k) of section 203 of the National Housing Act (12
U.S.C. 1709(k)) is amended--
(1) in paragraph (1), by striking ``on'' and all that
follows through ``1978''; and
(2) in paragraph (5)--
(A) by striking ``General Insurance Fund'' the
first place it appears and inserting ``Mutual Mortgage
Insurance Fund''; and
(B) in the second sentence, by striking the comma
and all that follows through ``General Insurance
Fund''.
SEC. 214. DISCRETIONARY ACTION.
The National Housing Act is amended--
(1) in subsection (e) of section 202 (12 U.S.C. 1708(e))--
(A) in paragraph (3)(B), by striking ``section
202(e) of the National Housing Act'' and inserting
``this subsection''; and
(B) by redesignating such subsection as subsection
(f);
(2) by striking paragraph (4) of section 203(s) (12 U.S.C.
1709(s)(4)) and inserting the following new paragraph:
``(4) the Secretary of Agriculture;''; and
(3) by transferring subsection (s) of section 203 (as
amended by paragraph (2) of this section) to section 202,
inserting such subsection after subsection (d) of section 202,
and redesignating such subsection as subsection (e).
SEC. 215. INSURANCE OF CONDOMINIUMS AND MANUFACTURED HOUSING.
(a) In General.--Section 234 of the National Housing Act (12 U.S.C.
1715y) is amended--
(1) in subsection (c)--
(A) in the first sentence--
(i) by striking ``and'' before ``(2)''; and
(ii) by inserting before the period at the
end the following: ``, and (3) the project has
a blanket mortgage insured by the Secretary
under subsection (d)''; and
(B) in clause (B) of the third sentence, by
striking ``thirty-five years'' and inserting ``forty
years''; and
(2) in subsection (g), by striking ``, except that'' and
all that follows and inserting a period.
(b) Definition of Mortgage.--Section 201(a) of the National Housing
Act (12 U.S.C. 1707(a)) is amended--
(1) before `` a first mortgage'' insert ``(A)'';
(2) by striking ``or on a leasehold (1)'' and inserting
``(B) a first mortgage on a leasehold on real estate (i)'';
(3) by striking ``or (2)'' and inserting ``, or (ii)''; and
(4) by inserting before the semicolon the following: ``, or
(C) a first mortgage given to secure the unpaid purchase price
of a fee interest in, or long-term leasehold interest in, real
estate consisting of a one-family unit in a multifamily
project, including a project in which the dwelling units are
attached, or are manufactured housing units, semi-detached, or
detached, and an undivided interest in the common areas and
facilities which serve the project''.
(c) Definition of Real Estate.--Section 201 of the National Housing
Act (12 U.S.C. 1707), as amended by the preceding provisions of this
subtitle, is further amended by adding at the end the following new
subsection:
``(h) The term `real estate' means land and all natural resources
and structures permanently affixed to the land, including residential
buildings and stationary manufactured housing. The Secretary may not
require, for treatment of any land or other property as real estate for
purposes of this title, that such land or property be treated as real
estate for purposes of State taxation.''.
SEC. 216. MUTUAL MORTGAGE INSURANCE FUND.
(a) In General.--Subsection (a) of section 202 of the National
Housing Act (12 U.S.C. 1708(a)) is amended to read as follows:
``(a) Mutual Mortgage Insurance Fund.--
``(1) Establishment.--Subject to the provisions of the
Federal Credit Reform Act of 1990, there is hereby created a
Mutual Mortgage Insurance Fund (in this title referred to as
the `Fund'), which shall be used by the Secretary to carry out
the provisions of this title with respect to mortgages insured
under section 203. The Secretary may enter into commitments to
guarantee, and may guarantee, such insured mortgages.
``(2) Limit on loan guarantees.--The authority of the
Secretary to enter into commitments to guarantee such insured
mortgages shall be effective for any fiscal year only to the
extent that the aggregate original principal loan amount under
such mortgages, any part of which is guaranteed, does not
exceed the amount specified in appropriations Acts for such
fiscal year.
``(3) Fiduciary responsibility.--The Secretary has a
responsibility to ensure that the Mutual Mortgage Insurance
Fund remains financially sound.
``(4) Annual independent actuarial study.--The Secretary
shall provide for an independent actuarial study of the Fund to
be conducted annually, which shall analyze the financial
position of the Fund. The Secretary shall submit a report
annually to the Congress describing the results of such study
and assessing the financial status of the Fund. The report
shall recommend adjustments to underwriting standards, program
participation, or premiums, if necessary, to ensure that the
Fund remains financially sound.
``(5) Quarterly reports.--During each fiscal year, the
Secretary shall submit a report to the Congress for each
quarter, which shall specify for mortgages that are obligations
of the Fund--
``(A) the cumulative volume of loan guarantee
commitments that have been made during such fiscal year
through the end of the quarter for which the report is
submitted;
``(B) the types of loans insured, categorized by
risk;
``(C) any significant changes between actual and
projected claim and prepayment activity;
``(D) projected versus actual loss rates; and
``(E) updated projections of the annual subsidy
rates to ensure that increases in risk to the Fund are
identified and mitigated by adjustments to underwriting
standards, program participation, or premiums, and the
financial soundness of the Fund is maintained.
The first quarterly report under this paragraph shall be
submitted on the last day of the first quarter of fiscal year
2008, or upon the expiration of the 90-day period beginning on
the date of the enactment of the Expanding American
Homeownership Act of 2008, whichever is later.
``(6) Adjustment of premiums.--If, pursuant to the
independent actuarial study of the Fund required under
paragraph (5), the Secretary determines that the Fund is not
meeting the operational goals established under paragraph (8)
or there is a substantial probability that the Fund will not
maintain its established target subsidy rate, the Secretary may
either make programmatic adjustments under section 203 as
necessary to reduce the risk to the Fund, or make appropriate
premium adjustments.
``(7) Operational goals.--The operational goals for the
Fund are--
``(A) to charge borrowers under loans that are
obligations of the Fund an appropriate premium for the
risk that such loans pose to the Fund;
``(B) to minimize the default risk to the Fund and
to homeowners;
``(C) to curtail the impact of adverse selection on
the Fund; and
``(D) to meet the housing needs of the borrowers
that the single family mortgage insurance program under
this title is designed to serve.''.
(b) Obligations of Fund.--The National Housing Act is amended as
follows:
(1) Homeownership voucher program mortgages.--In section
203(v) (12 U.S.C. 1709(v))--
(A) by striking ``Notwithstanding section 202 of
this title, the'' and inserting ``The''; and
(B) by striking ``General Insurance Fund'' the
first place such term appears and all that follows and
inserting ``Mutual Mortgage Insurance Fund.''.
(2) Home equity conversion mortgages.--Section 255(i)(2)(A)
of the National Housing Act (12 U.S.C. 1715z-20(i)(2)(A)) is
amended by striking ``General Insurance Fund'' and inserting
``Mutual Mortgage Insurance Fund''.
(c) Conforming Amendments.--The National Housing Act is amended--
(1) in section 205 (12 U.S.C. 1711), by striking
subsections (g) and (h); and
(2) in section 519(e) (12 U.S.C. 1735c(e)), by striking
``203(b)'' and all that follows through ``203(i)'' and
inserting ``203, except as determined by the Secretary''.
SEC. 217. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.
(a) Hawaiian Home Lands.--Section 247(c) of the National Housing
Act (12 U.S.C. 1715z-12) is amended--
(1) by striking ``General Insurance Fund established in
section 519'' and inserting ``Mutual Mortgage Insurance Fund'';
and
(2) in the second sentence, by striking ``(1) all
references'' and all that follows through ``and (2)''.
(b) Indian Reservations.--Section 248(f) of the National Housing
Act (12 U.S.C. 1715z-13) is amended--
(1) by striking ``General Insurance Fund'' the first place
it appears and all that follows through ``519'' and inserting
``Mutual Mortgage Insurance Fund''; and
(2) in the second sentence, by striking ``(1) all
references'' and all that follows through ``and (2)''.
SEC. 218. CONFORMING AND TECHNICAL AMENDMENTS.
(a) Repeals.--The following provisions of the National Housing Act
are repealed:
(1) Subsection (i) of section 203 (12 U.S.C. 1709(i)).
(2) Subsection (o) of section 203 (12 U.S.C. 1709(o)).
(3) Subsection (p) of section 203 (12 U.S.C. 1709(p)).
(4) Subsection (q) of section 203 (12 U.S.C. 1709(q)).
(5) Section 222 (12 U.S.C. 1715m).
(6) Section 237 (12 U.S.C. 1715z-2).
(7) Section 245 (12 U.S.C. 1715z-10).
(b) Definition of Area.--Section 203(u)(2)(A) of the National
Housing Act (12 U.S.C. 1709(u)(2)(A)) is amended by striking ``shall''
and all that follows and inserting ``means a metropolitan statistical
area as established by the Office of Management and Budget;''.
(c) Definition of State.--Section 201(d) of the National Housing
Act (12 U.S.C. 1707(d)) is amended by striking ``the Trust Territory of
the Pacific Islands'' and inserting ``the Commonwealth of the Northern
Mariana Islands''.
SEC. 219. HOME EQUITY CONVERSION MORTGAGES.
(a) In General.--Section 255 of the National Housing Act (12 U.S.C.
1715z-20) is amended--
(1) in subsection (b)(2), insert ```real estate,''' after
```mortgagor','';
(2) in subsection (b)(4), by striking subparagraph (B) and
inserting the following new subparagraph:
``(B) under a lease that has a term that ends no
earlier than the minimum number of years, as specified
by the Secretary, beyond the actuarial life expectancy
of the mortgagor or comortgagor, whichever is the later
date.''.
(3) in the second sentence of subsection (g), by striking
``the maximum dollar amount established under section
203(b)(2)'' and all that follows through ``located'' and
inserting ``132 percent of the dollar amount limitation
determined under section 305(a)(2)(A) of the Federal Home Loan
Mortgage Corporation Act for a 1-family residence (without
regard to any authority to increase such limitations with
respect to properties located in Alaska, Guam, Hawaii, or the
Virgin Islands and without regard to the high-cost area
limitation under such section 305(a)(2)(B))'';
(4) in subsection (i)(1)(C), by striking ``limitations''
and inserting ``limitation''; and
(5) by adding at the end the following new subsection:
``(o) Authority to Insure Home Purchase Mortgages.--
``(1) In general.--Notwithstanding any other provision in
this section, the Secretary may insure, upon application by a
mortgagee, a home equity conversion mortgage upon such terms
and conditions as the Secretary may prescribe, when the primary
purpose of the home equity conversion mortgage is to enable an
elderly mortgagor to purchase a 1- to 4-family dwelling in
which the mortgagor will occupy or occupies one of the units.
``(2) Limitation on principal obligation.--A home equity
conversion mortgage insured pursuant to paragraph (1) shall
involve a principal obligation that does not exceed the
limitation under subsection (g) of this section on the maximum
amount of the benefits of insurance under this section.''.
(b) Mortgages for Cooperatives.--Subsection (b) of section 255 of
the National Housing Act (12 U.S.C. 1715z-20(b)) is amended--
(1) in paragraph (4)--
(A) by inserting ``a first or subordinate mortgage
or lien'' before ``on all stock'';
(B) by inserting ``unit'' after ``dwelling''; and
(C) by inserting ``a first mortgage or first lien''
before ``on a leasehold''; and
(2) in paragraph (5), by inserting ``a first or subordinate
lien on'' before ``all stock''.
(c) Prohibition on Required Purchase of an Annuity.--Section 255 of
the National Housing Act of 1937 (12 U.S.C. 1715z-20) is amended--
(1) by striking subparagraph (B) of subsection (d)(2) and
inserting the following new subparagraph:
``(B) has received adequate counseling by a third
party (other than a reverse mortgage lender, servicer
or investor, or an entity engaged in the sale of
annuities, investments, long-term care insurance, or
any other type of financial or insurance product) as
provided in subsection (f);'';
(2) by striking the first sentence of subsection (f) and
inserting the following new sentence: ``The Secretary shall
provide or cause to be provided and paid for by entities other
than a reverse mortgage lender, servicer or investor, or an
entity engaged in the sale of annuities, investments, long-term
care insurance, or any other type of financial or insurance
product the information required in subsection (d)(2)(B).'';
and
(3) by striking subsections (l) and (m) and inserting the
following new subsection:
``(l) Regulations to Protect Elderly Homeowners.--
``(1) In general.--Not later than 6 months after the date
of the enactment of the Expanding American Homeownership Act of
2008, the Secretary shall, in consultation with other relevant
Federal departments and agencies, prescribe regulations to help
protect elderly homeowners from the marketing of financial and
insurance products not in the interest of such homeowners,
including the marketing or sale of an annuity as a condition of
obtaining any home equity conversion mortgage.
``(2) Consultation.--In developing the regulations required
under paragraph (1), the Secretary shall consult with consumer
advocates (including recognized experts in consumer
protection), industry representatives, representatives of
counseling organizations, and other interested parties.''.
(d) Limitation on Origination Fees.--Section 255 of the National
Housing Act (12 U.S.C. 1715z-20), as amended by the preceding
provisions of this section, is further amended--
(1) by redesignating subsections (k), (l), and (m) as
subsections (l), (m), and (n), respectively; and
(2) by inserting after subsection (j) the following new
subsection:
``(k) Limitation on Origination Fees.--The Secretary shall
establish limits on the origination fee that may be charged to a
mortgagor under a mortgage insured under this section, which
limitations shall--
``(1) be equal to 2.0 percent of the maximum claim amount
of the mortgage up to a maximum claim amount of $200,000 plus 1
percent of any portion of the maximum claim amount that is
greater than $200,000, unless adjusted thereafter on the basis
of an analysis of (A) costs to mortgagors, and (B) the impact
on the reverse mortgage market;
``(2) be subject to a minimum allowable amount;
``(3) provide that the origination fee may be fully
financed with the mortgage;
``(4) include any fees paid to correspondent mortgagees
approved by the Secretary or to mortgage brokers;
``(5) apply beginning upon the date that the maximum dollar
amount limitation on the benefits of insurance under this
section is first increased pursuant to the amendments made by
section 219(a)(3) of the Expanding American Homeownership Act
of 2008; and
``(6) be subject to a maximum origination fee of $6,000,
except that such maximum limit shall be adjusted in accordance
with the annual percentage increase in the Consumer Price Index
of the Bureau of Labor Statistics of the Department of Labor in
increments of $500 only when the percentage increase in such
index, when applied to the maximum origination fee, produce
dollar increases that exceed $500.''.
(e) Study Regarding Mortgage Insurance Premiums.--The Secretary of
Housing and Urban Development shall conduct a study regarding mortgage
insurance premiums charged under the program under section 255 of the
National Housing Act (12 U.S.C. 1715z-20) for insurance of home equity
conversion mortgages to analyze and determine the effects of reducing
the amounts of such premiums from the amounts charged as of the date of
the enactment of this Act on: (1) costs to mortgagors; and (2) the
financial soundness of the program. Not later than the expiration of
the 12-month period beginning on the date of the enactment of this Act,
the Secretary shall submit a report to the Congress setting forth the
results and conclusions of the study.
(f) Purchase Authority of Fannie Mae and Freddie Mac.--
(1) Fannie mae.--Section 302(b) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1717(b)) is amended
by adding at the end the following:
``(7) The corporation is authorized to purchase, service, sell,
lend on the security of, and otherwise deal in any mortgage insured
under section 255 of the National Housing Act (12 U.S.C. 1715z-20),
notwithstanding the limitations under paragraph (2) on the maximum
original principal obligations of mortgages.''.
(2) Freddie mac.--Section 305(a) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1454(a)) is amended by
adding at the end the following:
``(6) The Corporation is authorized to purchase, service, sell,
lend on the security of, and otherwise deal in any mortgage insured
under section 255 of the National Housing Act (12 U.S.C. 1715z-20),
notwithstanding the limitations under paragraph (2) on the maximum
original principal obligations of mortgages.''.
SEC. 220. STUDY ON PARTICIPATION OF MORTGAGE BROKERS AND CORRESPONDENT
LENDERS.
(a) Study.--The Comptroller General of the United States shall
conduct a study, which shall be completed not later than the expiration
of the 12-month period beginning on the date of the enactment of this
Act, which shall analyze and determine--
(1) the extent to which the financial audit and net worth
requirements impede participation by mortgage brokers and
correspondent lenders in the mortgage insurance programs under
the National Housing Act, as measured by the number and value
of such insured mortgages, disaggregated by the States in which
the properties subject to such mortgages are located;
(2) the extent and effectiveness of the financial audit and
net worth requirements in protecting the Mutual Mortgage
Insurance Fund;
(3) the extent and effectiveness of the supervision and
quality control enforcement, by the Secretary, of mortgagees in
the FHA program, separate from the financial audit and net
worth requirements for participation, in protecting the Mutual
Mortgage Insurance Fund;
(4) the extent to which allowing a mortgage broker to
secure a surety bond in lieu of the financial audit and net
worth requirements would increase participation by mortgage
brokers and correspondent lenders in the mortgage insurance
programs under the National Housing Act;
(5) the extent to which allowing a mortgage broker to
secure a surety bond in lieu of the financial audit and net
worth requirements would protect the Mutual Mortgage Insurance
Fund; and
(6) the potential impact of such changes on the costs
incurred by the Secretary of Housing and Urban Development in
administering the mortgage insurance programs under such Act.
(b) GAO Report.--Not later than the expiration of the 12-month
period beginning on the date of the enactment of this Act, the
Comptroller General shall submit a report to the Congress and the
Secretary of Housing and Urban Development setting forth the results
and conclusions of the study conducted pursuant to subsection (a).
(c) HUD Report.--Not later than the expiration of the 18-month
period beginning upon the date of the enactment of this Act, the
Secretary of Housing and Urban Development may submit a report to the
Congress making recommendations regarding any changes in requirements
for participation of mortgage brokers and correspondent lenders in the
mortgage insurance programs under the National Housing Act arising from
a review of the study conducted pursuant to subsection (a).
SEC. 221. CONFORMING LOAN LIMIT IN DISASTER AREAS.
Section 203(h) of the National Housing Act (12 U.S.C. 1709) is
amended--
(1) by inserting after ``property'' the following: ``plus
any initial service charges, appraisal, inspection and other
fees in connection with the mortgage as approved by the
Secretary,'';
(2) by striking the second sentence (as added by chapter 7
of the Emergency Supplemental Appropriations Act of 1994
(Public Law 103-211; 108 Stat. 12)); and
(3) by adding at the end the following new sentence: ``In
any case in which the single family residence to be insured
under this subsection is within a jurisdiction in which the
President has declared a major disaster to have occurred, the
Secretary is authorized, for a temporary period not to exceed
36 months from the date of such Presidential declaration, to
enter into agreements to insure a mortgage which involves a
principal obligation of up to 100 percent of the dollar
limitation determined under section 305(a)(2) of the Federal
Home Loan Mortgage Corporation Act for a single family
residence, and not in excess of 100 percent of the appraised
value of the property plus any initial service charges,
appraisal, inspection and other fees in connection with the
mortgage as approved by the Secretary.''.
SEC. 222. FAILURE TO PAY AMOUNTS FROM ESCROW ACCOUNTS FOR SINGLE FAMILY
MORTGAGES.
(a) Penalties.--Section 536 of the National Housing Act (12 U.S.C.
1735f-14) is amended--
(1) in subsection (a)(1), by inserting ``servicers
(including escrow account servicers),'' after ``appraisers,'';
(2) in subsection (b)(1)--
(A) in the matter preceding subparagraph (A), by
inserting ``or other participant referred to in
subsection (a),'' after ``lender,''; and
(B) by inserting at the end the following new
subparagraphs:
``(K) In the case of a mortgage for a 1- to 4-
family residence insured under title II that requires
the mortgagor to make payments to the mortgagee or
other servicer of the mortgage for deposit into an
escrow account for the purpose of assuring payment of
taxes, insurance premiums, and other charges with
respect to the property, failure on the part of the
servicer to make any such payment from the escrow
account by the deadline to avoid a penalty with respect
to such payment provided for in the mortgage, unless
the servicer was not provided notice of such deadline.
``(L) In the case of any failure to make any
payment as described in subparagraph (K), submitting
any information to a consumer reporting agency (as such
term is defined in section 603(f) of the Fair Credit
Reporting Act (15 U.S.C. 1681a(f))) regarding such
failure that is adverse to the credit rating or
interest of the mortgagor.''; and
(3) in subsection (c)(3), by adding at the end the
following: ``In the case of any failure to make a payment
described in subsection (b)(1)(K) for which the servicer fails
to reimburse the mortgagor (A) before the expiration of the 60-
day period beginning on the deadline to avoid a penalty with
respect to such payment, in the sum of the amount not paid from
the escrow account by such deadline and the amount of any
penalties accruing to the mortgagor that are attributable to
such failure, or (B) in the amount of any attorneys fees
incurred by the mortgagor and attributable to such failure, the
Secretary shall increase the amount of the penalty under
subsection (a) for any such failure to reimburse, unless the
Secretary determines there are mitigating circumstances.''.
(b) Prohibition on Submission of Information by HUD.--Title II of
the National Housing Act (12 U.S.C. 1707 et seq.) is amended by adding
at the end the following new section:
``SEC. 257. PROHIBITION REGARDING FAILURE ON PART OF SERVICER TO MAKE
ESCROW PAYMENTS.
``In the case of any failure to make any payment as described in
section 536(b)(1)(K), the Secretary may not submit any information to a
consumer reporting agency (as such term is defined in section 603(f) of
the Fair Credit Reporting Act (15 U.S.C. 1681a(f))) regarding such
failure that is adverse to the credit rating or interest of the
mortgagor.''.
SEC. 223. ACCEPTABLE IDENTIFICATION FOR FHA MORTGAGORS.
(a) In General.--Title II of the National Housing Act is amended by
inserting after section 209 (12 U.S.C. 1715) the following new section:
``SEC. 210. FORMS OF ACCEPTABLE IDENTIFICATION.
``The Secretary may not insure a mortgage under any provision of
this title unless the mortgagor under the mortgage provides personal
identification in one of the following forms:
``(1) A valid social security number verified in accordance
with paragraph 3-1 C of chapter 3 of HUD Handbook 4155.1 REV-5.
``(2) A driver's license or identification card issued by a
State in the case of a State that is in compliance with title
II of the REAL ID Act of 2005 (title II of division B of Public
Law 109-13; 49 U.S.C. 30301 note).
``(3) A passport issued by the United States or a foreign
government.
``(4) A photo identification card issued by the Secretary
of Homeland Security (acting through the Director of the United
States Citizenship and Immigration Services).''.
(b) Effective Date.--The requirements of section 210 of the
National Housing Act (as added by subsection (a) of this section) shall
take effect 6 months after the date of the enactment of this Act.
SEC. 224. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS WITHOUT
SUFFICIENT CREDIT HISTORY.
(a) Establishment.--Title II of the National Housing Act (12 U.S.C.
1707 et seq.), as amended by the preceding provisions of this subtitle,
is further amended by adding at the end the following new section:
``SEC. 258. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS WITHOUT
SUFFICIENT CREDIT HISTORY.
``(a) Establishment.--The Secretary shall carry out a pilot program
to establish, and make available to mortgagees, an automated process
for providing alternative credit rating information for mortgagors and
prospective mortgagors under mortgages on 1- to 4-family residences to
be insured under this title who have insufficient credit histories for
determining their creditworthiness. Such alternative credit rating
information may include rent, utilities, and insurance payment
histories, and such other information as the Secretary considers
appropriate.
``(b) Scope.--The Secretary may carry out the pilot program under
this section on a limited basis or scope, and may consider limiting the
program--
``(1) to first-time homebuyers; or
``(2) metropolitan statistical areas significantly impacted
by subprime lending.
``(c) Limitation.--In any fiscal year, the aggregate number of
mortgages insured pursuant to the automated process established under
this section may not exceed 5 percent of the aggregate number of
mortgages for 1- to 4-family residences insured by the Secretary under
this title during the preceding fiscal year.
``(d) Sunset.--After the expiration of the 5-year period beginning
on the date of the enactment of the Expanding American Homeownership
Act of 2008, the Secretary may not enter into any new commitment to
insure any mortgage, or newly insure any mortgage, pursuant to the
automated process established under this section.''.
(b) GAO Report.--Not later than the expiration of the 4-year period
beginning on the date that the Secretary of Housing and Urban
Development first insures any mortgage pursuant to the automated
process established under pilot program under section 258 of the
National Housing Act (as added by the amendment made by subsection (a)
of this section), the Comptroller General of the United States shall
submit to the Congress a report identifying the number of additional
mortgagors served using such automated process and the impact of such
process and the insurance of mortgages pursuant to such process on the
safety and soundness of the insurance funds under the National Housing
Act of which such mortgages are obligations.
SEC. 225. SENSE OF CONGRESS REGARDING TECHNOLOGY FOR FINANCIAL SYSTEMS.
(a) Congressional Findings.--The Congress finds the following:
(1) The Government Accountability Office has cited the FHA
single family housing mortgage insurance program as a ``high-
risk'' program, with a primary reason being non-integrated and
out-dated financial management systems.
(2) The ``Audit of the Federal Housing Administration's
Financial Statements for Fiscal Years 2004 and 2003'',
conducted by the Inspector General of the Department of Housing
and Urban Development reported as a material weakness that
``HUD/FHA's automated data processing [ADP] system environment
must be enhanced to more effectively support FHA's business and
budget processes''.
(3) Existing technology systems for the FHA program have
not been updated to meet the latest standards of the Mortgage
Industry Standards Maintenance Organization and have numerous
deficiencies that lenders have outlined.
(4) Improvements to technology used in the FHA program
will--
(A) allow the FHA program to improve the management
of the FHA portfolio, garner greater efficiencies in
its operations, and lower costs across the program;
(B) result in efficiencies and lower costs for
lenders participating in the program, allowing them to
better use the FHA products in extending homeownership
opportunities to higher credit risk or lower-income
families, in a sound manner.
(5) The Mutual Mortgage Insurance Fund operates without
cost to the taxpayers and generates revenues for the Federal
Government.
(b) Sense of Congress.--It is the sense of the Congress that--
(1) the Secretary of Housing and Urban Development should
use a portion of the funds received from premiums paid for FHA
single family housing mortgage insurance that are in excess of
the amounts paid out in claims to substantially increase the
funding for technology used in such FHA program;
(2) the goal of this investment should be to bring the
technology used in such FHA program to the level and
sophistication of the technology used in the conventional
mortgage lending market, or to exceed such level; and
(3) the Secretary of Housing and Urban Development should
report to the Congress not later than 180 days after the date
of the enactment of this Act regarding the progress the
Department is making toward such goal and if progress is not
sufficient, the resources needed to make greater progress.
SEC. 226. CLARIFICATION OF DISPOSITION OF CERTAIN PROPERTIES.
Notwithstanding any other provision of law, subtitle A of title II
of the Deficit Reduction Act of 2005 (12 U.S.C. 1701z-11 note) and the
amendments made by such title shall not apply to any transaction
regarding a multifamily real property for which--
(1) the Secretary of Housing and Urban Development has
received, before the date of the enactment of such Act, written
expressions of interest in purchasing the property from both a
city government and the housing commission of such city;
(2) after such receipt, the Secretary acquires title to the
property at a foreclosure sale; and
(3) such city government and housing commission have
resolved a previous disagreement with respect to the
disposition of the property.
SEC. 227. VALUATION OF MULTIFAMILY PROPERTIES IN NONCOMPETITIVE SALES
BY HUD TO STATES AND LOCALITIES.
Subtitle A of title II of the Deficit Reduction Act of 2005 (Public
Law 109-171; 120 Stat. 7) is amended by adding at the end the following
new section:
``SEC. 2004. VALUATION OF MULTIFAMILY PROPERTIES IN NONCOMPETITIVE
SALES BY HUD TO STATES AND LOCALITIES.
```Notwithstanding any other provision of law, in determining the
market value of any multifamily real property or multifamily loan for
any noncompetitive sale to a State or local government entity occurring
during fiscal year 2008, the Secretary shall consider, but not be
limited to, industry standard appraisal practices, including the cost
of repairs needed to bring the property at least to minimum State and
local code standards and of maintaining the existing affordability
restrictions imposed by the Secretary on the multifamily real property
or multifamily loan.'.''.
SEC. 228. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.
Notwithstanding any other provision of law, including any provision
of this subtitle and any amendment made by this subtitle--
(1) the premiums charged for mortgage insurance under any
program under the National Housing Act may not be increased
above the premium amounts in effect under such program on
October 1, 2006, unless the Secretary of Housing and Urban
Development determines that, absent such increase, insurance of
additional mortgages under such program would, under the
Federal Credit Reform Act of 1990, require the appropriation of
new budget authority to cover the costs (as such term is
defined in section 502 of the Federal Credit Reform Act of 1990
(2 U.S.C. 661a) of such insurance; and
(2) a premium increase pursuant to paragraph (1) may be
made only by rule making in accordance with the procedures
under section 553 of title 5, United States Code
(notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such
section).
SEC. 229. CIVIL MONEY PENALTIES FOR IMPROPERLY INFLUENCING APPRAISALS.
Paragraph (2) of section 536(b) of the National Housing Act (12
U.S.C. 1735f-14(b)(2)) is amended--
(1) in subparagraph (B), by striking ``or'' at the end;
(2) in subparagraph (C), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following new subparagraph:
``(D) in the case of an insured mortgage under
title II for a 1- to 4-family residence, compensating,
instructing, inducing, coercing, or intimidating any
person who conducts an appraisal of the property in
connection with such mortgage, or attempting to
compensate, instruct, induce, coerce, or intimidate
such a person, for the purpose of causing the appraised
value assigned to the property under the appraisal to
be based on any other factor other than the independent
judgment of such person exercised in accordance with
applicable professional standards.''.
SEC. 230. MORTGAGE INSURANCE PREMIUM REFUNDS.
(a) Authority.--The Secretary of Housing and Urban Development
shall, to the extent that amounts are made available pursuant to
subsection (c), provide refunds of unearned premium charges paid, at
the time of insurance, for mortgage insurance under title II of the
National Housing Act (12 U.S.C. 1707 et seq.) to or on behalf of
mortgagors under mortgages described in subsection (b).
(b) Eligible Mortgages.--A mortgage described in this section is a
mortgage on a one- to four-family dwelling that--
(1) was insured under title II of the National Housing Act
(12 U.S.C. 1707 et seq.);
(2) is otherwise eligible, under the last sentence of
subparagraph (A) of section 203(c)(2) of such Act (12 U.S.C.
1709(c)(2)(A)), for a refund of all unearned premium charges
paid on the mortgage pursuant to such subparagraph, except that
the mortgage--
(A) was closed before December 8, 2004; and
(B) was endorsed on or after such date.
(c) Authorization of Appropriations.--There is authorized to be
appropriated for each fiscal year such sums as may be necessary to
provide refunds of unearned mortgage insurance premiums pursuant to
this section.
SEC. 231. SAVINGS PROVISION.
Any mortgage insured under title II of the National Housing Act
before the date of enactment of this Act shall continue to be governed
by the laws, regulations, orders, and terms and conditions to which it
was subject on the day before the date of the enactment of this Act.
SEC. 232. IMPLEMENTATION.
Except as provided in section 223(b), the Secretary of Housing and
Urban Development shall by notice establish any additional requirements
that may be necessary to immediately carry out the provisions of this
subtitle. The notice shall take effect upon issuance.
Subtitle B--FHA Manufactured Housing Loan Insurance Modernization
SECTION 251. SHORT TITLE.
This subtitle may be cited as the ``FHA Manufactured Housing Loan
Modernization Act of 2008''.
SEC. 252. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) manufactured housing plays a vital role in providing
housing for low- and moderate-income families in the United
States;
(2) the FHA title I insurance program for manufactured home
loans traditionally has been a major provider of mortgage
insurance for home-only transactions;
(3) the manufactured housing market is in the midst of a
prolonged downturn which has resulted in a severe contraction
of traditional sources of private lending for manufactured home
purchases;
(4) during past downturns the FHA title I insurance program
for manufactured homes has filled the lending void by providing
stability until the private markets could recover;
(5) in 1992, during the manufactured housing industry's
last major recession, over 30,000 manufactured home loans were
insured under title I;
(6) in 2006, fewer than 1,500 manufactured housing loans
were insured under title I;
(7) the loan limits for title I manufactured housing loans
have not been adjusted for inflation since 1992; and
(8) these problems with the title I program have resulted
in an atrophied market for manufactured housing loans, leaving
American families who have the most difficulty achieving
homeownership without adequate financing options for home-only
manufactured home purchases.
(b) Purposes.--The purposes of this subtitle are--
(1) to provide adequate funding for FHA-insured
manufactured housing loans for low- and moderate-income
homebuyers during all economic cycles in the manufactured
housing industry;
(2) to modernize the FHA title I insurance program for
manufactured housing loans to enhance participation by Ginnie
Mae and the private lending markets; and
(3) to adjust the low loan limits for title I manufactured
home loan insurance to reflect the increase in costs since such
limits were last increased in 1992 and to index the limits to
inflation.
SEC. 253. EXCEPTION TO LIMITATION ON FINANCIAL INSTITUTION PORTFOLIO.
The second sentence of section 2(a) of the National Housing Act (12
U.S.C. 1703(a)) is amended--
(1) by striking ``In no case'' and inserting ``Other than
in connection with a manufactured home or a lot on which to
place such a home (or both), in no case''; and
(2) by striking ``: Provided, That with'' and inserting ``.
With''.
SEC. 254. INSURANCE BENEFITS.
(a) In General.--Subsection (b) of section 2 of the National
Housing Act (12 U.S.C. 1703(b)), is amended by adding at the end the
following new paragraph:
``(8) Insurance benefits for manufactured housing loans.--
Any contract of insurance with respect to loans, advances of
credit, or purchases in connection with a manufactured home or
a lot on which to place a manufactured home (or both) for a
financial institution that is executed under this title after
the date of the enactment of the by the Secretary shall be
conclusive evidence of the eligibility of such financial
institution for insurance, and the validity of any contract of
insurance so executed shall be incontestable in the hands of
the bearer from the date of the execution of such contract,
except for fraud or misrepresentation on the part of such
institution.''.
(b) Applicability.--The amendment made by subsection (a) shall only
apply to loans that are registered or endorsed for insurance after the
date of the enactment of this Act.
SEC. 255. MAXIMUM LOAN LIMITS.
(a) Dollar Amounts.--Paragraph (1) of section 2(b) of the National
Housing Act (12 U.S.C. 1703(b)(1)) is amended--
(1) in clause (ii) of subparagraph (A), by striking
``$17,500'' and inserting ``$25,090'';
(2) in subparagraph (C) by striking ``$48,600'' and
inserting ``$69,678'';
(3) in subparagraph (D) by striking ``$64,800'' and
inserting ``$92,904'';
(4) in subparagraph (E) by striking ``$16,200'' and
inserting ``$23,226''; and
(5) by realigning subparagraphs (C), (D), and (E) 2 ems to
the left so that the left margins of such subparagraphs are
aligned with the margins of subparagraphs (A) and (B).
(b) Annual Indexing.--Subsection (b) of section 2 of the National
Housing Act (12 U.S.C. 1703(b)), as amended by the preceding provisions
of this subtitle, is further amended by adding at the end the following
new paragraph:
``(9) Annual indexing of manufactured housing loans.--The
Secretary shall develop a method of indexing in order to
annually adjust the loan limits established in subparagraphs
(A)(ii), (C), (D), and (E) of this subsection. Such index shall
be based on the manufactured housing price data collected by
the United States Census Bureau. The Secretary shall establish
such index no later than one year after the date of the
enactment of the FHA Manufactured Housing Loan Modernization
Act of 2008.''.
(c) Technical and Conforming Changes.--Paragraph (1) of section
2(b) of the National Housing Act (12 U.S.C. 1703(b)(1)) is amended--
(1) by striking ``No'' and inserting ``Except as provided
in the last sentence of this paragraph, no''; and
(2) by adding after and below subparagraph (G) the
following:
``The Secretary shall, by regulation, annually increase the dollar
amount limitations in subparagraphs (A)(ii), (C), (D), and (E) (as such
limitations may have been previously adjusted under this sentence) in
accordance with the index established pursuant to paragraph (9).''.
SEC. 256. INSURANCE PREMIUMS.
Subsection (f) of section 2 of the National Housing Act (12 U.S.C.
1703(f)) is amended--
(1) by inserting ``(1) Premium Charges.--'' after ``(f)'';
and
(2) by adding at the end the following new paragraph:
``(2) Manufactured Home Loans.--Notwithstanding paragraph (1), in
the case of a loan, advance of credit, or purchase in connection with a
manufactured home or a lot on which to place such a home (or both), the
premium charge for the insurance granted under this section shall be
paid by the borrower under the loan or advance of credit, as follows:
``(A) At the time of the making of the loan, advance of credit, or
purchase, a single premium payment in an amount not to exceed 2.25
percent of the amount of the original insured principal obligation.
``(B) In addition to the premium under subparagraph (A), annual
premium payments during the term of the loan, advance, or obligation
purchased in an amount not exceeding 1.0 percent of the remaining
insured principal balance (excluding the portion of the remaining
balance attributable to the premium collected under subparagraph (A)
and without taking into account delinquent payments or prepayments).
``(C) Premium charges under this paragraph shall be established in
amounts that are sufficient, but do not exceed the minimum amounts
necessary, to maintain a negative credit subsidy for the program under
this section for insurance of loans, advances of credit, or purchases
in connection with a manufactured home or a lot on which to place such
a home (or both), as determined based upon risk to the Federal
Government under existing underwriting requirements.
``(D) The Secretary may increase the limitations on premium
payments to percentages above those set forth in subparagraphs (A) and
(B), but only if necessary, and not in excess of the minimum increase
necessary, to maintain a negative credit subsidy as described in
subparagraph (C).''.
SEC. 257. TECHNICAL CORRECTIONS.
(a) Dates.--Subsection (a) of section 2 of the National Housing Act
(12 U.S.C. 1703(a)) is amended--
(1) by striking ``on and after July 1, 1939,'' each place
such term appears; and
(2) by striking ``made after the effective date of the
Housing Act of 1954''.
(b) Authority of Secretary.--Subsection (c) of section 2 of the
National Housing Act (12 U.S.C. 1703(c)) is amended to read as follows:
``(c) Handling and Disposal of Property.--
``(1) Authority of secretary.--Notwithstanding any other
provision of law, the Secretary may--
``(A) deal with, complete, rent, renovate,
modernize, insure, or assign or sell at public or
private sale, or otherwise dispose of, for cash or
credit in the Secretary's discretion, and upon such
terms and conditions and for such consideration as the
Secretary shall determine to be reasonable, any real or
personal property conveyed to or otherwise acquired by
the Secretary, in connection with the payment of
insurance heretofore or hereafter granted under this
title, including any evidence of debt, contract, claim,
personal property, or security assigned to or held by
him in connection with the payment of insurance
heretofore or hereafter granted under this section; and
``(B) pursue to final collection, by way of
compromise or otherwise, all claims assigned to or held
by the Secretary and all legal or equitable rights
accruing to the Secretary in connection with the
payment of such insurance, including unpaid insurance
premiums owed in connection with insurance made
available by this title.
``(2) Advertisements for proposals.--Section 3709 of the
Revised Statutes shall not be construed to apply to any
contract of hazard insurance or to any purchase or contract for
services or supplies on account of such property if the amount
thereof does not exceed $25,000.
``(3) Delegation of authority.--The power to convey and to
execute in the name of the Secretary, deeds of conveyance,
deeds of release, assignments and satisfactions of mortgages,
and any other written instrument relating to real or personal
property or any interest therein heretofore or hereafter
acquired by the Secretary pursuant to the provisions of this
title may be exercised by an officer appointed by the Secretary
without the execution of any express delegation of power or
power of attorney. Nothing in this subsection shall be
construed to prevent the Secretary from delegating such power
by order or by power of attorney, in the Secretary's
discretion, to any officer or agent the Secretary may
appoint.''.
SEC. 258. REVISION OF UNDERWRITING CRITERIA.
(a) In General.--Subsection (b) of section 2 of the National
Housing Act (12 U.S.C. 1703(b)), as amended by the preceding provisions
of this subtitle, is further amended by adding at the end the following
new paragraph:
``(10) Financial soundness of manufactured housing
program.--The Secretary shall establish such underwriting
criteria for loans and advances of credit in connection with a
manufactured home or a lot on which to place a manufactured
home (or both), including such loans and advances represented
by obligations purchased by financial institutions, as may be
necessary to ensure that the program under this title for
insurance for financial institutions against losses from such
loans, advances of credit, and purchases is financially
sound.''.
(b) Timing.--Not later than the expiration of the 6-month period
beginning on the date of the enactment of this Act, the Secretary of
Housing and Urban Development shall revise the existing underwriting
criteria for the program referred to in paragraph (10) of section 2(b)
of the National Housing Act (as added by subsection (a) of this
section) in accordance with the requirements of such paragraph.
SEC. 259. REQUIREMENT OF SOCIAL SECURITY ACCOUNT NUMBER FOR ASSISTANCE.
Section 2 of the National Housing Act (12 U.S.C. 1703) is amended
by adding at the end the following new subsection:
``(j) Requirement of Social Security Account Number for
Financing.--No insurance shall be granted under this section with
respect to any obligation representing any loan, advance of credit, or
purchase by a financial institution unless the borrower to which the
loan or advance of credit was made has a valid social security
number.''.
SEC. 260. GAO STUDY OF MITIGATION OF TORNADO RISKS TO MANUFACTURED
HOMES.
The Comptroller General of the United States shall assess how the
Secretary of Housing and Urban Development utilizes the FHA
manufactured housing loan insurance program under title I of the
National Housing Act, the community development block grant program
under title I of the Housing and Community Development Act of 1974, and
other programs and resources available to the Secretary to mitigate the
risks to manufactured housing residents and communities resulting from
tornados. The Comptroller General shall submit to the Congress a report
on the conclusions and recommendations of the assessment conducted
pursuant to this section not later than the expiration of the 12-month
period beginning on the date of the enactment of this Act.
TITLE III--REFORM OF GOVERNMENT-SPONSORED ENTITIES FOR HOUSING FINANCE
SEC. 301. SHORT TITLE.
This title may be cited as the ``Federal Housing Finance Reform Act
of 2008''.
SEC. 302. DEFINITIONS.
Section 1303 of the Housing and Community Development Act of 1992
(12 U.S.C. 4502) is amended--
(1) in paragraph (7), by striking ``an enterprise'' and
inserting ``a regulated entity'';
(2) by striking ``the enterprise'' each place such term
appears (except in paragraphs (4) and (18)) and inserting ``the
regulated entity'';
(3) in paragraph (5), by striking ``Office of Federal
Housing Enterprise Oversight of the Department of Housing and
Urban Development'' and inserting ``Federal Housing Finance
Agency'';
(4) in each of paragraphs (8), (9), (10), and (19), by
striking ``Secretary'' each place that term appears and
inserting ``Director'';
(5) in paragraph (13), by inserting ``, with respect to an
enterprise,'' after ``means'';
(6) by redesignating paragraphs (16) through (19) as
paragraphs (20) through (23), respectively;
(7) by striking paragraphs (14) and (15) and inserting the
following new paragraphs:
``(18) Regulated entity.--The term `regulated entity'
means--
``(A) the Federal National Mortgage Association and
any affiliate thereof;
``(B) the Federal Home Loan Mortgage Corporation
and any affiliate thereof; and
``(C) each Federal home loan bank.
``(19) Regulated entity-affiliated party.--The term
`regulated entity-affiliated party' means--
``(A) any director, officer, employee, or agent
for, a regulated entity, or controlling shareholder of
an enterprise;
``(B) any shareholder, affiliate, consultant, or
joint venture partner of a regulated entity, and any
other person, as determined by the Director (by
regulation or on a case-by-case basis) that
participates in the conduct of the affairs of a
regulated entity, except that a shareholder of a
regulated entity shall not be considered to have
participated in the affairs of that regulated entity
solely by reason of being a member or customer of the
regulated entity;
``(C) any independent contractor for a regulated
entity (including any attorney, appraiser, or
accountant), if--
``(i) the independent contractor knowingly
or recklessly participates in--
``(I) any violation of any law or
regulation;
``(II) any breach of fiduciary
duty; or
``(III) any unsafe or unsound
practice; and
``(ii) such violation, breach, or practice
caused, or is likely to cause, more than a
minimal financial loss to, or a significant
adverse effect on, the regulated entity; and
``(D) any not-for-profit corporation that receives
its principal funding, on an ongoing basis, from any
regulated entity.''.
(8) by redesignating paragraphs (8) through (13) as
paragraphs (12) through (17), respectively; and
(9) by inserting after paragraph (7) the following new
paragraph:
``(11) Federal home loan bank.--The term `Federal home loan
bank' means a bank established under the authority of the
Federal Home Loan Bank Act.'';
(10) by redesignating paragraphs (2) through (7) as
paragraphs (5) through (10), respectively; and
(11) by inserting after paragraph (1) the following new
paragraphs:
``(2) Agency.--The term `Agency' means the Federal Housing
Finance Agency.
``(3) Authorizing statutes.--The term `authorizing
statutes' means--
``(A) the Federal National Mortgage Association
Charter Act;
``(B) the Federal Home Loan Mortgage Corporation
Act; and
``(C) the Federal Home Loan Bank Act.
``(4) Board.--The term `Board' means the Federal Housing
Enterprise Board established under section 1313B.''.
Subtitle A--Reform of Regulation of Enterprises and Federal Home Loan
Banks
CHAPTER 1--IMPROVEMENT OF SAFETY AND SOUNDNESS
SEC. 311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.
(a) In General.--The Housing and Community Development Act of 1992
(12 U.S.C. 4501 et seq.) is amended by striking sections 1311 and 1312
and inserting the following:
``SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.
``(a) Establishment.--There is established the Federal Housing
Finance Agency, which shall be an independent agency of the Federal
Government.
``(b) General Supervisory and Regulatory Authority.--
``(1) In general.--Each regulated entity shall, to the
extent provided in this title, be subject to the supervision
and regulation of the Agency.
``(2) Authority over fannie mae, freddie mac, and federal
home loan banks.--The Director of the Federal Housing Finance
Agency shall have general supervisory and regulatory authority
over each regulated entity and shall exercise such general
regulatory and supervisory authority, including such duties and
authorities set forth under section 1313 of this Act, to ensure
that the purposes of this Act, the authorizing statutes, and
any other applicable law are carried out. The Director shall
have the same supervisory and regulatory authority over any
joint office of the Federal home loan banks, including the
Office of Finance of the Federal Home Loan Banks, as the
Director has over the individual Federal home loan banks.
``(c) Savings Provision.--The authority of the Director to take
actions under subtitles B and C shall not in any way limit the general
supervisory and regulatory authority granted to the Director.
``SEC. 1312. DIRECTOR.
``(a) Establishment of Position.--There is established the position
of the Director of the Federal Housing Finance Agency, who shall be the
head of the Agency.
``(b) Appointment; Term.--
``(1) Appointment.--The Director shall be appointed by the
President, by and with the advice and consent of the Senate,
from among individuals who are citizens of the United States,
have a demonstrated understanding of financial management or
oversight, and have a demonstrated understanding of capital
markets, including the mortgage securities markets and housing
finance.
``(2) Term and removal.--The Director shall be appointed
for a term of 5 years and may be removed by the President only
for cause.
``(3) Vacancy.--A vacancy in the position of Director that
occurs before the expiration of the term for which a Director
was appointed shall be filled in the manner established under
paragraph (1), and the Director appointed to fill such vacancy
shall be appointed only for the remainder of such term.
``(4) Service after end of term.--An individual may serve
as the Director after the expiration of the term for which
appointed until a successor has been appointed.
``(5) Transitional provision.--Notwithstanding paragraphs
(1) and (2), the Director of the Office of Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development shall serve as the Director until a successor has
been appointed under paragraph (1).
``(c) Deputy Director of the Division of Enterprise Regulation.--
``(1) In general.--The Agency shall have a Deputy Director
of the Division of Enterprise Regulation, who shall be
appointed by the Director from among individuals who are
citizens of the United States, and have a demonstrated
understanding of financial management or oversight and of
mortgage securities markets and housing finance.
``(2) Functions.--The Deputy Director of the Division of
Enterprise Regulation shall have such functions, powers, and
duties with respect to the oversight of the enterprises as the
Director shall prescribe.
``(d) Deputy Director of the Division of Federal Home Loan Bank
Regulation.--
``(1) In general.--The Agency shall have a Deputy Director
of the Division of Federal Home Loan Bank Regulation, who shall
be appointed by the Director from among individuals who are
citizens of the United States, have a demonstrated
understanding of financial management or oversight and of the
Federal Home Loan Bank System and housing finance.
``(2) Functions.--The Deputy Director of the Division of
Federal Home Loan Bank Regulation shall have such functions,
powers, and duties with respect to the oversight of the Federal
home loan banks as the Director shall prescribe.
``(e) Deputy Director for Housing.--
``(1) In general.--The Agency shall have a Deputy Director
for Housing, who shall be appointed by the Director from among
individuals who are citizens of the United States, and have a
demonstrated understanding of the housing markets and housing
finance and of community and economic development.
``(2) Functions.--The Deputy Director for Housing shall
have such functions, powers, and duties with respect to the
oversight of the housing mission and goals of the enterprises,
and with respect to oversight of the housing finance and
community and economic development mission of the Federal home
loan banks, as the Director shall prescribe.
``(f) Limitations.--The Director and each of the Deputy Directors
may not--
``(1) have any direct or indirect financial interest in any
regulated entity or regulated entity-affiliated party;
``(2) hold any office, position, or employment in any
regulated entity or regulated entity-affiliated party; or
``(3) have served as an executive officer or director of
any regulated entity, or regulated entity-affiliated party, at
any time during the 3-year period ending on the date of
appointment of such individual as Director or Deputy Director.
``(g) Ombudsman.--The Director shall establish the position of the
Ombudsman in the Agency. The Director shall provide that the Ombudsman
will consider complaints and appeals from any regulated entity and any
person that has a business relationship with a regulated entity and
shall specify the duties and authority of the Ombudsman.''.
(b) Appointment of Director.--Notwithstanding any other provision
of law or of this title, the President may, any time after the date of
the enactment of this Act, appoint an individual to serve as the
Director of the Federal Housing Finance Agency, as such office is
established by the amendment made by subsection (a). This subsection
shall take effect on the date of the enactment of this Act.
SEC. 312. DUTIES AND AUTHORITIES OF DIRECTOR.
(a) In General.--The Housing and Community Development Act of 1992
(12 U.S.C. 4513) is amended by striking section 1313 and inserting the
following new sections:
``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.
``(a) Duties.--
``(1) Principal duties.--The principal duties of the
Director shall be--
``(A) to oversee the operations of each regulated
entity and any joint office of the Federal Home Loan
Banks; and
``(B) to ensure that--
``(i) each regulated entity operates in a
safe and sound manner, including maintenance of
adequate capital and internal controls;
``(ii) the operations and activities of
each regulated entity foster liquid, efficient,
competitive, and resilient national housing
finance markets that minimize the cost of
housing finance (including activities relating
to mortgages on housing for low- and moderate-
income families involving a reasonable economic
return that may be less than the return earned
on other activities);
``(iii) each regulated entity complies with
this title and the rules, regulations,
guidelines, and orders issued under this title
and the authorizing statutes; and
``(iv) each regulated entity carries out
its statutory mission only through activities
that are consistent with this title and the
authorizing statutes.
``(2) Scope of authority.--The authority of the Director
shall include the authority--
``(A) to review and, if warranted based on the
principal duties described in paragraph (1), reject any
acquisition or transfer of a controlling interest in an
enterprise; and
``(B) to exercise such incidental powers as may be
necessary or appropriate to fulfill the duties and
responsibilities of the Director in the supervision and
regulation of each regulated entity.
``(b) Delegation of Authority.--The Director may delegate to
officers or employees of the Agency, including each of the Deputy
Directors, any of the functions, powers, or duties of the Director, as
the Director considers appropriate.
``(c) Litigation Authority.--
``(1) In general.--In enforcing any provision of this
title, any regulation or order prescribed under this title, or
any other provision of law, rule, regulation, or order, or in
any other action, suit, or proceeding to which the Director is
a party or in which the Director is interested, and in the
administration of conservatorships and receiverships, the
Director may act in the Director's own name and through the
Director's own attorneys, or request that the Attorney General
of the United States act on behalf of the Director.
``(2) Consultation with attorney general.--The Director
shall provide notice to, and consult with, the Attorney General
of the United States before taking an action under paragraph
(1) of this subsection or under section 1344(a), 1345(d),
1348(c), 1372(e), 1375(a), 1376(d), or 1379D(c), except that,
if the Director determines that any delay caused by such prior
notice and consultation may adversely affect the safety and
soundness responsibilities of the Director under this title,
the Director shall notify the Attorney General as soon as
reasonably possible after taking such action.
``(3) Subject to suit.--Except as otherwise provided by
law, the Director shall be subject to suit (other than suits on
claims for money damages) by a regulated entity or director or
officer thereof with respect to any matter under this title or
any other applicable provision of law, rule, order, or
regulation under this title, in the United States district
court for the judicial district in which the regulated entity
has its principal place of business, or in the United States
District Court for the District of Columbia, and the Director
may be served with process in the manner prescribed by the
Federal Rules of Civil Procedure.
``SEC. 1313A. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.
``(a) Standards.--The Director shall establish standards, by
regulation, guideline, or order, for each regulated entity relating
to--
``(1) adequacy of internal controls and information
systems, including information security and privacy policies
and practices, taking into account the nature and scale of
business operations;
``(2) independence and adequacy of internal audit systems;
``(3) management of credit and counterparty risk, including
systems to identify concentrations of credit risk and
prudential limits to restrict exposure of the regulated entity
to a single counterparty or groups of related counterparties;
``(4) management of interest rate risk exposure;
``(5) management of market risk, including standards that
provide for systems that accurately measure, monitor, and
control market risks and, as warranted, that establish
limitations on market risk;
``(6) adequacy and maintenance of liquidity and reserves;
``(7) management of any asset and investment portfolio;
``(8) investments and acquisitions by a regulated entity,
to ensure that they are consistent with the purposes of this
Act and the authorizing statutes;
``(9) maintenance of adequate records, in accordance with
consistent accounting policies and practices that enable the
Director to evaluate the financial condition of the regulated
entity;
``(10) issuance of subordinated debt by that particular
regulated entity, as the Director considers necessary;
``(11) overall risk management processes, including
adequacy of oversight by senior management and the board of
directors and of processes and policies to identify, measure,
monitor, and control material risks, including reputational
risks, and for adequate, well-tested business resumption plans
for all major systems with remote site facilities to protect
against disruptive events; and
``(12) such other operational and management standards as
the Director determines to be appropriate.
``(b) Failure To Meet Standards.--
``(1) Plan requirement.--
``(A) In general.--If the Director determines that
a regulated entity fails to meet any standard
established under subsection (a)--
``(i) if such standard is established by
regulation, the Director shall require the
regulated entity to submit an acceptable plan
to the Director within the time allowed under
subparagraph (C); and
``(ii) if such standard is established by
guideline, the Director may require the
regulated entity to submit a plan described in
clause (i).
``(B) Contents.--Any plan required under
subparagraph (A) shall specify the actions that the
regulated entity will take to correct the deficiency.
If the regulated entity is undercapitalized, the plan
may be a part of the capital restoration plan for the
regulated entity under section 1369C.
``(C) Deadlines for submission and review.--The
Director shall by regulation establish deadlines that--
``(i) provide the regulated entities with
reasonable time to submit plans required under
subparagraph (A), and generally require a
regulated entity to submit a plan not later
than 30 days after the Director determines that
the entity fails to meet any standard
established under subsection (a); and
``(ii) require the Director to act on plans
expeditiously, and generally not later than 30
days after the plan is submitted.
``(2) Required order upon failure to submit or implement
plan.--If a regulated entity fails to submit an acceptable plan
within the time allowed under paragraph (1)(C), or fails in any
material respect to implement a plan accepted by the Director,
the following shall apply:
``(A) Required correction of deficiency.--The
Director shall, by order, require the regulated entity
to correct the deficiency.
``(B) Other authority.--The Director may, by order,
take one or more of the following actions until the
deficiency is corrected:
``(i) Prohibit the regulated entity from
permitting its average total assets (as such
term is defined in section 1316(b)) during any
calendar quarter to exceed its average total
assets during the preceding calendar quarter,
or restrict the rate at which the average total
assets of the entity may increase from one
calendar quarter to another.
``(ii) Require the regulated entity--
``(I) in the case of an enterprise,
to increase its ratio of core capital
to assets.
``(II) in the case of a Federal
home loan bank, to increase its ratio
of total capital (as such term is
defined in section 6(a)(5) of the
Federal Home Loan Bank Act (12 U.S.C.
1426(a)(5)) to assets.
``(iii) Require the regulated entity to
take any other action that the Director
determines will better carry out the purposes
of this section than any of the actions
described in this subparagraph.
``(3) Mandatory restrictions.--In complying with paragraph
(2), the Director shall take one or more of the actions
described in clauses (i) through (iii) of paragraph (2)(B) if--
``(A) the Director determines that the regulated
entity fails to meet any standard prescribed under
subsection (a);
``(B) the regulated entity has not corrected the
deficiency; and
``(C) during the 18-month period before the date on
which the regulated entity first failed to meet the
standard, the entity underwent extraordinary growth, as
defined by the Director.
``(c) Other Enforcement Authority Not Affected.--The authority of
the Director under this section is in addition to any other authority
of the Director.''.
(b) Independence in Congressional Testimony and Recommendations.--
Section 111 of Public Law 93-495 (12 U.S.C. 250) is amended by striking
``the Federal Housing Finance Board'' and inserting ``the Director of
the Federal Housing Finance Agency''.
SEC. 313. FEDERAL HOUSING ENTERPRISE BOARD.
(a) In General.--Title XIII of the Housing and Community
Development Act of 1992 (12 U.S.C. 4501 et seq.) is amended by
inserting after section 1313A, as added by the preceding provisions of
this title, the following new section:
``SEC. 1313B. FEDERAL HOUSING ENTERPRISE BOARD.
``(a) In General.--There is established the Federal Housing
Enterprise Board, which shall advise the Director with respect to
overall strategies and policies in carrying out the duties of the
Director under this title.
``(b) Limitations.--The Board may not exercise any executive
authority, and the Director may not delegate to the Board any of the
functions, powers, or duties of the Director.
``(c) Composition.--The Board shall be comprised of 3 members, of
whom--
``(1) one member shall be the Secretary of the Treasury;
``(2) one member shall be the Secretary of Housing and
Urban Development; and
``(3) one member shall be the Director, who shall serve as
the Chairperson of the Board.
``(d) Meetings.--
``(1) In general.--The Board shall meet upon notice by the
Director, but in no event shall the Board meet less frequently
than once every 3 months.
``(2) Special meetings.--Either the Secretary of the
Treasury or the Secretary of Housing and Urban Development may,
upon giving written notice to the Director, require a special
meeting of the Board.
``(e) Testimony.--On an annual basis, the Board shall testify
before Congress regarding--
``(1) the safety and soundness of the regulated entities;
``(2) any material deficiencies in the conduct of the
operations of the regulated entities;
``(3) the overall operational status of the regulated
entities;
``(4) an evaluation of the performance of the regulated
entities in carrying out their respective missions;
``(5) operations, resources, and performance of the Agency;
and
``(6) such other matters relating to the Agency and its
fulfillment of its mission, as the Board determines
appropriate.''.
(b) Annual Report of the Director.--Section 1319B(a) of the Housing
and Community Development Act of 1992 (12 U.S.C. 4521 (a)) is amended--
(1) in paragraph (3), by striking ``and'' at the end; and
(2) by striking paragraph (4) and inserting the following
new paragraphs:
``(4) an assessment of the Board or any of its members with
respect to--
``(A) the safety and soundness of the regulated
entities;
``(B) any material deficiencies in the conduct of
the operations of the regulated entities;
``(C) the overall operational status of the
regulated entities; and
``(D) an evaluation of the performance of the
regulated entities in carrying out their missions;
``(5) operations, resources, and performance of the Agency;
``(6) a description of the demographic makeup of the
workforce of the Agency and the actions taken pursuant to
section 1319A(b) to provide for diversity in the workforce; and
``(7) such other matters relating to the Agency and its
fulfillment of its mission.''.
SEC. 314. AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTITIES.
Section 1314 of the Housing and Community Development Act of 1992
(12 U.S.C. 4514) is amended--
(1) in the section heading, by striking ``enterprises'' and
inserting ``regulated entities'';
(2) in subsection (a)--
(A) in the subsection heading, by striking
``Special Reports and Reports of Financial Condition''
and inserting ``Regular and Special Reports'';
(B) in paragraph (1)--
(i) in the paragraph heading, by striking
``Financial condition'' and inserting ``Regular
reports''; and
(ii) by striking ``reports of financial
condition and operations'' and inserting
``regular reports on the condition (including
financial condition), management, activities,
or operations of the regulated entity, as the
Director considers appropriate''; and
(C) in paragraph (2), after ``submit special
reports'' insert ``on any of the topics specified in
paragraph (1) or such other topics''; and
(3) by adding at the end the following new subsection:
``(c) Reports of Fraudulent Financial Transactions.--
``(1) Requirement to report.--The Director shall require a
regulated entity to submit to the Director a timely report upon
discovery by the regulated entity that it has purchased or sold
a fraudulent loan or financial instrument or suspects a
possible fraud relating to a purchase or sale of any loan or
financial instrument. The Director shall require the regulated
entities to establish and maintain procedures designed to
discover any such transactions.
``(2) Protection from liability for reports.--
``(A) In general.--If a regulated entity makes a
report pursuant to paragraph (1), or a regulated
entity-affiliated party makes, or requires another to
make, such a report, and such report is made in a good
faith effort to comply with the requirements of
paragraph (1), such regulated entity or regulated
entity-affiliated party shall not be liable to any
person under any law or regulation of the United
States, any constitution, law, or regulation of any
State or political subdivision of any State, or under
any contract or other legally enforceable agreement
(including any arbitration agreement), for such report
or for any failure to provide notice of such report to
the person who is the subject of such report or any
other person identified in the report.
``(B) Rule of construction.--Subparagraph (A) shall
not be construed as creating--
``(i) any inference that the term `person',
as used in such subparagraph, may be construed
more broadly than its ordinary usage so as to
include any government or agency of government;
or
``(ii) any immunity against, or otherwise
affecting, any civil or criminal action brought
by any government or agency of government to
enforce any constitution, law, or regulation of
such government or agency.''.
SEC. 315. DISCLOSURE OF INCOME AND CHARITABLE CONTRIBUTIONS BY
ENTERPRISES.
Section 1314 of the Housing and Community Development Act of 1992
(12 U.S.C. 4514), as amended by the preceding provisions of this title,
is further amended by adding at the end the following new subsections:
``(d) Disclosure of Charitable Contributions by Enterprises.--
``(1) Required disclosure.--The Director shall, by
regulation, require each enterprise to submit a report
annually, in a format designated by the Director, containing
the following information:
``(A) Total value.--The total value of
contributions made by the enterprise to nonprofit
organizations during its previous fiscal year.
``(B) Substantial contributions.--If the value of
contributions made by the enterprise to any nonprofit
organization during its previous fiscal year exceeds
the designated amount, the name of that organization
and the value of contributions.
``(C) Substantial contributions to insider-
affiliated charities.--Identification of each
contribution whose value exceeds the designated amount
that were made by the enterprise during the
enterprise's previous fiscal year to any nonprofit
organization of which a director, officer, or
controlling person of the enterprise, or a spouse
thereof, was a director or trustee, the name of such
nonprofit organization, and the value of the
contribution.
``(2) Definitions.--For purposes of this subsection--
``(A) the term `designated amount' means such
amount as may be designated by the Director by
regulation, consistent with the public interest and the
protection of investors for purposes of this
subsection; and
``(B) the Director may, by such regulations as the
Director deems necessary or appropriate in the public
interest, define the terms officer and controlling
person.
``(3) Public availability.--The Director shall make the
information submitted pursuant to this subsection publicly
available.
``(e) Disclosure of Income.--Each enterprise shall include, in each
annual report filed under section 13 of the Securities Exchange Act of
1934 (15 U.S.C. 78m), the income reported by the issuer to the Internal
Revenue Service for the most recent taxable year. Such income shall--
``(1) be presented in a prominent location in each such
report and in a manner that permits a ready comparison of such
income to income otherwise required to be included in such
reports under regulations issued under such section; and
``(2) be submitted to the Securities and Exchange
Commission in a form and manner suitable for entry into the
EDGAR system of such Commission for public availability under
such system.''.
SEC. 316. ASSESSMENTS.
Section 1316 of the Housing and Community Development Act of 1992
(12 U.S.C. 4516) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Annual Assessments.--The Director shall establish and collect
from the regulated entities annual assessments in an amount not
exceeding the amount sufficient to provide for reasonable costs and
expenses of the Agency, including--
``(1) the expenses of any examinations under section 1317
of this Act and under section 20 of the Federal Home Loan Bank
Act;
``(2) the expenses of obtaining any reviews and credit
assessments under section 1319;
``(3) such amounts in excess of actual expenses for any
given year as deemed necessary by the Director to maintain a
working capital fund in accordance with subsection (e); and
``(4) the wind up of the affairs of the Office of Federal
Housing Enterprise Oversight and the Federal Housing Finance
Board under subtitle C of the Federal Housing Finance Reform
Act of 2008.'';
(2) in subsection (b)--
(A) in the subsection heading, by striking
``Enterprises'' and inserting ``Regulated Entities'';
(B) by realigning paragraph (2) two ems from the
left margin, so as to align the left margin of such
paragraph with the left margins of paragraph (1);
(C) in paragraph (1)--
(i) by striking ``Each enterprise'' and
inserting ``Each regulated entity'';
(ii) by striking ``each enterprise'' and
inserting ``each regulated entity''; and
(iii) by striking ``both enterprises'' and
inserting ``all of the regulated entities'';
and
(D) in paragraph (3)--
(i) in subparagraph (B), by striking
``subparagraph (A)'' and inserting ``clause
(i)'';
(ii) by redesignating subparagraphs (A),
(B), and (C) as clauses (i), (ii) and (ii),
respectively, and realigning such clauses, as
so redesignated, so as to be indented 6 ems
from the left margin;
(iii) by striking the matter that precedes
clause (i), as so redesignated, and inserting
the following:
``(3) Definition of total assets.--For purposes of this
section, the term `total assets' means as follows:
``(A) Enterprises.--With respect to an enterprise,
the sum of--''; and
(iv) by adding at the end the following new
subparagraph:
``(B) Federal home loan banks.--With respect to a
Federal home loan bank, the total assets of the Bank,
as determined by the Director in accordance with
generally accepted accounting principles.'';
(3) by striking subsection (c) and inserting the following
new subsection:
``(c) Increased Costs of Regulation.--
``(1) Increase for inadequate capitalization.--The
semiannual payments made pursuant to subsection (b) by any
regulated entity that is not classified (for purposes of
subtitle B) as adequately capitalized may be increased, as
necessary, in the discretion of the Director to pay additional
estimated costs of regulation of the regulated entity.
``(2) Adjustment for enforcement activities.--The Director
may adjust the amounts of any semiannual payments for an
assessment under subsection (a) that are to be paid pursuant to
subsection (b) by a regulated entity, as necessary in the
discretion of the Director, to ensure that the costs of
enforcement activities under this Act for a regulated entity
are borne only by such regulated entity.
``(3) Additional assessment for deficiencies.--If at any
time, as a result of increased costs of regulation of a
regulated entity that is not classified (for purposes of
subtitle B) as adequately capitalized or as the result of
supervisory or enforcement activities under this Act for a
regulated entity, the amount available from any semiannual
payment made by such regulated entity pursuant to subsection
(b) is insufficient to cover the costs of the Agency with
respect to such entity, the Director may make and collect from
such regulated entity an immediate assessment to cover the
amount of such deficiency for the semiannual period. If, at the
end of any semiannual period during which such an assessment is
made, any amount remains from such assessment, such remaining
amount shall be deducted from the assessment for such regulated
entity for the following semiannual period.'';
(4) in subsection (d), by striking ``If'' and inserting
``Except with respect to amounts collected pursuant to
subsection (a)(3), if''; and
(5) by striking subsections (e) through (g) and inserting
the following new subsections:
``(e) Working Capital Fund.--At the end of each year for which an
assessment under this section is made, the Director shall remit to each
regulated entity any amount of assessment collected from such regulated
entity that is attributable to subsection (a)(3) and is in excess of
the amount the Director deems necessary to maintain a working capital
fund.
``(f) Treatment of Assessments.--
``(1) Deposit.--Amounts received by the Director from
assessments under this section may be deposited by the Director
in the manner provided in section 5234 of the Revised Statutes
(12 U.S.C. 192) for monies deposited by the Comptroller of the
Currency.
``(2) Not government funds.--The amounts received by the
Director from any assessment under this section shall not be
construed to be Government or public funds or appropriated
money.
``(3) No apportionment of funds.--Notwithstanding any other
provision of law, the amounts received by the Director from any
assessment under this section shall not be subject to
apportionment for the purpose of chapter 15 of title 31, United
States Code, or under any other authority.
``(4) Use of funds.--The Director may use any amounts
received by the Director from assessments under this section
for compensation of the Director and other employees of the
Agency and for all other expenses of the Director and the
Agency.
``(5) Availability of oversight fund amounts.--
Notwithstanding any other provision of law, any amounts
remaining in the Federal Housing Enterprises Oversight Fund
established under this section (as in effect before the
effective date under section 365 of the Federal Housing Finance
Reform Act of 2008), and any amounts remaining from assessments
on the Federal Home Loan banks pursuant to section 18(b) of the
Federal Home Loan Bank Act (12 U.S.C. 1438(b)), shall, upon
such effective date, be treated for purposes of this subsection
as amounts received from assessments under this section.
``(6) Treasury investments.--
``(A) Authority.--The Director may request the
Secretary of the Treasury to invest such portions of
amount received by the Director from assessments paid
under this section that, in the Director's discretion,
are not required to meet the current working needs of
the Agency.
``(B) Government obligations.--Pursuant to a
request under subparagraph (A), the Secretary of the
Treasury shall invest such amounts in government
obligations guaranteed as to principal and interest by
the United States with maturities suitable to the needs
of Agency and bearing interest at a rate determined by
the Secretary of the Treasury taking into consideration
current market yields on outstanding marketable
obligations of the United States of comparable
maturity.
``(g) Budget and Financial Management.--
``(1) Financial operating plans and forecasts.--The
Director shall provide to the Director of the Office of
Management and Budget copies of the Director's financial
operating plans and forecasts as prepared by the Director in
the ordinary course of the Agency's operations, and copies of
the quarterly reports of the Agency's financial condition and
results of operations as prepared by the Director in the
ordinary course of the Agency's operations.
``(2) Financial statements.--The Agency shall prepare
annually a statement of assets and liabilities and surplus or
deficit; a statement of income and expenses; and a statement of
sources and application of funds.
``(3) Financial management systems.--The Agency shall
implement and maintain financial management systems that comply
substantially with Federal financial management systems
requirements, applicable Federal accounting standards, and that
uses a general ledger system that accounts for activity at the
transaction level.
``(4) Assertion of internal controls.--The Director shall
provide to the Comptroller General an assertion as to the
effectiveness of the internal controls that apply to financial
reporting by the Agency, using the standards established in
section 3512(c) of title 31, United States Code.
``(5) Rule of construction.--This subsection may not be
construed as implying any obligation on the part of the
Director to consult with or obtain the consent or approval of
the Director of the Office of Management and Budget with
respect to any reports, plans, forecasts, or other information
referred to in paragraph (1) or any jurisdiction or oversight
over the affairs or operations of the Agency.
``(h) Audit of Agency.--
``(1) In general.--The Comptroller General shall annually
audit the financial transactions of the Agency in accordance
with the U.S. generally accepted government auditing standards
as may be prescribed by the Comptroller General of the United
States. The audit shall be conducted at the place or places
where accounts of the Agency are normally kept. The
representatives of the Government Accountability Office shall
have access to the personnel and to all books, accounts,
documents, papers, records (including electronic records),
reports, files, and all other papers, automated data, things,
or property belonging to or under the control of or used or
employed by the Agency pertaining to its financial transactions
and necessary to facilitate the audit, and such representatives
shall be afforded full facilities for verifying transactions
with the balances or securities held by depositories, fiscal
agents, and custodians. All such books, accounts, documents,
records, reports, files, papers, and property of the Agency
shall remain in possession and custody of the Agency. The
Comptroller General may obtain and duplicate any such books,
accounts, documents, records, working papers, automated data
and files, or other information relevant to such audit without
cost to the Comptroller General and the Comptroller General's
right of access to such information shall be enforceable
pursuant to section 716(c) of title 31, United States Code.
``(2) Report.--The Comptroller General shall submit to the
Congress a report of each annual audit conducted under this
subsection. The report to the Congress shall set forth the
scope of the audit and shall include the statement of assets
and liabilities and surplus or deficit, the statement of income
and expenses, the statement of sources and application of
funds, and such comments and information as may be deemed
necessary to inform Congress of the financial operations and
condition of the Agency, together with such recommendations
with respect thereto as the Comptroller General may deem
advisable. A copy of each report shall be furnished to the
President and to the Agency at the time submitted to the
Congress.
``(3) Assistance and costs.--For the purpose of conducting
an audit under this subsection, the Comptroller General may, in
the discretion of the Comptroller General, employ by contract,
without regard to section 5 of title 41, United States Code,
professional services of firms and organizations of certified
public accountants for temporary periods or for special
purposes. Upon the request of the Comptroller General, the
Director of the Agency shall transfer to the Government
Accountability Office from funds available, the amount
requested by the Comptroller General to cover the full costs of
any audit and report conducted by the Comptroller General. The
Comptroller General shall credit funds transferred to the
account established for salaries and expenses of the Government
Accountability Office, and such amount shall be available upon
receipt and without fiscal year limitation to cover the full
costs of the audit and report.''.
SEC. 317. EXAMINERS AND ACCOUNTANTS.
(a) Examinations.--Section 1317 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4517) is amended--
(1) in subsection (a), by adding after the period at the
end the following: ``Each examination under this subsection of
a regulated entity shall include a review of the procedures
required to be established and maintained by the regulated
entity pursuant to section 1314(c) (relating to fraudulent
financial transactions) and the report regarding each such
examination shall describe any problems with such procedures
maintained by the regulated entity.'';
(2) in subsection (b)--
(A) by inserting ``of a regulated entity'' after
``under this section''; and
(B) by striking ``to determine the condition of an
enterprise for the purpose of ensuring its financial
safety and soundness'' and inserting ``or
appropriate''; and
(3) in subsection (c)--
(A) in the second sentence, by inserting ``to
conduct examinations under this section'' before the
period; and
(B) in the third sentence, by striking ``from
amounts available in the Federal Housing Enterprises
Oversight Fund''.
(b) Enhanced Authority To Hire Examiners and Accountants.--Section
1317 of the Housing and Community Development Act of 1992 (12 U.S.C.
4517) is amended by adding at the end the following new subsection:
``(g) Appointment of Accountants, Economists, Specialists, and
Examiners.--
``(1) Applicability.--This section applies with respect to
any position of examiner, accountant, specialist in financial
markets, specialist in information technology, and economist at
the Agency, with respect to supervision and regulation of the
regulated entities, that is in the competitive service.
``(2) Appointment authority.--The Director may appoint
candidates to any position described in paragraph (1)--
``(A) in accordance with the statutes, rules, and
regulations governing appointments in the excepted
service; and
``(B) notwithstanding any statutes, rules, and
regulations governing appointments in the competitive
service.
``(3) Rule of construction.--The appointment of a candidate
to a position under the authority of this subsection shall not
be considered to cause such position to be converted from the
competitive service to the excepted service.''.
(c) Repeal.--Section 20 of the Federal Home Loan Bank Act (12
U.S.C. 1440) is amended--
(1) by striking the section heading and inserting the
following: ``examinations and gao audits'';
(2) in the third sentence, by striking ``the Board and''
each place such term appears; and
(3) by striking the first two sentences and inserting the
following: ``The Federal home loan banks shall be subject to
examinations by the Director to the extent provided in section
1317 of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4517).''.
SEC. 318. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.
(a) In General.--Section 1318 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4518) is amended--
(1) in the section heading, by striking ``of excessive''
and inserting ``and withholding of executive'';
(2) by redesignating subsection (b) as subsection (d); and
(3) by inserting after subsection (a) the following new
subsections:
``(b) Factors.--In making any determination under subsection (a),
the Director may take into consideration any factors the Director
considers relevant, including any wrongdoing on the part of the
executive officer, and such wrongdoing shall include any fraudulent act
or omission, breach of trust or fiduciary duty, violation of law, rule,
regulation, order, or written agreement, and insider abuse with respect
to the regulated entity. The approval of an agreement or contract
pursuant to section 309(d)(3)(B) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1723a(d)(3)(B)) or section 303(h)(2)
of the Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1452(h)(2)) shall not preclude the Director from making any subsequent
determination under subsection (a).
``(c) Withholding of Compensation.--In carrying out subsection (a),
the Director may require a regulated entity to withhold any payment,
transfer, or disbursement of compensation to an executive officer, or
to place such compensation in an escrow account, during the review of
the reasonableness and comparability of compensation.''.
(b) Conforming Amendments.--
(1) Fannie mae.--Section 309(d) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1723a(d)) is
amended by adding at the end the following new paragraph:
``(4) Notwithstanding any other provision of this section, the
corporation shall not transfer, disburse, or pay compensation to any
executive officer, or enter into an agreement with such executive
officer, without the approval of the Director, for matters being
reviewed under section 1318 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518).''.
(2) Freddie mac.--Section 303(h) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1452(h)) is amended by
adding at the end the following new paragraph:
``(4) Notwithstanding any other provision of this section, the
Corporation shall not transfer, disburse, or pay compensation to any
executive officer, or enter into an agreement with such executive
officer, without the approval of the Director, for matters being
reviewed under section 1318 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518).''.
(3) Federal home loan banks.--Section 7 of the Federal Home
Loan Bank Act (12 U.S.C. 1427) is amended by adding at the end
the following new subsection:
``(l) Withholding of Compensation.--Notwithstanding any other
provision of this section, a Federal home loan bank shall not transfer,
disburse, or pay compensation to any executive officer, or enter into
an agreement with such executive officer, without the approval of the
Director, for matters being reviewed under section 1318 of the Federal
Housing Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4518).''.
SEC. 319. REVIEWS OF REGULATED ENTITIES.
Section 1319 of the Housing and Community Development Act of 1992
(12 U.S.C. 4519) is amended--
(1) by striking the section designation and heading and
inserting the following:
``SEC. 1319. REVIEWS OF REGULATED ENTITIES.'';
and
(2) by striking ``is a nationally recognized'' and all that
follows through ``1934'' and inserting the following: ``the
Director considers appropriate, including an entity that is
registered under section 15 of the Securities Exchange Act of
1934 (15 U.S.C. 78a) as a nationally registered statistical
rating organization''.
SEC. 320. INCLUSION OF MINORITIES AND WOMEN; DIVERSITY IN AGENCY
WORKFORCE.
Section 1319A of the Housing and Community Development Act of 1992
(12 U.S.C. 4520) is amended--
(1) in the section heading, by striking ``equal opportunity
in solicitation of contracts'' and inserting ``minority and
women inclusion; diversity requirements'';
(2) in subsection (a), by striking ``(a) In General.--Each
enterprise'' and inserting ``(e) Outreach.--Each regulated
entity''; and
(3) by striking subsection (b);
(4) by inserting before subsection (e), as so redesignated
by paragraph (2) of this section, the following new
subsections:
``(a) Office of Minority and Women Inclusion.--Each regulated
entity shall establish an Office of Minority and Women Inclusion, or
designate an office of the entity, that shall be responsible for
carrying out this section and all matters of the entity relating to
diversity in management, employment, and business activities in
accordance with such standards and requirements as the Director shall
establish.
``(b) Inclusion in All Levels of Business Activities.--Each
regulated entity shall develop and implement standards and procedures
to ensure, to the maximum extent possible, the inclusion and
utilization of minorities (as such term is defined in section 1204(c)
of the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 1811 note)) and women, and minority- and women-owned
businesses (as such terms are defined in section 21A(r)(4) of the
Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)) (including financial
institutions, investment banking firms, mortgage banking firms, asset
management firms, broker-dealers, financial services firms,
underwriters, accountants, brokers, investment consultants, and
providers of legal services) in all business and activities of the
regulated entity at all levels, including in procurement, insurance,
and all types of contracts (including contracts for the issuance or
guarantee of any debt, equity, or mortgage-related securities, the
management of its mortgage and securities portfolios, the making of its
equity investments, the purchase, sale and servicing of single- and
multi-family mortgage loans, and the implementation of its affordable
housing program and initiatives). The processes established by each
regulated entity for review and evaluation for contract proposals and
to hire service providers shall include a component that gives
consideration to the diversity of the applicant.
``(c) Applicability.--This section shall apply to all contracts of
a regulated entity for services of any kind, including services that
require the services of investment banking, asset management entities,
broker-dealers, financial services entities, underwriters, accountants,
investment consultants, and providers of legal services.
``(d) Inclusion in Annual Reports.--Each regulated entity shall
include, in the annual report submitted by the entity to the Director
pursuant to section 309(k) of the Federal National Mortgage Association
Charter Act (12 U.S.C. 1723a(k)), section 307(c) of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1456(c)), and section 20 of
the Federal Home Loan Bank Act (12 U.S.C. 1440), as applicable,
detailed information describing the actions taken by the entity
pursuant to this section, which shall include a statement of the total
amounts paid by the entity to third party contractors since the last
such report and the percentage of such amounts paid to businesses
described in subsection (b) of this section.''; and
(5) by adding at the end the following new subsection:
``(f) Diversity in Agency Workforce.--The Agency shall take
affirmative steps to seek diversity in its workforce at all levels of
the agency consistent with the demographic diversity of the United
States, which shall include--
``(1) heavily recruiting at historically Black colleges and
universities, Hispanic-serving institutions, women's colleges,
and colleges that typically serve majority minority
populations;
``(2) sponsoring and recruiting at job fairs in urban
communities, and placing employment advertisements in
newspapers and magazines oriented toward women and people of
color;
``(3) partnering with organizations that are focused on
developing opportunities for minorities and women to place
talented young minorities and women in industry internships,
summer employment, and full-time positions; and
``(4) where feasible, partnering with inner-city high
schools, girls' high schools, and high schools with majority
minority populations to establish or enhance financial literacy
programs and provide mentoring.''.
SEC. 321. REGULATIONS AND ORDERS.
Section 1319G of the Housing and Community Development Act of 1992
(12 U.S.C. 4526) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Authority.--The Director shall issue any regulations,
guidelines, and orders necessary to carry out the duties of the
Director under this title and each of the authorizing statutes to
ensure that the purposes of this title and such statutes are
accomplished.'';
(2) in subsection (b), by inserting ``, this title, or any
of the authorizing statutes'' after ``under this section''; and
(3) by striking subsection (c).
SEC. 322. NON-WAIVER OF PRIVILEGES.
Part 1 of subtitle A of title XIII of the Housing and Community
Development Act of 1992 (12 U.S.C. 4511) is amended by adding at the
end the following new section:
``SEC. 1319H. PRIVILEGES NOT AFFECTED BY DISCLOSURE.
``(a) In General.--The submission by any person of any information
to the Agency for any purpose in the course of any supervisory or
regulatory process of the Agency shall not be construed as waiving,
destroying, or otherwise affecting any privilege such person may claim
with respect to such information under Federal or State law as to any
person or entity other than the Agency.
``(b) Rule of Construction.--No provision of subsection (a) may be
construed as implying or establishing that--
``(1) any person waives any privilege applicable to
information that is submitted or transferred under any
circumstance to which subsection (a) does not apply; or
``(2) any person would waive any privilege applicable to
any information by submitting the information to the Agency,
but for this subsection.''.
SEC. 323. RISK-BASED CAPITAL REQUIREMENTS.
(a) In General.--Section 1361 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4611) is amended to read as follows:
``SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED ENTITIES.
``(a) In General.--
``(1) Enterprises.--The Director shall, by regulation,
establish risk-based capital requirements for the enterprises
to ensure that the enterprises operate in a safe and sound
manner, maintaining sufficient capital and reserves to support
the risks that arise in the operations and management of the
enterprises.
``(2) Federal home loan banks.--The Director shall
establish risk-based capital standards under section 6 of the
Federal Home Loan Bank Act for the Federal home loan banks.
``(b) Confidentiality of Information.--Any person that receives any
book, record, or information from the Director or a regulated entity to
enable the risk-based capital requirements established under this
section to be applied shall--
``(1) maintain the confidentiality of the book, record, or
information in a manner that is generally consistent with the
level of confidentiality established for the material by the
Director or the regulated entity; and
``(2) be exempt from section 552 of title 5, United States
Code, with respect to the book, record, or information.
``(c) No Limitation.--Nothing in this section shall limit the
authority of the Director to require other reports or undertakings, or
take other action, in furtherance of the responsibilities of the
Director under this Act.''.
(b) Federal Home Loan Banks Risk-Based Capital.--Section 6(a)(3) of
the Federal Home Loan Bank Act (12 U.S.C. 1426(a)(3)) is amended--
(1) by striking subparagraph (A) and inserting the
following new subparagraph:
``(A) Risk-based capital standards.--The Director
shall, by regulation, establish risk-based capital
standards for the Federal home loan banks to ensure
that the Federal home loan banks operate in a safe and
sound manner, with sufficient permanent capital and
reserves to support the risks that arise in the
operations and management of the Federal home loans
banks.''; and
(2) in subparagraph (B), by striking ``(A)(ii)'' and
inserting ``(A)''.
SEC. 324. MINIMUM AND CRITICAL CAPITAL LEVELS.
(a) Minimum Capital Level.--Section 1362 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4612) is amended--
(1) in subsection (a), by striking ``In General'' and
inserting ``Enterprises''; and
(2) by striking subsection (b) and inserting the following
new subsections:
``(b) Federal Home Loan Banks.--For purposes of this subtitle, the
minimum capital level for each Federal home loan bank shall be the
minimum capital required to be maintained to comply with the leverage
requirement for the bank established under section 6(a)(2) of the
Federal Home Loan Bank Act (12 U.S.C. 1426(a)(2)).
``(c) Establishment of Revised Minimum Capital Levels.--
Notwithstanding subsections (a) and (b) and notwithstanding the capital
classifications of the regulated entities, the Director may, by
regulations issued under section 1319G, establish a minimum capital
level for the enterprises, for the Federal home loan banks, or for both
the enterprises and the banks, that is higher than the level specified
in subsection (a) for the enterprises or the level specified in
subsection (b) for the Federal home loan banks, to the extent needed to
ensure that the regulated entities operate in a safe and sound manner.
``(d) Authority To Require Temporary Increase.--Notwithstanding
subsections (a) and (b) and any minimum capital level established
pursuant to subsection (c), the Director may, by order, increase the
minimum capital level for a regulated entity on a temporary basis for
such period as the Director may provide if the Director--
``(1) makes any determination specified in subparagraphs
(A) through (C) of section 1364(c)(1);
``(2) determines that the regulated entity has violated any
of the prudential standards established pursuant to section
1313A and, as a result of such violation, determines that an
unsafe and unsound condition exists; or
``(3) determines that an unsafe and unsound condition
exists, except that a temporary increase in minimum capital
imposed on a regulated entity pursuant to this paragraph shall
not remain in place for a period of more than 6 months unless
the Director makes a renewed determination of the existence of
an unsafe and unsound condition.
``(e) Authority To Establish Additional Capital and Reserve
Requirements for Particular Programs.--The Director may, at any time by
order or regulation, establish such capital or reserve requirements
with respect to any program or activity of a regulated entity as the
Director considers appropriate to ensure that the regulated entity
operates in a safe and sound manner, with sufficient capital and
reserves to support the risks that arise in the operations and
management of the regulated entity.
``(f) Periodic Review.--The Director shall periodically review the
amount of core capital maintained by the enterprises, the amount of
capital retained by the Federal home loan banks, and the minimum
capital levels established for such regulated entities pursuant to this
section. The Director shall rescind any temporary minimum capital level
increase if the Director determines that the circumstances or facts
justifying the temporary increase are no longer present.''.
(b) Critical Capital Levels.--
(1) In general.--Section 1363 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4613) is amended--
(A) by striking ``For'' and inserting ``(a)
Enterprises.--For''; and
(B) by adding at the end the following new
subsection:
``(b) Federal Home Loan Banks.--
``(1) In general.--For purposes of this subtitle, the
critical capital level for each Federal home loan bank shall be
such amount of capital as the Director shall, by regulation
require.
``(2) Consideration of other critical capital levels.--In
establishing the critical capital level under paragraph (1) for
the Federal home loan banks, the Director shall take due
consideration of the critical capital level established under
subsection (a) for the enterprises, with such modifications as
the Director determines to be appropriate to reflect the
difference in operations between the banks and the
enterprises.''.
(2) Regulations.--Not later than the expiration of the 180-
day period beginning on the effective date under section 365,
the Director of the Federal Housing Finance Agency shall issue
regulations pursuant to section 1363(b) of the Housing and
Community Development Act of 1992 (as added by paragraph (1) of
this subsection) establishing the critical capital level under
such section.
SEC. 325. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND
LIABILITIES.
(a) In General.--Subtitle B of title XIII of the Housing and
Community Development Act of 1992 (12 U.S.C. 4611 et seq.) is amended--
(1) by striking the subtitle designation and heading and
inserting the following:
``Subtitle B--Required Capital Levels for Regulated Entities, Special
Enforcement Powers, and Reviews of Assets and Liabilities'';
and
(2) by adding at the end the following new section:
``SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABILITIES.
``(a) In General.--The Director shall, by regulation, establish
standards by which the portfolio holdings, or rate of growth of the
portfolio holdings, of the enterprises will be deemed to be consistent
with the mission and the safe and sound operations of the enterprises.
In developing such standards, the Director shall consider--
``(1) the size or growth of the mortgage market;
``(2) the need for the portfolio in maintaining liquidity
or stability of the secondary mortgage market (including the
market for the mortgage-backed securities the enterprises
issue);
``(3) the need for an inventory of mortgages in connection
with securitizations;
``(4) the need for the portfolio to directly support the
affordable housing mission of the enterprises;
``(5) the liquidity needs of the enterprises;
``(6) any potential risks posed to the enterprises by the
nature of the portfolio holdings; and
``(7) any additional factors that the Director determines
to be necessary to carry out the purpose under the first
sentence of this subsection to establish standards for
assessing whether the portfolio holdings are consistent with
the mission and safe and sound operations of the enterprises.
``(b) Temporary Adjustments.--The Director may, by order, make
temporary adjustments to the established standards for an enterprise or
both enterprises, such as during times of economic distress or market
disruption.
``(c) Authority To Require Disposition or Acquisition.--The
Director shall monitor the portfolio of each enterprise. Pursuant to
subsection (a) and notwithstanding the capital classifications of the
enterprises, the Director may, by order, require an enterprise, under
such terms and conditions as the Director determines to be appropriate,
to dispose of or acquire any asset, if the Director determines that
such action is consistent with the purposes of this Act or any of the
authorizing statutes.''.
(b) Regulations.--Not later than the expiration of the 180-day
period beginning on the effective date under section 365, the Director
of the Federal Housing Finance Agency shall issue regulations pursuant
to section 1369E(a) of the Housing and Community Development Act of
1992 (as added by subsection (a) of this section) establishing the
portfolio holdings standards under such section.
SEC. 326. CORPORATE GOVERNANCE OF ENTERPRISES.
The Housing and Community Development Act of 1992 is amended by
inserting before section 1323 (12 U.S.C. 4543) the following new
section:
``SEC. 1322A. CORPORATE GOVERNANCE OF ENTERPRISES.
``(a) Board of Directors.--
``(1) Independence.--A majority of seated members of the
board of directors of each enterprise shall be independent
board members, as defined under rules set forth by the New York
Stock Exchange, as such rules may be amended from time to time.
``(2) Frequency of meetings.--To carry out its obligations
and duties under applicable laws, rules, regulations, and
guidelines, the board of directors of an enterprise shall meet
at least eight times a year and not less than once a calendar
quarter.
``(3) Non-management board member meetings.--The non-
management directors of an enterprise shall meet at regularly
scheduled executive sessions without management participation.
``(4) Quorum; prohibition on proxies.--For the transaction
of business, a quorum of the board of directors of an
enterprise shall be at least a majority of the seated board of
directors and a board member may not vote by proxy.
``(5) Information.--The management of an enterprise shall
provide a board member of the enterprise with such adequate and
appropriate information that a reasonable board member would
find important to the fulfillment of his or her fiduciary
duties and obligations.
``(6) Annual review.--At least annually, the board of
directors of each enterprise shall review, with appropriate
professional assistance, the requirements of laws, rules,
regulations, and guidelines that are applicable to its
activities and duties.
``(b) Committees of Boards of Directors.--
``(1) Frequency of meetings.--Any committee of the board of
directors of an enterprise shall meet with sufficient frequency
to carry out its obligations and duties under applicable laws,
rules, regulations, and guidelines.
``(2) Required committees.--Each enterprise shall provide
for the establishment, however styled, of the following
committees of the board of directors:
``(A) Audit committee.
``(B) Compensation committee.
``(C) Nominating/corporate governance committee.
Such committees shall be in compliance with the charter,
independence, composition, expertise, duties, responsibilities,
and other requirements set forth under section 10A(m) of the
Securities Exchange Act of 1934 (15 U.S.C. 78j-1(m)), with
respect to the audit committee, and under rules issued by the
New York Stock Exchange, as such rules may be amended from time
to time.
``(c) Compensation.--
``(1) In general.--The compensation of board members,
executive officers, and employees of an enterprise--
``(A) shall not be in excess of that which is
reasonable and appropriate;
``(B) shall be commensurate with the duties and
responsibilities of such persons;
``(C) shall be consistent with the long-term goals
of the enterprise;
``(D) shall not focus solely on earnings
performance, but shall take into account risk
management, operational stability and legal and
regulatory compliance as well; and
``(E) shall be undertaken in a manner that complies
with applicable laws, rules, and regulations.
``(2) Reimbursement.--If an enterprise is required to
prepare an accounting restatement due to the material
noncompliance of the enterprise, as a result of misconduct,
with any financial reporting requirement under the securities
laws, the chief executive officer and chief financial officer
of the enterprise shall reimburse the enterprise as provided
under section 304 of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
7243). This provision does not otherwise limit the authority of
the Agency to employ remedies available to it under its
enforcement authorities.
``(d) Code of Conduct and Ethics.--
``(1) In general.--An enterprise shall establish and
administer a written code of conduct and ethics that is
reasonably designed to assure the ability of board members,
executive officers, and employees of the enterprise to
discharge their duties and responsibilities, on behalf of the
enterprise, in an objective and impartial manner, and that
includes standards required under section 406 of the Sarbanes-
Oxley Act of 2002 (15 U.S.C. 7264) and other applicable laws,
rules, and regulations.
``(2) Review.--Not less than once every three years, an
enterprise shall review the adequacy of its code of conduct and
ethics for consistency with practices appropriate to the
enterprise and make any appropriate revisions to such code.
``(e) Conduct and Responsibilities of Board of Directors.--The
board of directors of an enterprise shall be responsible for directing
the conduct and affairs of the enterprise in furtherance of the safe
and sound operation of the enterprise and shall remain reasonably
informed of the condition, activities, and operations of the
enterprise. The responsibilities of the board of directors shall
include having in place adequate policies and procedures to assure its
oversight of, among other matters, the following:
``(1) Corporate strategy, major plans of action, risk
policy, programs for legal and regulatory compliance and
corporate performance, including prudent plans for growth and
allocation of adequate resources to manage operations risk.
``(2) Hiring and retention of qualified executive officers
and succession planning for such executive officers.
``(3) Compensation programs of the enterprise.
``(4) Integrity of accounting and financial reporting
systems of the enterprise, including independent audits and
systems of internal control.
``(5) Process and adequacy of reporting, disclosures, and
communications to shareholders, investors, and potential
investors.
``(6) Extensions of credit to board members and executive
officers.
``(7) Responsiveness of executive officers in providing
accurate and timely reports to Federal regulators and in
addressing the supervisory concerns of Federal regulators in a
timely and appropriate manner.
``(f) Prohibition of Extensions of Credit.--An enterprise may not
directly or indirectly, including through any subsidiary, extend or
maintain credit, arrange for the extension of credit, or renew an
extension of credit, in the form of a personal loan to or for any board
member or executive officer of the enterprise, as provided by section
13(k) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(k)).
``(g) Certification of Disclosures.--The chief executive officer
and the chief financial officer of an enterprise shall review each
quarterly report and annual report issued by the enterprise and such
reports shall include certifications by such officers as required by
section 302 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241).
``(h) Change of Audit Partner.--An enterprise may not accept audit
services from an external auditing firm if the lead or coordinating
audit partner who has primary responsibility for the external audit of
the enterprise, or the external audit partner who has responsibility
for reviewing the external audit has performed audit services for the
enterprise in each of the five previous fiscal years.
``(i) Compliance Program.--
``(1) Requirement.--Each enterprise shall establish and
maintain a compliance program that is reasonably designed to
assure that the enterprise complies with applicable laws,
rules, regulations, and internal controls.
``(2) Compliance officer.--The compliance program of an
enterprise shall be headed by a compliance officer, however
styled, who reports directly to the chief executive officer of
the enterprise. The compliance officer shall report regularly
to the board of directors or an appropriate committee of the
board of directors on compliance with and the adequacy of
current compliance policies and procedures of the enterprise,
and shall recommend any adjustments to such policies and
procedures that the compliance officer considers necessary and
appropriate.
``(j) Risk Management Program.--
``(1) Requirement.--Each enterprise shall establish and
maintain a risk management program that is reasonably designed
to manage the risks of the operations of the enterprise.
``(2) Risk management officer.--The risk management program
of an enterprise shall be headed by a risk management officer,
however styled, who reports directly to the chief executive
officer of the enterprise. The risk management officer shall
report regularly to the board of directors or an appropriate
committee of the board of directors on compliance with and the
adequacy of current risk management policies and procedures of
the enterprise, and shall recommend any adjustments to such
policies and procedures that the risk management officer
considers necessary and appropriate.
``(k) Compliance With Other Laws.--
``(1) Deregistered or unregistered common stock.--If an
enterprise deregisters or has not registered its common stock
with the Securities and Exchange Commission under the
Securities Exchange Act of 1934, the enterprise shall comply or
continue to comply with sections 10A(m) and 13(k) of the
Securities Exchange Act of 1934 (15 U.S.C. 78j-1(m), 78m(k))
and sections 302, 304, and 406 of the Sarbanes-Oxley Act of
2002 (15 U.S.C. 7241, 7243, 7264), subject to such requirements
as provided by subsection (l) of this section.
``(2) Registered common stock.--An enterprise that has its
common stock registered with the Securities and Exchange
Commission shall maintain such registered status, unless it
provides 60 days prior written notice to the Director stating
its intent to deregister and its understanding that it will
remain subject to the requirements of the sections of the
Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of
2002, subject to such requirements as provided by subsection
(l) of this section.
``(l) Other Matters.--The Director may from time to time establish
standards, by regulation, order, or guideline, regarding such other
corporate governance matters of the enterprises as the Director
considers appropriate.
``(m) Modification of Standards.--In connection with standards of
Federal or State law (including the Revised Model Corporation Act) or
New York Stock Exchange rules that are made applicable to an enterprise
by section 1710.10 of the Director's rules (12 CFR 1710.10) and by
subsections (a), (b), (g), (i), (j), and (k) of this section, the
Director, in the Director's sole discretion, may modify the standards
contained in this section or in part 1710 of the Director's rules (12
CFR Part 1710) in accordance with section 553 of title 5, United States
Code, and upon written notice to the enterprise.''.
SEC. 327. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT OF 1934.
The Housing and Community Development Act of 1992 is amended by
adding after section 1322A, as added by the preceding provisions of
this title, the following new section:
``SEC. 1322B. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT OF
1934.
``(a) In General.--Each regulated entity shall register at least
one class of the capital stock of such regulated entity, and maintain
such registration with the Securities and Exchange Commission, under
the Securities Exchange Act of 1934.
``(b) Enterprises.--Each enterprise shall comply with sections 14
and 16 of the Securities Exchange Act of 1934.''.
SEC. 328. LIAISON WITH FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.
Section 1007 of the Federal Financial Institutions Examination
Council Act of 1978 (12 U.S.C. 3306) is amended--
(1) in the section heading, by inserting after ``state''
the following: ``and federal housing finance agency''; and
(2) by inserting after ``financial institutions'' the
following: ``, and one representative of the Federal Housing
Finance Agency,''.
SEC. 329. GUARANTEE FEE STUDY.
(a) In General.--The Director of the Federal Housing Finance
Agency, in consultation with the heads of the federal banking agencies,
shall, not later than 18 months after the date of the enactment of this
Act, submit to the Congress a study concerning the pricing,
transparency and reporting of the Federal National Mortgage
Association, the Federal Home Loan Mortgage Corporation, and the
Federal home loan banks with regard to guarantee fees and concerning
analogous practices, transparency and reporting requirements (including
advances pricing practices by the Federal Home Loan Banks) of other
participants in the business of mortgage purchases and securitization.
(b) Factors.--The study required by this section shall examine
various factors such as credit risk, counterparty risk considerations,
economic value considerations, and volume considerations used by the
regulated entities (as such term is defined in section 1303 of the
Housing and Community Development Act of 1992) included in the study in
setting the amount of fees they charge.
(c) Contents of Report.--The report required under subsection (a)
shall identify and analyze--
(1) the factors used by each enterprise (as such term is
defined in section 1303 of the Housing and Community
Development Act of 1992) in determining the amount of the
guarantee fees it charges;
(2) the total revenue the enterprises earn from guarantee
fees;
(3) the total costs incurred by the enterprises for
providing guarantees;
(4) the average guarantee fee charged by the enterprises;
(5) an analysis of how and why the guarantee fees charged
differ from such fees charged during the previous year;
(6) a breakdown of the revenue and costs associated with
providing guarantees, based on product type and risk
classifications; and
(7) other relevant information on guarantee fees with other
participants in the mortgage and securitization business.
(d) Protection of Information.--Nothing in this section may be
construed to require or authorize the Director of the Federal Housing
Finance Agency, in connection with the study mandated by this section,
to disclose information of the enterprises or other organization that
is confidential or proprietary.
(e) Effective Date.--This section shall take effect on the date of
the enactment of this Act.
SEC. 330. CONFORMING AMENDMENTS.
(a) 1992 Act.--Part 1 of subtitle A of title XIII of the Housing
and Community Development Act of 1992 (12 U.S.C. 4511 et seq.), as
amended by the preceding provisions of this title, is further amended--
(1) by striking ``an enterprise'' each place such term
appears in such part (except in sections 1313(a)(2)(A),
1313A(b)(2)(B)(ii)(I), and 1316(b)(3)) and inserting ``a
regulated entity'';
(2) by striking ``the enterprise'' each place such term
appears in such part (except in section 1316(b)(3)) and
inserting ``the regulated entity'';
(3) by striking ``the enterprises'' each place such term
appears in such part (except in sections 1312(c)(2), and
1312(e)(2)) and inserting ``the regulated entities'';
(4) by striking ``each enterprise'' each place such term
appears in such part and inserting ``each regulated entity'';
(5) by striking ``Office'' each place such term appears in
such part (except in sections 1311(b)(2), 1312(b)(5), 1315(b),
and 1316(a)(4), (g), and (h), 1317(c), and 1319A(a)) and
inserting ``Agency'';
(6) in section 1315 (12 U.S.C. 4515)--
(A) in subsection (a)--
(i) in the subsection heading, by striking
``Office Personnel'' and inserting ``In
General''; and
(ii) by striking ``The'' and inserting
``Subject to subtitle C of the Federal Housing
Finance Reform Act of 2008, the'';
(B) by striking subsections (d) and (f); and
(C) by redesignating subsection (e) as subsection
(d);
(7) in section 1319B (12 U.S.C. 4521), by striking
``Committee on Banking, Finance and Urban Affairs'' each place
such term appears and inserting ``Committee on Financial
Services''; and
(8) in section 1319F (12 U.S.C. 4525), striking all that
follows ``United States Code'' and inserting ``, the Agency
shall be considered an agency responsible for the regulation or
supervision of financial institutions.''.
(b) Amendments to Fannie Mae Charter Act.--The Federal National
Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) is amended--
(1) by striking ``Director of the Office of Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development'' each place such term appears, and inserting
``Director of the Federal Housing Finance Agency'', in--
(A) section 303(c)(2) (12 U.S.C. 1718(c)(2));
(B) section 309(d)(3)(B) (12 U.S.C.
1723a(d)(3)(B)); and
(C) section 309(k)(1); and
(2) in section 309--
(A) in subsections (d)(3)(A) and (n)(1), by
striking ``Banking, Finance and Urban Affairs'' each
place such term appears and inserting ``Financial
Services''; and
(B) in subsection (m)--
(i) in paragraph (1), by striking
``Secretary'' the second place such term
appears and inserting ``Director'';
(ii) in paragraph (2), by striking
``Secretary'' the second place such term
appears and inserting ``Director''; and
(iii) by striking ``Secretary'' each other
place such term appears and inserting
``Director of the Federal Housing Finance
Agency''; and
(C) in subsection (n), by striking ``Secretary''
each place such term appears and inserting ``Director
of the Federal Housing Finance Agency''.
(c) Amendments to Freddie Mac Act.--The Federal Home Loan Mortgage
Corporation Act is amended--
(1) by striking ``Director of the Office of Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development'' each place such term appears, and inserting
``Director of the Federal Housing Finance Agency'', in--
(A) section 303(b)(2) (12 U.S.C. 1452(b)(2));
(B) section 303(h)(2) (12 U.S.C. 1452(h)(2)); and
(C) section 307(c)(1) (12 U.S.C. 1456(c)(1));
(2) in sections 303(h)(1) and 307(f)(1) (12 U.S.C.
1452(h)(1), 1456(f)(1)), by striking ``Banking, Finance and
Urban Affairs'' each place such term appears and inserting
``Financial Services'';
(3) in section 306(i) (12 U.S.C. 1455(i))--
(A) by striking ``1316(c)'' and inserting
``306(c)''; and
(B) by striking ``section 106'' and inserting
``section 1316''; and
(4) in section 307 (12 U.S.C. 1456))--
(A) in subsection (e)--
(i) in paragraph (1), by striking
``Secretary'' the second place such term
appears and inserting ``Director'';
(ii) in paragraph (2), by striking
``Secretary'' the second place such term
appears and inserting ``Director''; and
(iii) by striking ``Secretary'' each other
place such term appears and inserting
``Director of the Federal Housing Finance
Agency''; and
(B) in subsection (f), by striking ``Secretary''
each place such term appears and inserting ``Director
of the Federal Housing Finance Agency''.
CHAPTER 2--IMPROVEMENT OF MISSION SUPERVISION
SEC. 331. TRANSFER OF PRODUCT APPROVAL AND HOUSING GOAL OVERSIGHT.
Part 2 of subtitle A of title XIII of the Housing and Community
Development Act of 1992 (12 U.S.C. 4541 et seq.) is amended--
(1) by striking the designation and heading for the part
and inserting the following:
``PART 2--PRODUCT APPROVAL BY DIRECTOR, CORPORATE GOVERNANCE, AND
ESTABLISHMENT OF HOUSING GOALS'';
and
(2) by striking sections 1321 and 1322.
SEC. 332. REVIEW OF ENTERPRISE PRODUCTS.
(a) In General.--Part 2 of subtitle A of title XIII of the Housing
and Community Development Act of 1992 is amended by inserting before
section 1323 (12 U.S.C. 4543) the following new section:
``SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS OF ENTERPRISES.
``(a) In General.--The Director shall require each enterprise to
obtain the approval of the Director for any product of the enterprise
before initially offering the product.
``(b) Standard for Approval.--In considering any request for
approval of a product pursuant to subsection (a), the Director shall
make a determination that--
``(1) in the case of a product of the Federal National
Mortgage Association, the Director determines that the product
is authorized under paragraph (2), (3), (4), or (5) of section
302(b) or section 304 of the Federal National Mortgage
Association Charter Act, (12 U.S.C. 1717(b), 1719);
``(2) in the case of a product of the Federal Home Loan
Mortgage Corporation, the Director determines that the product
is authorized under paragraph (1), (4), or (5) of section
305(a) of the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1454(a));
``(3) the product is in the public interest;
``(4) the product is consistent with the safety and
soundness of the enterprise or the mortgage finance system; and
``(5) the product does not materially impair the efficiency
of the mortgage finance system.
``(c) Procedure for Approval.--
``(1) Submission of request.--An enterprise shall submit to
the Director a written request for approval of a product that
describes the product in such form as prescribed by order or
regulation of the Director.
``(2) Request for public comment.--Immediately upon receipt
of a request for approval of a product, as required under
paragraph (1), the Director shall publish notice of such
request and of the period for public comment pursuant to
paragraph (3) regarding the product, and a description of the
product proposed by the request. The Director shall give
interested parties the opportunity to respond in writing to the
proposed product.
``(3) Public comment period.--During the 30-day period
beginning on the date of publication pursuant to paragraph (2)
of a request for approval of a product, the Director shall
receive public comments regarding the proposed product.
``(4) Offering of product.--
``(A) In general.--Not later than 30 days after the
close of the public comment period described in
paragraph (3), the Director shall approve or deny the
product, specifying the grounds for such decision in
writing.
``(B) Failure to act.--If the Director fails to act
within the 30-day period described in subparagraph (A),
the enterprise may offer the product.
``(d) Expedited Review.--
``(1) Determination and notice.--If an enterprise
determines that any new activity, service, undertaking, or
offering is not a product, as defined in subsection (f), the
enterprise shall provide written notice to the Director prior
to the commencement of such activity, service, undertaking, or
offering.
``(2) Director determination of applicable procedure.--
Immediately upon receipt of any notice pursuant to paragraph
(1), the Director shall make a determination under paragraph
(3).
``(3) Determination and treatment as product.--If the
Director determines that any new activity, service,
undertaking, or offering consists of, relates to, or involves a
product--
``(A) the Director shall notify the enterprise of
the determination;
``(B) the new activity, service, undertaking, or
offering described in the notice under paragraph (1)
shall be considered a product for purposes of this
section; and
``(C) the enterprise shall withdraw its request or
submit a written request for approval of the product
pursuant to subsection (c).
``(e) Conditional Approval.--The Director may conditionally approve
the offering of any product by an enterprise, and may establish terms,
conditions, or limitations with respect to such product with which the
enterprise must comply in order to offer such product.
``(f) Definition of Product.--For purposes of this section, the
term `product' does not include--
``(1) the automated loan underwriting system of an
enterprise in existence as of the date of the enactment of the
Federal Housing Finance Reform Act of 2008, including any
upgrade to the technology, operating system, or software to
operate the underwriting system; or
``(2) any modification to the mortgage terms and conditions
or mortgage underwriting criteria relating to the mortgages
that are purchased or guaranteed by an enterprise: Provided,
That such modifications do not alter the underlying transaction
so as to include services or financing, other than residential
mortgage financing, or create significant new exposure to risk
for the enterprise or the holder of the mortgage.
``(g) No Limitation.--Nothing in this section shall be deemed to
restrict--
``(1) the safety and soundness authority of the Director
over all new and existing products or activities; or
``(2) the authority of the Director to review all new and
existing products or activities to determine that such products
or activities are consistent with the statutory mission of the
enterprise.''.
(b) Conforming Amendments.--
(1) Fannie mae.--Section 302(b)(6) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1717(b)(6)) is
amended--
(A) by striking ``implement any new program'' and
inserting ``initially offer any product'';
(B) by striking ``section 1303'' and inserting
``section 1321(f)''; and
(C) by striking ``before obtaining the approval of
the Secretary under section 1322'' and inserting
``except in accordance with section 1321''.
(2) Freddie mac.--Section 305(c) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1454(c)) is amended--
(A) by striking ``implement any new program'' and
inserting ``initially offer any product'';
(B) by striking ``section 1303'' and inserting
``section 1321(f)''; and
(C) by striking ``before obtaining the approval of
the Secretary under section 1322'' and inserting
``except in accordance with section 1321''.
(3) 1992 act.--Section 1303 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4502), as amended by the
preceding provisions of this title, is further amended--
(A) by striking paragraph (17) (relating to the
definition of ``new program''); and
(B) by redesignating paragraphs (18) through (23)
as paragraphs (17) through (22), respectively.
SEC. 333. CONFORMING LOAN LIMITS.
(a) Fannie Mae.--Section 302(b)(2) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1717(b)(2)) is amended--
(1) in the second sentence, by redesignating clause (A)
through (C) as clauses (i) through (iii), respectively;
(2) in the third sentence, by striking ``clause (A)'' and
inserting ``clause (i)'';
(3) in the 4th sentence, by striking ``the Resolution Trust
Corporation,'';
(4) by striking the 7th and 8th sentences and inserting the
following new sentences: ``For 2008, such limitations shall not
exceed $417,000 for a mortgage secured by a single-family
residence, $533,850 for a mortgage secured by a 2-family
residence, $645,300 for a mortgage secured by a 3-family
residence, and $801,950 for a mortgage secured by a 4-family
residence, except that such maximum limitations shall be
adjusted effective January 1 of each year beginning with 2009,
subject to the limitations in this paragraph. Each adjustment
shall be made by adding to or subtracting from each such amount
(as it may have been previously adjusted) a percentage thereof
equal to the percentage increase or decrease, during the most
recent 12-month or four-quarter period ending before the time
of determining such annual adjustment, in the housing price
index maintained by the Director of the Federal Housing Finance
Agency (pursuant to section 1322 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4541)).''.
(5) by inserting ``(A)'' after ``(2)''; and
(6) by adding at the end the following new subparagraph:
``(B)(i) Notwithstanding subparagraph (A), for mortgages originated
on or after January 1, 2009, the limitation on the maximum original
principal obligation of a mortgage that may be purchased by the
corporation shall be the higher of--
``(I) the limitation determined under subparagraph (A) for
a residence of the applicable size; or
``(II) 125 percent of the area median price for a residence
of the applicable size, but in no case to exceed 175 percent of
the limitation determined under subparagraph (A) for a
residence of the applicable size.
``(ii) The areas and area median prices used for purposes of the
determination under this subparagraph shall be the areas and area
median prices used by the Secretary of Housing and Urban Development in
determining the applicable limits under section 203(b)(2) of the
National Housing Act (12 U.S.C. 1709(b)(2)). A mortgage that is
eligible for purchase by the corporation at the time the mortgage is
originated under this subparagraph shall be eligible for such purchase
for the duration of the term of the mortgage.''.
(b) Freddie Mac.--Section 305(a)(2) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is amended--
(1) in the first sentence, by redesignating clause (A)
through (C) as clauses (i) through (iii), respectively;
(2) in the second sentence, by striking ``clause (A)'' and
inserting ``clause (i)'';
(3) in the third sentence by striking ``the Resolution
Trust Corporation'';
(4) by striking the 6th and 7th sentence and inserting the
following new sentences: ``For 2008, such limitations shall not
exceed $417,000 for a mortgage secured by a single-family
residence, $533,850 for a mortgage secured by a 2-family
residence, $645,300 for a mortgage secured by a 3-family
residence, and $801,950 for a mortgage secured by a 4-family
residence, except that such maximum limitations shall be
adjusted effective January 1 of each year beginning with 2009,
subject to the limitations in this paragraph. Each adjustment
shall be made by adding to or subtracting from each such amount
(as it may have been previously adjusted) a percentage thereof
equal to the percentage increase or decrease, during the most
recent 12-month or four-quarter period ending before the time
of determining such annual adjustment, in the housing price
index maintained by the Director of the Federal Housing Finance
Agency (pursuant to section 1322 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4541)).'';
(5) by inserting ``(A)'' after ``(2)''; and
(6) by adding at the end the following new subparagraph:
``(B)(i) Notwithstanding subparagraph (A), for mortgages originated
on or after January 1, 2009, the limitation on the maximum original
principal obligation of a mortgage that may be purchased by the
Corporation shall be the higher of--
``(I) the limitation determined under subparagraph (A) for
a residence of the applicable size; or
``(II) 125 percent of the area median price for a residence
of the applicable size, but in no case to exceed 175 percent of
the limitation determined under subparagraph (A) for a
residence of the applicable size.
``(ii) The areas and area median prices used for purposes of the
determination under this subparagraph shall be the areas and area
median prices used by the Secretary of Housing and Urban Development in
determining the applicable limits under section 203(b)(2) of the
National Housing Act (12 U.S.C. 1709(b)(2)). A mortgage that is
eligible for purchase by the Corporation at the time the mortgage is
originated under this subparagraph shall be eligible for such purchase
for the duration of the term of the mortgage.''.
(c) Housing Price Index.--Subpart A of part 2 of subtitle A of
title XIII of the Housing and Community Development Act of 1992 (as
amended by the preceding provisions of this title) is amended by
inserting after section 1321 (as added by the preceding provisions of
this title) the following new section:
``SEC. 1322. HOUSING PRICE INDEX.
``(a) In General.--The Director shall establish and maintain a
method of assessing the national average 1-family house price for use
for adjusting the conforming loan limitations of the enterprises. In
establishing such method, the Director shall take into consideration
the monthly survey of all major lenders conducted by the Federal
Housing Finance Agency to determine the national average 1-family house
price, the House Price Index maintained by the Office of Federal
Housing Enterprise Oversight of the Department of Housing and Urban
Development before the effective date under section 365 of the Federal
Housing Finance Reform Act of 2008, any appropriate house price indexes
of the Bureau of the Census of the Department of Commerce, and any
other indexes or measures that the Director considers appropriate.
``(b) GAO Audit.--
``(1) In general.--At such times as are required under
paragraph (2), the Comptroller General of the United States
shall conduct an audit of the methodology established by the
Director under subsection (a) to determine whether the
methodology established is an accurate and appropriate means of
measuring changes to the national average 1-family house price.
``(2) Timing.--An audit referred to in paragraph (1) shall
be conducted and completed not later than the expiration of the
180-day period that begins upon each of the following dates:
``(A) Establishment.--The date upon which such
methodology is initially established under subsection
(a) in final form by the Director.
``(B) Modification or amendment.--Each date upon
which any modification or amendment to such methodology
is adopted in final form by the Director.
``(3) Report.--Within 30 days of the completion of any
audit conducted under this subsection, the Comptroller General
shall submit a report detailing the results and conclusions of
the audit to the Director, the Committee on Financial Services
of the House of Representatives, and the Committee on Banking,
Housing, and Urban Affairs of the Senate.''.
(d) Sense of Congress.--It is the sense of the Congress that the
securitization of mortgages by the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation plays an
important role in providing liquidity to the United States housing
markets. Therefore, the Congress encourages the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation to
securitize mortgages acquired under the increased conforming loan
limits established by the amendments made by this section, to the
extent that such securitizations can be effected in a timely and
efficient manner that does not impose additional costs for mortgages
originated, purchased, or securitized under the existing limits or
interfere with the goal of adding liquidity to the market.
(e) Effective Date.--The amendments made by this section shall take
effect on, and shall apply beginning on, January 1, 2009.
SEC. 334. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.
(a) In General.--The Housing and Community Development Act of 1992
is amended by striking section 1324 (12 U.S.C. 4544) and inserting the
following new section:
``SEC. 1324. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.
``(a) In General.--After reviewing and analyzing the reports
submitted under section 309(n) of the Federal National Mortgage
Association Charter Act, section 307(f) of the Federal Home Loan
Mortgage Corporation Act, and section 10(j)(11) of the Federal Home
Loan Bank Act (12 U.S.C. 1430(j)(11)), the Director shall submit a
report, not later than October 30 of each year, to the Committee on
Financial Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate, on the activities of
each regulated entity.
``(b) Contents.--The report shall--
``(1) discuss the extent to which--
``(A) each enterprise is achieving the annual
housing goals established under subpart B of this part;
``(B) each enterprise is complying with section
1337;
``(C) each Federal home loan bank is complying with
section 10(j) of the Federal Home Loan Bank Act; and
``(D) each regulated entity is achieving the
purposes of the regulated entity established by law;
``(2) aggregate and analyze relevant data on income to
assess the compliance by each enterprise with the housing goals
established under subpart B;
``(3) aggregate and analyze data on income, race, and
gender by census tract and other relevant classifications, and
compare such data with larger demographic, housing, and
economic trends;
``(4) examine actions that--
``(A) each enterprise has undertaken or could
undertake to promote and expand the annual goals
established under subpart B and the purposes of the
enterprise established by law; and
``(B) each Federal home loan bank has taken or
could undertake to promote and expand the community
investment program and affordable housing program of
the bank established under subsections (i) and (j) of
section 10 of the Federal Home Loan Bank Act;
``(5) examine the primary and secondary multifamily housing
mortgage markets and describe--
``(A) the availability and liquidity of mortgage
credit;
``(B) the status of efforts to provide standard
credit terms and underwriting guidelines for
multifamily housing and to securitize such mortgage
products; and
``(C) any factors inhibiting such standardization
and securitization;
``(6) examine actions each regulated entity has undertaken
and could undertake to promote and expand opportunities for
first-time homebuyers, including the use of alternative credit
scoring;
``(7) describe any actions taken under section 1325(5) with
respect to originators found to violate fair lending
procedures;
``(8) discuss and analyze existing conditions and trends,
including conditions and trends relating to pricing, in the
housing markets and mortgage markets; and
``(9) identify the extent to which each enterprise is
involved in mortgage purchases and secondary market activities
involving subprime loans (as identified in accordance with the
regulations issued pursuant to section 334(b) of the Federal
Housing Finance Reform Act of 2008) and compare the
characteristics of subprime loans purchased and securitized by
the enterprises to other loans purchased and securitized by the
enterprises.
``(c) Data Collection and Reporting.--
``(1) In general.--To assist the Director in analyzing the
matters described in subsection (b) and establishing the
methodology described in section 1322, the Director shall
conduct, on a monthly basis, a survey of mortgage markets in
accordance with this subsection.
``(2) Data points.--Each monthly survey conducted by the
Director under paragraph (1) shall collect data on--
``(A) the characteristics of individual mortgages
that are eligible for purchase by the enterprises and
the characteristics of individual mortgages that are
not eligible for purchase by the enterprises including,
in both cases, information concerning--
``(i) the price of the house that secures
the mortgage;
``(ii) the loan-to-value ratio of the
mortgage, which shall reflect any secondary
liens on the relevant property;
``(iii) the terms of the mortgage;
``(iv) the creditworthiness of the borrower
or borrowers; and
``(v) whether the mortgage, in the case of
a conforming mortgage, was purchased by an
enterprise; and
``(B) such other matters as the Director determines
to be appropriate.
``(3) Public availability.--The Director shall make any
data collected by the Director in connection with the conduct
of a monthly survey available to the public in a timely manner,
provided that the Director may modify the data released to the
public to ensure that the data is not released in an
identifiable form.
``(4) Definition.--For purposes of this subsection, the
term `identifiable form' means any representation of
information that permits the identity of a borrower to which
the information relates to be reasonably inferred by either
direct or indirect means.''.
(b) Standards for Subprime Loans.--The Director shall, not later
than one year after the effective date under section 365, by
regulations issued under section 1316G of the Housing and Community
Development Act of 1992, establish standards by which mortgages
purchased and mortgages purchased and securitized shall be
characterized as subprime for the purpose of, and only for the purpose
of, complying with the reporting requirement under section 1324(b)(9)
of such Act.
SEC. 335. ANNUAL REPORTS BY REGULATED ENTITIES ON AFFORDABLE HOUSING
STOCK.
The Housing and Community Development Act of 1992 is amended by
inserting after section 1328 (12 U.S.C. 4548) the following new
section:
``SEC. 1329. ANNUAL REPORTS ON AFFORDABLE HOUSING STOCK.
``(a) In General.--To obtain information helpful in applying the
formula under section 1337(c)(2) for the affordable housing program
under such section and for other appropriate uses, the regulated
entities shall conduct, or provide for the conducting of, a study on an
annual basis to determine the levels of affordable housing inventory,
and the changes in such levels, in communities throughout the United
States.
``(b) Contents.--The annual study under this section shall
determine, for the United States, each State, and each community within
each State--
``(1) the level of affordable housing inventory, including
affordable rental dwelling units and affordable homeownership
dwelling units;
``(2) any changes to the level of such inventory during the
12-month period of the study under this section, including--
``(A) any additions to such inventory,
disaggregated by the category of such additions
(including new construction or housing conversion);
``(B) any subtractions from such inventory,
disaggregated by the category of such subtractions
(including abandonment, demolition, or upgrade to
market-rate housing);
``(C) the number of new affordable dwelling units
placed in service; and
``(D) the number of affordable housing dwelling
units withdrawn from service;
``(3) the types of financing used to build any dwelling
units added to such inventory level and the period during which
such units are required to remain affordable;
``(4) any excess demand for affordable housing, including
the number of households on rental housing waiting lists and
the tenure of the wait on such lists; and
``(5) such other information as the Director may require.
``(c) Report.--For each annual study conducted pursuant to this
section, the regulated entities shall submit to the Congress, and make
publicly available, a report setting forth the findings of the study.
``(d) Regulations and Timing.--The Director shall, by regulation,
establish requirements for the studies and reports under this section,
including deadlines for the submission of such annual reports and
standards for determining affordable housing.''.
SEC. 336. MORTGAGOR IDENTIFICATION REQUIREMENTS FOR MORTGAGES OF
REGULATED ENTITIES.
(a) In General.--Subpart A of part 2 of subtitle A of title XIII of
the Housing and Community Development Act of 1992 (12 U.S.C. 4541 et
seq.), as amended by the preceding provisions of this title, is further
amended by adding at the end the following new section:
``SEC. 1330. MORTGAGOR IDENTIFICATION REQUIREMENTS FOR MORTGAGES OF
REGULATED ENTITIES.
``(a) Limitation.--The Director shall by regulation establish
standards, and shall enforce compliance with such standards, that--
``(1) prohibit the enterprises from the purchase, service,
holding, selling, lending on the security of, or otherwise
dealing with any mortgage on a one- to four-family residence
that will be used as the principal residence of the mortgagor
that does not meet the requirements under subsection (b); and
``(2) prohibit the Federal home loan banks from providing
any advances to a member for use in financing, and from
accepting as collateral for any advance to a member, any
mortgage on a one- to four-family residence that will be used
as the principal residence of the mortgagor that does not meet
the requirements under subsection (b).
``(b) Identification Requirements.--The requirements under this
subsection with respect to a mortgage are that the mortgagor have, at
the time of settlement on the mortgage, a Social Security account
number.''.
(b) Fannie Mae.--Section 304 of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1719) is amended by adding at the
end the following new subsection:
``(g) Prohibition Regarding Mortgagor Identification Requirement.--
Nothing in this Act may be construed to authorize the corporation to
purchase, service, hold, sell, lend on the security of, or otherwise
deal with any mortgage that the corporation is prohibited from so
dealing with under the standards issued under section 1330 of the
Housing and Community Development Act of 1992 by the Director of the
Federal Housing Finance Agency.''.
(c) Freddie Mac.--Section 305 of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1454) is amended by adding at the end the
following new subsection:
``(d) Prohibition Regarding Mortgagor Identification
Requirements.--Nothing in this Act may be construed to authorize the
Corporation to purchase, service, hold, sell, lend on the security of,
or otherwise deal with any mortgage that the Corporation is prohibited
from so dealing with under the standards issued under section 1330 of
the Housing and Community Development Act of 1992 by the Director of
the Federal Housing Finance Agency.''.
(d) Federal Home Loan Banks.--Section 10(a) of the Federal Home
Loan Bank Act (12 U.S.C. 1430(a)) is amended--
(1) by redesignating paragraph (6) as paragraph (7); and
(2) by inserting after paragraph (5) the following new
paragraph:
``(6) Prohibition regarding mortgagor identification
requirements.--Nothing in this Act may be construed to
authorize a Federal Home Loan Bank to provide any advance to a
member for use in financing, or accept as collateral for an
advance under this section, any mortgage that a Bank is
prohibited from so accepting under the standards issued under
section 1330 of the Housing and Community Development Act of
1992 by the Director of the Federal Housing Finance Agency.''.
SEC. 337. REVISION OF HOUSING GOALS.
(a) Housing Goals.--The Housing and Community Development Act of
1992 is amended by striking sections 1331 through 1334 (12 U.S.C. 4561-
4) and inserting the following new sections:
``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.
``(a) In General.--The Director shall establish, effective for the
first year that begins after the effective date under section 365 of
the Federal Housing Finance Reform Act of 2008 and each year
thereafter, annual housing goals, with respect to the mortgage
purchases by the enterprises, as follows:
``(1) Single family housing goals.--Three single-family
housing goals under section 1332.
``(2) Multifamily special affordable housing goals.--A
multifamily special affordable housing goal under section 1333.
``(b) Eliminating Interest Rate Disparities.--
``(1) In general.--Upon request by the Director, an
enterprise shall provide to the Director, in a form determined
by the Director, data the Director may review to determine
whether there exist disparities in interest rates charged on
mortgages to borrowers who are minorities as compared with
comparable mortgages to borrowers of similar creditworthiness
who are not minorities.
``(2) Remedial actions upon preliminary finding.--Upon a
preliminary finding by the Director that a pattern of
disparities in interest rates with respect to any lender or
lenders exists pursuant to the data provided by an enterprise
in paragraph (1), the Director shall--
``(A) refer the preliminary finding to the
appropriate regulatory or enforcement agency for
further review;
``(B) require the enterprise to submit additional
data with respect to any lender or lenders, as
appropriate and to the extent practicable, to the
Director who shall submit any such additional data to
the regulatory or enforcement agency for appropriate
action; and
``(C) require the enterprise to undertake remedial
actions, as appropriate, pursuant to section 1325(5)
(12 U.S.C. 4545(5)).
``(3) Annual report to congress.--The Director shall submit
to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate a report describing the actions
taken, and being taken, by the Director to carry out this
subsection. No such report shall identify any lender or lenders
who have not been found to have engaged in discriminatory
lending practices pursuant to a final adjudication on the
record, and after opportunity for an administrative hearing, in
accordance with subchapter II of chapter 5 of title 5, United
States Code.
``(4) Protection of identity of individuals.--In carrying
out this subsection, the Director shall ensure that no
property-related or financial information that would enable a
borrower to be identified shall be made public.
``(c) Timing.--The Director shall establish an annual deadline by
which the Director shall establish the annual housing goals under this
subpart for each year, taking into consideration the need for the
enterprises to reasonably and sufficiently plan their operations and
activities in advance, including operations and activities necessary to
meet such annual goals.
``SEC. 1332. SINGLE-FAMILY HOUSING GOALS.
``(a) In General.--The Director shall establish annual goals for
the purchase by each enterprise of conventional, conforming, single-
family, purchase money mortgages financing owner-occupied and rental
housing for each of the following categories of families:
``(1) Low-income families.
``(2) Families that reside in low-income areas.
``(3) Very low-income families.
``(b) Refinance Subgoal.--
``(1) In general.--The Director shall establish a separate
subgoal within each goal under subsection (a)(1) for the
purchase by each enterprise of mortgages for low-income
families on single family housing given to pay off or prepay an
existing loan secured by the same property. The Director shall,
for each year, determine whether each enterprise has complied
with the subgoal under this subsection in the same manner
provided under this section for determining compliance with the
housing goals.
``(2) Enforcement.--For purposes of section 1336, the
subgoal established under paragraph (1) of this subsection
shall be considered to be a housing goal established under this
section. Such subgoal shall not be enforceable under any other
provision of this title (including subpart C of this part)
other than section 1336 or under any provision of the Federal
National Mortgage Association Charter Act or the Federal Home
Loan Mortgage Corporation Act.
``(c) Determination of Compliance.--The Director shall determine,
for each year that the housing goals under this section are in effect
pursuant to section 1331(a), whether each enterprise has complied with
the single-family housing goals established under this section for such
year. An enterprise shall be considered to be in compliance with such a
goal for a year only if, for each of the types of families described in
subsection (a), the percentage of the number of conventional,
conforming, single-family, owner-occupied or rental, as applicable,
purchase money mortgages purchased by each enterprise in such year that
serve such families, meets or exceeds the target for the year for such
type of family that is established under subsection (d).
``(d) Annual Targets.--
``(1) In general.--Except as provided in paragraph (2), for
each of the types of families described in subsection (a), the
target under this subsection for a year shall be the average
percentage, for the three years that most recently precede such
year and for which information under the Home Mortgage
Disclosure Act of 1975 is publicly available, of the number of
conventional, conforming, single-family, owner-occupied or
rental, as applicable, purchase money mortgages originated in
such year that serves such type of family, as determined by the
Director using the information obtained and determined pursuant
to paragraphs (3) and (4).
``(2) Authority to increase targets.--
``(A) In general.--The Director may, for any year,
establish by regulation, for any or all of the types of
families described in subsection (a), percentage
targets that are higher than the percentages for such
year determined pursuant to paragraph (1), to reflect
expected changes in market performance related to such
information under the Home Mortgage Disclosure Act of
1975.
``(B) Factors.--In establishing any targets
pursuant to subparagraph (A), the Director shall
consider the following factors:
``(i) National housing needs.
``(ii) Economic, housing, and demographic
conditions.
``(iii) The performance and effort of the
enterprises toward achieving the housing goals
under this section in previous years.
``(iv) The size of the conventional
mortgage market serving each of the types of
families described in subsection (a) relative
to the size of the overall conventional
mortgage market.
``(v) The ability of the enterprise to lead
the industry in making mortgage credit
available.
``(vi) The need to maintain the sound
financial condition of the enterprises.
``(3) HMDA information.--The Director shall annually obtain
information submitted in compliance with the Home Mortgage
Disclosure Act of 1975 regarding conventional, conforming,
single-family, owner-occupied or rental, as applicable,
purchase money mortgages originated and purchased for the
previous year.
``(4) Conforming mortgages.--In determining whether a
mortgage is a conforming mortgage for purposes of this
paragraph, the Director shall consider the original principal
balance of the mortgage loan to be the principal balance as
reported in the information referred to in paragraph (3), as
rounded to the nearest thousand dollars.
``(e) Notice of Determination and Enterprise Comment.--
``(1) Notice.--Within 30 days of making a determination
under subsection (c) regarding a compliance of an enterprise
for a year with a housing goal established under this section
and before any public disclosure thereof, the Director shall
provide notice of the determination to the enterprise, which
shall include an analysis and comparison, by the Director, of
the performance of the enterprise for the year and the targets
for the year under subsection (d).
``(2) Comment period.--The Director shall provide each
enterprise an opportunity to comment on the determination
during the 30-day period beginning upon receipt by the
enterprise of the notice.
``(f) Use of Borrower Income.--In monitoring the performance of
each enterprise pursuant to the housing goals under this section and
evaluating such performance (for purposes of section 1336), the
Director shall consider a mortgagor's income to be such income at the
time of origination of the mortgage.
``(g) Consideration of Units in Single-Family Rental Housing.--In
establishing any goal under this subpart, the Director may take into
consideration the number of housing units financed by any mortgage on
single-family rental housing purchased by an enterprise.
``SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.
``(a) Establishment.--
``(1) In general.--The Director shall establish, by
regulation, an annual goal for the purchase by each enterprise
of each of the following types of mortgages on multifamily
housing:
``(A) Mortgages that finance dwelling units for
low-income families.
``(B) Mortgages that finance dwelling units for
very low-income families.
``(C) Mortgages that finance dwelling units
assisted by the low-income housing tax credit under
section 42 of the Internal Revenue Code of 1986.
``(2) Additional requirements for smaller projects.--The
Director shall establish, within the goal under this section,
additional requirements for the purchase by each enterprise of
mortgages described in paragraph (1) for multifamily housing
projects of a smaller or limited size, which may be based on
the number of dwelling units in the project or the amount of
the mortgage, or both, and shall include multifamily housing
projects of such smaller sizes as are typical among such
projects that serve rural areas.
``(3) Factors.--In establishing the goal under this section
relating to mortgages on multifamily housing for an enterprise
for a year, the Director shall consider--
``(A) national multifamily mortgage credit needs;
``(B) the performance and effort of the enterprise
in making mortgage credit available for multifamily
housing in previous years;
``(C) the size of the multifamily mortgage market;
``(D) the ability of the enterprise to lead the
industry in making mortgage credit available,
especially for underserved markets, such as for small
multifamily projects of 5 to 50 units, multifamily
properties in need of rehabilitation, and multifamily
properties located in rural areas; and
``(E) the need to maintain the sound financial
condition of the enterprise.
``(b) Units Financed by Housing Finance Agency Bonds.--The Director
shall give credit toward the achievement of the multifamily special
affordable housing goal under this section (for purposes of section
1336) to dwelling units in multifamily housing that otherwise qualifies
under such goal and that is financed by tax-exempt or taxable bonds
issued by a State or local housing finance agency, but only if such
bonds--
``(1) are secured by a guarantee of the enterprise; or
``(2) are not investment grade and are purchased by the
enterprise.
``(c) Use of Tenant Income or Rent.--The Director shall monitor the
performance of each enterprise in meeting the goals established under
this section and shall evaluate such performance (for purposes of
section 1336) based on--
``(1) the income of the prospective or actual tenants of
the property, where such data are available; or
``(2) where the data referred to in paragraph (1) are not
available, rent levels affordable to low-income and very low-
income families.
A rent level shall be considered to be affordable for purposes of this
subsection for an income category referred to in this subsection if it
does not exceed 30 percent of the maximum income level of such income
category, with appropriate adjustments for unit size as measured by the
number of bedrooms.
``(d) Determination of Compliance.--The Director shall, for each
year that the housing goal under this section is in effect pursuant to
section 1331(a), determine whether each enterprise has complied with
such goal and the additional requirements under subsection (a)(2).
``SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS.
``(a) Authority.--An enterprise may petition the Director in
writing at any time during a year to reduce the level of any goal for
such year established pursuant to this subpart.
``(b) Standard for Reduction.--The Director may reduce the level
for a goal pursuant to such a petition only if--
``(1) market and economic conditions or the financial
condition of the enterprise require such action; or
``(2) efforts to meet the goal would result in the
constraint of liquidity, over-investment in certain market
segments, or other consequences contrary to the intent of this
subpart, or section 301(3) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1716(3)) or section 301(3)
of the Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1451 note), as applicable.
``(c) Determination.--The Director shall make a determination
regarding any proposed reduction within 30 days of receipt of the
petition regarding the reduction. The Director may extend such period
for a single additional 15-day period, but only if the Director
requests additional information from the enterprise. A denial by the
Director to reduce the level of any goal under this section may be
appealed to the United States District Court for the District of
Columbia or the United States district court in the jurisdiction in
which the headquarters of an enterprise is located.''.
(b) Conforming Amendments.--The Housing and Community Development
Act of 1992 is amended--
(1) in section 1335(a) (12 U.S.C. 4565(a)), in the matter
preceding paragraph (1), by striking ``low- and moderate-income
housing goal'' and all that follows through ``section 1334''
and inserting ``housing goals established under this subpart'';
and
(2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by
striking ``sections 1332, 1333, and 1334,'' and inserting
``this subpart''.
(c) Definitions.--Section 1303 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4502), as amended by the preceding
provisions of this title, is further amended--
(1) in paragraph (22) (relating to the definition of ``very
low-income''), by striking ``60 percent'' each place such term
appears and inserting ``50 percent'';
(2) by redesignating paragraphs (19) through (22) as
paragraphs (23) through (26), respectively;
(3) by inserting after paragraph (18) the following new
paragraph:
``(22) Rural area.--The term `rural area' has the meaning
given such term in section 520 of the Housing Act of 1949 (42
U.S.C. 1490), except that such term includes micropolitan areas
and tribal trust lands.''.
(4) by redesignating paragraphs (13) through (18) as
paragraphs (16) through (21), respectively;
(5) by inserting after paragraph (12) the following new
paragraph:
``(15) Low-income area.--The term `low income area' means a
census tract or block numbering area in which the median income
does not exceed 80 percent of the median income for the area in
which such census tract or block numbering area is located,
and, for the purposes of section 1332(a)(2), shall include
families having incomes not greater than 100 percent of the
area median income who reside in minority census tracts.'';
(6) by redesignating paragraphs (11) and (12) as paragraphs
(13) and (14), respectively;
(7) by inserting after paragraph (10) the following new
paragraph:
``(12) Extremely low-income.--The term `extremely low-
income' means--
``(A) in the case of owner-occupied units, income
not in excess of 30 percent of the area median income;
and
``(B) in the case of rental units, income not in
excess of 30 percent of the area median income, with
adjustments for smaller and larger families, as
determined by the Secretary.'';
(8) by redesignating paragraphs (7) through (10) as
paragraphs (8) through (11), respectively; and
(9) by inserting after paragraph (6) the following new
paragraph:
``(7) Conforming mortgage.--The term `conforming mortgage'
means, with respect to an enterprise, a conventional mortgage
having an original principal obligation that does not exceed
the dollar limitation, in effect at the time of such
origination, under, as applicable--
``(A) section 302(b)(2) of the Federal National
Mortgage Association Charter Act; or
``(B) section 305(a)(2) of the Federal Home Loan
Mortgage Corporation Act.''.
SEC. 338. DUTY TO SERVE UNDERSERVED MARKETS.
(a) Establishment and Evaluation of Performance.--Section 1335 of
the Housing and Community Development Act of 1992 (12 U.S.C. 4565) is
amended--
(1) in the section heading, by inserting ``duty to serve
underserved markets and'' before ``other'';
(2) by striking subsection (b);
(3) in subsection (a)--
(A) in the matter preceding paragraph (1), by
inserting ``and to carry out the duty under subsection
(a) of this section'' before ``, each enterprise
shall'';
(B) in paragraph (3), by inserting ``and'' after
the semicolon at the end;
(C) in paragraph (4), by striking ``; and'' and
inserting a period;
(D) by striking paragraph (5); and
(E) by redesignating such subsection as subsection
(b);
(4) by inserting before subsection (b) (as so redesignated
by paragraph (3)(E) of this subsection) the following new
subsection:
``(a) Duty To Serve Underserved Markets.--
``(1) Duty.--In accordance with the purpose of the
enterprises under section 301(3) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1716) and section
301(b)(3) of the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1451 note) to undertake activities relating to mortgages
on housing for very low-, low-, and moderate-income families
involving a reasonable economic return that may be less than
the return earned on other activities, each enterprise shall
have the duty to increase the liquidity of mortgage investments
and improve the distribution of investment capital available
for mortgage financing for underserved markets.
``(2) Underserved markets.--To meet its duty under
paragraph (1), each enterprise shall comply with the following
requirements with respect to the following underserved markets:
``(A) Manufactured housing.--The enterprise shall
lead the industry in developing loan products and
flexible underwriting guidelines to facilitate a
secondary market for mortgages on manufactured homes
for very low-, low-, and moderate-income families.
``(B) Affordable housing preservation.--The
enterprise shall lead the industry in developing loan
products and flexible underwriting guidelines to
facilitate a secondary market to preserve housing
affordable to very low-, low-, and moderate-income
families, including housing projects subsidized under--
``(i) the project-based and tenant-based
rental assistance programs under section 8 of
the United States Housing Act of 1937;
``(ii) the program under section 236 of the
National Housing Act;
``(iii) the below-market interest rate
mortgage program under section 221(d)(4) of the
National Housing Act;
``(iv) the supportive housing for the
elderly program under section 202 of the
Housing Act of 1959;
``(v) the supportive housing program for
persons with disabilities under section 811 of
the Cranston-Gonzalez National Affordable
Housing Act;
``(vi) the programs under title IV of the
McKinney-Vento Homeless Assistance Act (42
U.S.C. 11361 et seq.), but only permanent
supportive housing projects subsidized under
such programs; and
``(vii) the rural rental housing program
under section 515 of the Housing Act of 1949.
``(C) Rural and other underserved markets.--The
enterprise shall lead the industry in developing loan
products and flexible underwriting guidelines to
facilitate a secondary market for mortgages on housing
for very low-, low-, and moderate-income families in
rural areas, and for mortgages for housing for any
other underserved market for very low-, low-, and
moderate-income families that the Secretary identifies
as lacking adequate credit through conventional lending
sources. Such underserved markets may be identified by
borrower type, market segment, or geographic area.'';
and
(5) by adding at the end the following new subsection:
``(c) Evaluation and Reporting of Compliance.--
``(1) In general.--Not later than 6 months after the
effective date under section 365 of the Federal Housing Finance
Reform Act of 2008, the Director shall establish a manner for
evaluating whether, and the extent to which, the enterprises
have complied with the duty under subsection (a) to serve
underserved markets and for rating the extent of such
compliance. Using such method, the Director shall, for each
year, evaluate such compliance and rate the performance of each
enterprise as to extent of compliance. The Director shall
include such evaluation and rating for each enterprise for a
year in the report for that year submitted pursuant to section
1319B(a).
``(2) Separate evaluations.--In determining whether an
enterprise has complied with the duty referred to in paragraph
(1), the Director shall separately evaluate whether the
enterprise has complied with such duty with respect to each of
the underserved markets identified in subsection (a), taking
into consideration--
``(A) the development of loan products and more
flexible underwriting guidelines;
``(B) the extent of outreach to qualified loan
sellers in each of such underserved markets; and
``(C) the volume of loans purchased in each of such
underserved markets.
``(3) Manufactured housing market.--In determining whether
an enterprise has complied with the duty under subparagraph (A)
of subsection (a)(2), the Director may consider loans secured
by both real and personal property.''.
(b) Enforcement.--Subsection (a) of section 1336 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4566(a)) is amended--
(1) in paragraph (1), by inserting ``and with the duty
under section 1335(a) of each enterprise with respect to
underserved markets,'' before ``as provided in this section'';
and
(2) by adding at the end of such subsection, as amended by
the preceding provisions of this subtitle, the following new
paragraph:
``(4) Enforcement of duty to provide mortgage credit to
underserved markets.--The duty under section 1335(a) of each
enterprise to serve underserved markets (as determined in
accordance with section 1335(c)) shall be enforceable under
this section to the same extent and under the same provisions
that the housing goals established under this subpart are
enforceable. Such duty shall not be enforceable under any other
provision of this title (including subpart C of this part)
other than this section or under any provision of the Federal
National Mortgage Association Charter Act or the Federal Home
Loan Mortgage Corporation Act.''.
SEC. 339. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.
(a) Additional Credit for Certain Mortgages.--Section 1336(a) of
the Housing and Community Development Act of 1992 (12 U.S.C. 4566(a))
is amended--
(1) in paragraph (2), by inserting ``, except as provided
in paragraph (4),'' after ``which''; and
(2) by adding at the end the following new paragraph:
``(5) Additional credit.--The Director shall assign more
than 125 percent credit toward achievement, under this section,
of the housing goals for mortgage purchase activities of the
enterprises that comply with the requirements of such goals and
support--
``(A) housing that meets energy efficiency or other
environmental standards that are established by a
Federal, State, or local governmental authority with
respect to the geographic area where the housing is
located or are otherwise widely recognized; or
``(B) housing that includes a licensed childcare
center.
The availability of additional credit under this paragraph
shall not be used to increase any housing goal, subgoal, or
target established under this subpart.''.
(b) Monitoring and Enforcement.--Section 1336 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4566) is amended--
(1) in subsection (b)--
(A) in the subsection heading, by inserting
``Preliminary'' before ``Determination'';
(B) by striking paragraph (1) and inserting the
following new paragraph:
``(1) Notice.--If the Director preliminarily determines
that an enterprise has failed, or that there is a substantial
probability that an enterprise will fail, to meet any housing
goal established under this subpart, the Director shall provide
written notice to the enterprise of such a preliminary
determination, the reasons for such determination, and the
information on which the Director based the determination.'';
(C) in paragraph (2)--
(i) in subparagraph (A), by inserting
``finally'' before ``determining'';
(ii) by striking subparagraphs (B) and (C)
and inserting the following new subparagraph:
``(B) Extension or shortening of period.--The
Director may--
``(i) extend the period under subparagraph
(A) for good cause for not more than 30
additional days; and
``(ii) shorten the period under
subparagraph (A) for good cause.''; and
(iii) by redesignating subparagraph (D) as
subparagraph (C); and
(D) in paragraph (3)--
(i) in subparagraph (A), by striking
``determine'' and inserting ``issue a final
determination of'';
(ii) in subparagraph (B), by inserting
``final'' before ``determinations''; and
(iii) in subparagraph (C)--
(I) by striking ``Committee on
Banking, Finance and Urban Affairs''
and inserting ``Committee on Financial
Services''; and
(II) by inserting ``final'' before
``determination'' each place such term
appears; and
(2) in subsection (c)--
(A) by striking the subsection designation and
heading and all that follows through the end of
paragraph (1) and inserting the following:
``(c) Cease and Desist Orders, Civil Money Penalties, and Remedies
Including Housing Plans.--
``(1) Requirement.--If the Director finds, pursuant to
subsection (b), that there is a substantial probability that an
enterprise will fail, or has actually failed, to meet any
housing goal under this subpart and that the achievement of the
housing goal was or is feasible, the Director may require that
the enterprise submit a housing plan under this subsection. If
the Director makes such a finding and the enterprise refuses to
submit such a plan, submits an unacceptable plan, fails to
comply with the plan or the Director finds that the enterprise
has failed to meet any housing goal under this subpart, in
addition to requiring an enterprise to submit a housing plan,
the Director may issue a cease and desist order in accordance
with section 1341, impose civil money penalties in accordance
with section 1345, or order other remedies as set forth in
paragraph (7) of this subsection.'';
(B) in paragraph (2)--
(i) by striking ``Contents.--Each housing
plan'' and inserting ``Housing plan.--If the
Director requires a housing plan under this
section, such a plan''; and
(ii) in subparagraph (B), by inserting
``and changes in its operations'' after
``improvements'';
(C) in paragraph (3)--
(i) by inserting ``comply with any remedial
action or'' before ``submit a housing plan'';
and
(ii) by striking ``under subsection (b)(3)
that a housing plan is required'';
(D) in paragraph (4), by striking the first two
sentences and inserting the following: ``The Director
shall review each submission by an enterprise,
including a housing plan submitted under this
subsection, and not later than 30 days after
submission, approve or disapprove the plan or other
action. The Director may extend the period for approval
or disapproval for a single additional 30-day period if
the Director determines such extension necessary.'';
and
(E) by adding at the end the following new
paragraph:
``(7) Additional remedies for failure to meet goals.--In
addition to ordering a housing plan under this section, issuing
cease and desist orders under section 1341, and ordering civil
money penalties under section 1345, the Director may seek other
actions when an enterprise fails to meet a goal, and exercise
appropriate enforcement authority available to the Director
under this Act to prohibit the enterprise from initially
offering any product (as such term is defined in section
1321(f)) or engaging in any new activities, services,
undertakings, and offerings and to order the enterprise to
suspend products and activities, services, undertakings, and
offerings pending its achievement of the goal.''.
SEC. 340. AFFORDABLE HOUSING FUND.
(a) In General.--The Housing and Community Development Act of 1992
is amended by striking sections 1337 and 1338 (12 U.S.C. 4562 note) and
inserting the following new section:
``SEC. 1337. AFFORDABLE HOUSING FUND.
``(a) Establishment and Purpose.--The Director, in consultation
with the Secretary of Housing and Urban Development, shall establish
and manage an affordable housing fund in accordance with this section,
which shall be funded with amounts allocated by the enterprises under
subsection (b). The purpose of the affordable housing fund shall be to
provide formula grants to grantees for use--
``(1) to increase homeownership for extremely low-and very
low-income families;
``(2) to increase investment in housing in low-income
areas, and areas designated as qualified census tracts or an
area of chronic economic distress pursuant to section 143(j) of
the Internal Revenue Code of 1986 (26 U.S.C. 143(j));
``(3) to increase and preserve the supply of rental and
owner-occupied housing for extremely low- and very low-income
families;
``(4) to increase investment in public infrastructure
development in connection with housing assisted under this
section; and
``(5) to leverage investments from other sources in
affordable housing and in public infrastructure development in
connection with housing assisted under this section.
``(b) Allocation of Amounts by Enterprises.--
``(1) In general.--In accordance with regulations issued by
the Director under subsection (m) and subject to paragraph (2)
of this subsection and subsection (i)(5), each enterprise shall
allocate to the affordable housing fund established under
subsection (a), in each of the years 2008 through 2012, an
amount equal to 1.2 basis points for each dollar of the average
total mortgage portfolio of the enterprise during the preceding
year.
``(2) Suspension of contributions.--The Director shall
temporarily suspend the allocation under paragraph (1) by an
enterprise to the affordable housing fund upon a finding by the
Director that such allocations--
``(A) are contributing, or would contribute, to the
financial instability of the enterprise;
``(B) are causing, or would cause, the enterprise
to be classified as undercapitalized; or
``(C) are preventing, or would prevent, the
enterprise from successfully completing a capital
restoration plan under section 1369C.
``(3) 5-year sunset and report.--
``(A) Sunset.--The enterprises shall not be
required to make allocations to the affordable housing
fund in 2012 or in any year thereafter.
``(B) Report on program continuance.--Not later
than June 30, 2011, the Director shall submit to the
Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate a report making
recommendations on whether the program under this
section, including the requirement for the enterprises
to make allocations to the affordable housing fund,
should be extended and on any modifications for the
program.
``(4) Prohibition of pass-through of cost of allocations.--
The Director shall, by regulation, prohibit each enterprise
from redirecting such costs, through increased charges or fees,
or decreased premiums, or in any other manner, to the
originators of mortgages purchased or securitized by the
enterprise.
``(c) Affordable Housing Needs Formulas.--
``(1) Allocation for 2008.--
``(A) Allocation percentages for louisiana and
mississippi.--For purposes of subsection (d)(1)(A), the
allocation percentages for 2008 for the grantees under
this section for such year shall be as follows:
``(i) The allocation percentage for the
Louisiana Housing Finance Agency shall be 75
percent.
``(ii) The allocation percentage for the
Mississippi Development Authority shall be 25
percent.
``(B) Use in disaster areas.--Affordable housing
grant amounts for 2008 shall be used only as provided
in subsection (g) only for such eligible activities in
areas that were subject to a declaration by the
President of a major disaster or emergency under the
Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5121 et seq.) in connection
with Hurricane Katrina or Rita of 2005.
``(2) Allocation formula for other years.--The Secretary of
Housing and Urban Development shall, by regulation, establish a
formula to allocate, among the States (as such term is defined
in section 1303) and federally recognized Indian tribes, the
amounts provided by the enterprises in each year referred to
subsection (b)(1), other than 2008, to the affordable housing
fund established under this section. The formula shall be based
on the following factors, with respect to each State and tribe:
``(A) The ratio of the population of the State or
federally recognized Indian tribe to the aggregate
population of all the States and tribes.
``(B) The percentage of families in the State or
federally recognized Indian tribe that pay more than 50
percent of their annual income for housing costs.
``(C) The percentage of persons in the State or
federally recognized Indian tribe that are members of
extremely low- or very low-income families.
``(D) The cost of developing or carrying out
rehabilitation of housing in the State or for the
federally recognized Indian tribe.
``(E) The percentage of families in the State or
federally recognized Indian tribe that live in
substandard housing.
``(F) The percentage of housing stock in the State
or for the federally recognized Indian tribe that is
extremely old housing.
``(G) Any other factors that the Secretary
determines to be appropriate.
``(3) Failure to establish.--If, in any year referred to in
subsection (b)(1), other than 2008, the regulations
establishing the formula required under paragraph (2) of this
subsection have not been issued by the date that the Director
determines the amounts described in subsection (d)(1) to be
available for affordable housing fund grants in such year, for
purposes of such year any amounts for a State (as such term is
defined in section 1303 of this Act) that would otherwise be
determined under subsection (d) by applying the formula
established pursuant to paragraph (2) of this subsection shall
be determined instead by applying, for such State, the
percentage that is equal to the percentage of the total amounts
made available for such year for allocation under subtitle A of
title II of the Cranston-Gonzalez National Affordable Housing
Act (42 U.S.C. 12741 et seq.) that are allocated in such year,
pursuant to such subtitle, to such State (including any insular
area or unit of general local government, as such terms are
defined in section 104 of such Act (42 U.S.C. 12704), that is
treated as a State under section 1303 of this Act) and to
participating jurisdictions and other eligible entities within
such State.
``(d) Allocation of Formula Amount; Grants.--
``(1) Formula amount.--For each year referred to in
subsection (b)(1), the Director shall determine the formula
amount under this section for each grantee, which shall be the
amount determined for such grantee--
``(A) for 2008, by applying the allocation
percentages under subparagraph (A) of subsection (c)(1)
to the sum of the total amounts allocated by the
enterprises to the affordable housing fund for such
year, less any amounts used pursuant to subsection
(i)(1); and
``(B) for any other year referred to in subsection
(b)(1) (other than 2008), by applying the formula
established pursuant to paragraph (2) of subsection (c)
to the sum of the total amounts allocated by the
enterprises to the affordable housing fund for such
year and any recaptured amounts available pursuant to
subsection (i)(4), less any amounts used pursuant to
subsection (i)(1).
``(2) Notice.--In each year referred to in subsection
(b)(1), not later than 60 days after the date that the Director
determines the amounts described in paragraph (1) to be
available for affordable housing fund grants to grantees in
such year, the Director shall cause to be published in the
Federal Register a notice that such amounts shall be so
available.
``(3) Grant amount.--
``(A) In general.--For each year referred to in
subsection (b)(1), the Director shall make a grant from
amounts in the affordable housing fund to each grantee
in an amount that is, except as provided in
subparagraph (B), equal to the formula amount under
this section for the grantee. A grantee may designate a
State housing finance agency, housing and community
development entity, tribally designated housing entity
(as such term is defined in section 4 of the Native
American Housing Assistance and Self-Determination Act
of 1997 (25 U.S.C. 4103)) or other qualified
instrumentality of the grantee to receive such grant
amounts.
``(B) Reduction for failure to obtain return of
misused funds.--If in any year a grantee fails to
obtain reimbursement or return of the full amount
required under subsection (j)(1)(B) to be reimbursed or
returned to the grantee during such year--
``(i) except as provided in clause (ii)--
``(I) the amount of the grant for
the grantee for the succeeding year, as
determined pursuant to subparagraph
(A), shall be reduced by the amount by
which such amounts required to be
reimbursed or returned exceed the
amount actually reimbursed or returned;
and
``(II) the amount of the grant for
the succeeding year for each other
grantee whose grant is not reduced
pursuant to subclause (I) shall be
increased by the amount determined by
applying the formula established
pursuant to subsection (c)(2) to the
total amount of all reductions for all
grantees for such year pursuant to
subclause (I); or
``(ii) in any case in which such failure to
obtain reimbursement or return occurs during a
year immediately preceding a year in which
grants under this subsection will not be made,
the grantee shall pay to the Director for
reallocation among the other grantees an amount
equal to the amount of the reduction for the
grantee that would otherwise apply under clause
(i)(I).
``(e) Grantee Allocation Plans.--
``(1) In general.--For each year that a grantee receives
affordable housing fund grant amounts, the grantee shall
establish an allocation plan in accordance with this
subsection, which shall be a plan for the distribution of such
grant amounts of the grantee for such year that--
``(A) is based on priority housing needs, as
determined by the grantee in accordance with the
regulations established under subsection (m)(2)(C);
``(B) complies with subsection (f); and
``(C) includes performance goals, benchmarks, and
timetables for the grantee for the production,
preservation, and rehabilitation of affordable rental
and homeownership housing with such grant amounts that
comply with the requirements established by the
Director pursuant to subsection (m)(2)(F).
``(2) Establishment.--In establishing an allocation plan, a
grantee shall notify the public of the establishment of the
plan, provide an opportunity for public comments regarding the
plan, consider any public comments received, and make the
completed plan available to the public.
``(3) Contents.--An allocation plan of a grantee shall set
forth the requirements for eligible recipients under subsection
(h) to apply to the grantee to receive assistance from
affordable housing fund grant amounts, including a requirement
that each such application include--
``(A) a description of the eligible activities to
be conducted using such assistance; and
``(B) a certification by the eligible recipient
applying for such assistance that any housing units
assisted with such assistance will comply with the
requirements under this section.
``(f) Selection of Activities Funded Using Affordable Housing Fund
Grant Amounts.--Affordable housing fund grant amounts of a grantee may
be used, or committed for use, only for activities that--
``(1) are eligible under subsection (g) for such use;
``(2) comply with the applicable allocation plan under
subsection (e) of the grantee; and
``(3) are selected for funding by the grantee in accordance
with the process and criteria for such selection established
pursuant to subsection (m)(2)(C).
``(g) Eligible Activities.--Affordable housing fund grant amounts
of a grantee shall be eligible for use, or for commitment for use, only
for assistance for--
``(1) the production, preservation, and rehabilitation of
rental housing, including housing under the programs identified
in section 1335(a)(2)(B), except that such grant amounts may be
used for the benefit only of extremely low- and very low-income
families;
``(2) the production, preservation, and rehabilitation of
housing for homeownership, including such forms as downpayment
assistance, closing cost assistance, and assistance for
interest-rate buy-downs, that--
``(A) is available for purchase only for use as a
principal residence by families that qualify both as--
``(i) extremely low- and very-low income
families at the times described in
subparagraphs (A) through (C) of section
215(b)(2) of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12745(b)(2));
and
``(ii) first-time homebuyers, as such term
is defined in section 104 of the Cranston-
Gonzalez National Affordable Housing Act (42
U.S.C. 12704), except that any reference in
such section to assistance under title II of
such Act shall for purposes of this section be
considered to refer to assistance from
affordable housing fund grant amounts;
``(B) has an initial purchase price that meets the
requirements of section 215(b)(1) of the Cranston-
Gonzalez National Affordable Housing Act;
``(C) is subject to the same resale restrictions
established under section 215(b)(3) of the Cranston-
Gonzalez National Affordable Housing Act and applicable
to the participating jurisdiction that is the State in
which such housing is located; and
``(D) is made available for purchase only by, or in
the case of assistance under this paragraph, is made
available only to, homebuyers who have, before
purchase--
``(i) completed a program of counseling
with respect to the responsibilities and
financial management involved in homeownership
that is approved by the Director; except that
the Director may, at the request of a State,
waive the requirements of this subparagraph
with respect to a geographic area or areas
within the State if: (I) the travel time or
distance involved in providing counseling with
respect to such area or areas, as otherwise
required under this subparagraph, on an in-
person basis is excessive or the cost of such
travel is prohibitive; and (II) the State
provides alternative forms of counseling for
such area or areas, which may include
interactive telephone counseling, on-line
counseling, interactive video counseling, and
interactive home study counseling and a program
of financial literacy and education to promote
an understanding of consumer, economic, and
personal finance issues and concepts, including
saving for retirement, managing credit, long-
term care, and estate planning and education on
predatory lending, identity theft, and
financial abuse schemes relating to
homeownership that is approved by the Director,
except that entities providing such counseling
shall not discriminate against any particular
form of housing; and
``(ii) demonstrated, in accordance with
regulations as the Director shall issue setting
forth requirements for sufficient evidence,
that they are lawfully present in the United
States; and
``(3) public infrastructure development activities in
connection with housing activities funded under paragraph (1)
or (2).
``(h) Eligible Recipients.--Affordable housing fund grant amounts
of a grantee may be provided only to a recipient that is an
organization, agency, or other entity (including a for-profit entity, a
nonprofit entity, and a faith-based organization) that--
``(1) has demonstrated experience and capacity to conduct
an eligible activity under (g), as evidenced by its ability
to--
``(A) own, construct or rehabilitate, manage, and
operate an affordable multifamily rental housing
development;
``(B) design, construct or rehabilitate, and market
affordable housing for homeownership;
``(C) provide forms of assistance, such as
downpayments, closing costs, or interest-rate buy-
downs, for purchasers; or
``(D) construct related public infrastructure
development activities in connection with such housing
activities;
``(2) demonstrates the ability and financial capacity to
undertake, comply, and manage the eligible activity;
``(3) demonstrates its familiarly with the requirements of
any other Federal, State or local housing program that will be
used in conjunction with such grant amounts to ensure
compliance with all applicable requirements and regulations of
such programs; and
``(4) makes such assurances to the grantee as the Director
shall, by regulation, require to ensure that the recipient will
comply with the requirements of this section during the entire
period that begins upon selection of the recipient to receive
such grant amounts and ending upon the conclusion of all
activities under subsection (g) that are engaged in by the
recipient and funded with such grant amounts.
``(i) Limitations on Use.--
``(1) Required amount for refcorp.--Of the aggregate amount
allocated pursuant to subsection (b) in each year to the
affordable housing fund, 25 percent shall be used as provided
in section 21B(f)(2)(E) of the Federal Home Loan Bank Act (12
U.S.C. 1441b(f)(2)(E)).
``(2) Required amount for homeownership activities.--Of the
aggregate amount of affordable housing fund grant amounts
provided in each year to a grantee, not less than 10 percent
shall be used for activities under paragraph (2) of subsection
(g).
``(3) Maximum amount for public infrastructure development
activities in connection with affordable housing activities.--
Of the aggregate amount of affordable housing fund grant
amounts provided in each year to a grantee, not more than 12.5
percent may be used for activities under paragraph (3) of
subsection (g).
``(4) Deadline for commitment or use.--Any affordable
housing fund grant amounts of a grantee shall be used or
committed for use within two years of the date of that such
grant amounts are made available to the grantee. The Director
shall recapture into the affordable housing fund any such
amounts not so used or committed for use and allocate such
amounts under subsection (d)(1) in the first year after such
recapture.
``(5) Use of returns.--The Director shall, by regulation
provide that any return on a loan or other investment of any
affordable housing fund grant amounts of a grantee shall be
treated, for purposes of availability to and use by the
grantee, as affordable housing fund grant amounts.
``(6) Prohibited uses.--The Director shall--
``(A) by regulation, set forth prohibited uses of
affordable housing fund grant amounts, which shall
include use for--
``(i) political activities;
``(ii) advocacy;
``(iii) lobbying, whether directly or
through other parties;
``(iv) counseling services;
``(v) travel expenses; and
``(vi) preparing or providing advice on tax
returns;
``(B) by regulation, provide that, except as
provided in subparagraph (C), affordable housing fund
grant amounts of a grantee may not be used for
administrative, outreach, or other costs of--
``(i) the grantee; or
``(ii) any recipient of such grant amounts;
and
``(C) by regulation, limit the amount of any
affordable housing fund grant amounts of the grantee
for a year that may be used for administrative costs of
the grantee of carrying out the program required under
this section to a percentage of such grant amounts of
the grantee for such year, which may not exceed 10
percent.
``(7) Prohibition of consideration of use for meeting
housing goals or duty to serve.--In determining compliance with
the housing goals under this subpart and the duty to serve
underserved markets under section 1335, the Director may not
consider any affordable housing fund grant amounts used under
this section for eligible activities under subsection (g). The
Director shall give credit toward the achievement of such
housing goals and such duty to serve underserved markets to
purchases by the enterprises of mortgages for housing that
receives funding from affordable housing fund grant amounts,
but only to the extent that such purchases by the enterprises
are funded other than with such grant amounts.
``(8) Acceptable identification requirement for occupancy
or assistance.--
``(A) In general.--Any assistance provided with any
affordable housing grant amounts may not be made
available to, or on behalf of, any individual or
household unless the individual provides, or, in the
case of a household, all adult members of the household
provide, personal identification in one of the
following forms:
``(i) Social security card with photo
identification card or real id act
identification.--
``(I) A social security card
accompanied by a photo identification
card issued by the Federal Government
or a State Government; or
``(II) A driver's license or
identification card issued by a State
in the case of a State that is in
compliance with title II of the REAL ID
Act of 2005 (title II of division B of
Public Law 109-13; 49 U.S.C. 30301
note).
``(ii) Passport.--A passport issued by the
United States or a foreign government.
``(iii) USCIS photo identification card.--A
photo identification card issued by the
Secretary of Homeland Security (acting through
the Director of the United States Citizenship
and Immigration Services).
``(B) Regulations.--The Director shall, by
regulation, require that each grantee and recipient
take such actions as the Director considers necessary
to ensure compliance with the requirements of
subparagraph (A).
``(j) Accountability of Recipients and Grantees.--
``(1) Recipients.--
``(A) Tracking of funds.--The Director shall--
``(i) require each grantee to develop and
maintain a system to ensure that each recipient
of assistance from affordable housing fund
grant amounts of the grantee uses such amounts
in accordance with this section, the
regulations issued under this section, and any
requirements or conditions under which such
amounts were provided; and
``(ii) establish minimum requirements for
agreements, between the grantee and recipients,
regarding assistance from the affordable
housing fund grant amounts of the grantee,
which shall include--
``(I) appropriate continuing
financial and project reporting, record
retention, and audit requirements for
the duration of the grant to the
recipient to ensure compliance with the
limitations and requirements of this
section and the regulations under this
section; and
``(II) any other requirements that
the Director determines are necessary
to ensure appropriate grant
administration and compliance.
``(B) Misuse of funds.--
``(i) Reimbursement requirement.--If any
recipient of assistance from affordable housing
fund grant amounts of a grantee is determined,
in accordance with clause (ii), to have used
any such amounts in a manner that is materially
in violation of this section, the regulations
issued under this section, or any requirements
or conditions under which such amounts were
provided, the grantee shall require that,
within 12 months after the determination of
such misuse, the recipient shall reimburse the
grantee for such misused amounts and return to
the grantee any amounts from the affordable
housing fund grant amounts of the grantee that
remain unused or uncommitted for use. The
remedies under this clause are in addition to
any other remedies that may be available under
law.
``(ii) Determination.--A determination is
made in accordance with this clause if the
determination is--
``(I) made by the Director; or
``(II)(aa) made by the grantee;
``(bb) the grantee provides
notification of the determination to
the Director for review, in the
discretion of the Director, of the
determination; and
``(cc) the Director does not
subsequently reverse the determination.
``(2) Grantees.--
``(A) Report.--
``(i) In general.--The Director shall
require each grantee receiving affordable
housing fund grant amounts for a year to submit
a report, for such year, to the Director that--
``(I) describes the activities
funded under this section during such
year with the affordable housing fund
grant amounts of the grantee; and
``(II) the manner in which the
grantee complied during such year with
the allocation plan established
pursuant to subsection (e) for the
grantee.
``(ii) Public availability.--The Director
shall make such reports pursuant to this
subparagraph publicly available.
``(B) Misuse of funds.--If the Director determines,
after reasonable notice and opportunity for hearing,
that a grantee has failed to comply substantially with
any provision of this section and until the Director is
satisfied that there is no longer any such failure to
comply, the Director shall--
``(i) reduce the amount of assistance under
this section to the grantee by an amount equal
to the amount affordable housing fund grant
amounts which were not used in accordance with
this section;
``(ii) require the grantee to repay the
Director an amount equal to the amount of the
amount affordable housing fund grant amounts
which were not used in accordance with this
section;
``(iii) limit the availability of
assistance under this section to the grantee to
activities or recipients not affected by such
failure to comply; or
``(iv) terminate any assistance under this
section to the grantee.
``(k) Capital Requirements.--The utilization or commitment of
amounts from the affordable housing fund shall not be subject to the
risk-based capital requirements established pursuant to section
1361(a).
``(l) Definitions.--For purposes of this section, the following
definitions shall apply:
``(1) Affordable housing fund grant amounts.--The term
`affordable housing fund grant amounts' means amounts from the
affordable housing fund established under subsection (a) that
are provided to a grantee pursuant to subsection (d)(3).
``(2) Grantee.--The term `grantee' means--
``(A) with respect to 2008, the Louisiana Housing
Finance Agency and the Mississippi Development
Authority; and
``(B) with respect to the years referred to in
subsection (b)(1), other than 2008, each State (as such
term is defined in section 1303) and each federally
recognized Indian tribe.
``(3) Recipient.--The term `recipient' means an entity
meeting the requirements under subsection (h) that receives
assistance from a grantee from affordable housing fund grant
amounts of the grantee.
``(4) Total mortgage portfolio.--The term `total mortgage
portfolio' means, with respect to a year, the sum, for all
mortgages outstanding during that year in any form, including
whole loans, mortgage-backed securities, participation
certificates, or other structured securities backed by
mortgages, of the dollar amount of the unpaid outstanding
principal balances under such mortgages. Such term includes all
such mortgages or securitized obligations, whether retained in
portfolio, or sold in any form. The Director is authorized to
promulgate rules further defining such term as necessary to
implement this section and to address market developments.
``(5) Very-low income family.--The term `very low-income
family' has the meaning given such term in section 1303, except
that such term includes any family that resides in a rural area
that has an income that does not exceed the poverty line (as
such term is defined in section 673(2) of the Omnibus Budget
Reconciliation Act of 1981 (42 U.S.C. 9902(2)), including any
revision required by such section) applicable to a family of
the size involved.
``(m) Regulations.--
``(1) In general.--The Director, in consultation with the
Secretary of Housing and Urban Development, shall issue
regulations to carry out this section.
``(2) Required contents.--The regulations issued under this
subsection shall include--
``(A) a requirement that the Director ensure that
the program of each grantee for use of affordable
housing fund grant amounts of the grantee is audited
not less than annually to ensure compliance with this
section;
``(B) authority for the Director to audit, provide
for an audit, or otherwise verify a grantee's
activities, to ensure compliance with this section;
``(C) requirements for a process for application
to, and selection by, each grantee for activities
meeting the grantee's priority housing needs to be
funded with affordable housing fund grant amounts of
the grantee, which shall provide for priority in
funding to be based upon--
``(i) greatest impact;
``(ii) geographic diversity;
``(iii) ability to obligate amounts and
undertake activities so funded in a timely
manner;
``(iv) in the case of rental housing
projects under subsection (g)(1), the extent to
which rents for units in the project funded are
affordable, especially for extremely low-income
families;
``(v) in the case of rental housing
projects under subsection (g)(1), the extent of
the duration for which such rents will remain
affordable;
``(vi) the extent to which the application
makes use of other funding sources; and
``(vii) the merits of an applicant's
proposed eligible activity;
``(D) requirements to ensure that amounts provided
to a grantee from the affordable housing fund that are
used for rental housing under subsection (g)(1) are
used only for the benefit of extremely low- and very-
low income families;
``(E) limitations on public infrastructure
development activities that are eligible pursuant to
subsection (g)(3) for funding with affordable housing
fund grant amounts and requirements for the connection
between such activities and housing activities funded
under paragraph (1) or (2) of subsection (g); and
``(F) requirements and standards for establishment,
by grantees (including the grantees for 2008 pursuant
to subsection (l)(2)(A)), of performance goals,
benchmarks, and timetables for the production,
preservation, and rehabilitation of affordable rental
and homeownership housing with affordable housing fund
grant amounts.
``(n) Enforcement of Requirements on Enterprise.--Compliance by the
enterprises with the requirements under this section shall be
enforceable under subpart C. Any reference in such subpart to this part
or to an order, rule, or regulation under this part specifically
includes this section and any order, rule, or regulation under this
section.
``(o) Affordable Housing Trust Fund.--If, after the enactment of
the Federal Housing Finance Reform Act of 2008, in any year, there is
enacted any provision of Federal law establishing an affordable housing
trust fund other than under this title for use only for grants to
provide affordable rental housing and affordable homeownership
opportunities, and the subsequent year is a year referred to in
subsection (b)(1), the Director shall in such subsequent year and any
remaining years referred to in subsection (b)(1) transfer to such
affordable housing trust fund the aggregate amount allocated pursuant
to subsection (b) in such year to the affordable housing fund under
this section, less any amounts used pursuant to subsection (i)(1). For
such subsequent and remaining years, the provisions of subsections (c)
and (d) shall not apply. Notwithstanding any other provision of law,
assistance provided using amounts transferred to such affordable
housing trust fund pursuant to this subsection may not be used for any
of the activities specified in clauses (i) through (vi) of subsection
(i)(6). Nothing in this subsection shall be construed to alter the
terms and conditions of the affordable housing fund under this section
or to extend the life of such fund.
``(p) Funding Accountability and Transparency.--Any grant under
this section to a grantee from the affordable housing fund established
under subsection (a), any assistance provided to a recipient by a
grantee from affordable housing fund grant amounts, and any grant,
award, or other assistance from an affordable housing trust fund
referred to in subsection (o) shall be considered a Federal award for
purposes of the Federal Funding Accountability and Transparency Act of
2006 (31 U.S.C. 6101 note). Upon the request of the Director of the
Office of Management and Budget, the Director of the Federal Housing
Finance Agency shall obtain and provide such information regarding any
such grants, assistance, and awards as the Director of the Office of
Management and Budget considers necessary to comply with the
requirements of such Act, as applicable pursuant to the preceding
sentence.''.
(b) Timely Establishment of Affordable Housing Needs Formula.--
(1) In general.--The Secretary of Housing and Urban
Development shall, not later than the effective date under
section 365 of this title, issue the regulations establishing
the affordable housing needs formulas in accordance with the
provisions of section 1337(c)(2) of the Housing and Community
Development Act of 1992, as such section is amended by
subsection (a) of this section.
(2) Effective date.--This subsection shall take effect on
the date of the enactment of this Act.
(c) REFCORP Payments.--Section 21B(f)(2) of the Federal Home Loan
Bank Act (12 U.S.C. 1441b(f)(2)) is amended--
(1) in subparagraph (E), by striking ``and (D)'' and
inserting ``(D), and (E)'';
(2) by redesignating subparagraph (E) as subparagraph (F);
and
(3) by inserting after subparagraph (D) the following new
subparagraph:
``(E) Payments by fannie mae and freddie mac.--To
the extent that the amounts available pursuant to
subparagraphs (A), (B), (C), and (D) are insufficient
to cover the amount of interest payments, each
enterprise (as such term is defined in section 1303 of
the Housing and Community Development Act of 1992 (42
U.S.C. 4502)) shall transfer to the Funding Corporation
in each calendar year the amounts allocated for use
under this subparagraph pursuant to section 1337(i)(1)
of such Act.''.
(d) GAO Report.--The Comptroller General shall conduct a study to
determine the effects that the affordable housing fund established
under section 1337 of the Housing and Community Development Act of
1992, as added by the amendment made by subsection (a) of this section,
will have on the availability and affordability of credit for
homebuyers, including the effects on such credit of the requirement
under such section 1337(b) that the Federal National Mortgage
Association and Federal Home Loan Mortgage Corporation make allocations
of amounts to such fund based on the average total mortgage portfolios,
and the extent to which the costs of such allocation requirement will
be borne by such entities or will be passed on to homebuyers. Not later
than the expiration of the 12-month period beginning on the date of the
enactment of this Act, the Comptroller General shall submit a report to
the Congress setting forth the results and conclusions of such study.
This subsection shall take effect on the date of the enactment of this
Act.
SEC. 341. CONSISTENCY WITH MISSION.
Subpart B of part 2 of subtitle A of title XIII of the Housing and
Community Development Act of 1992 (12 U.S.C. 4561 et seq.) is amended
by adding after section 1337, as added by the preceding provisions of
this title, the following new section:
``SEC. 1338. CONSISTENCY WITH MISSION.
``This subpart may not be construed to authorize an enterprise to
engage in any program or activity that contravenes or is inconsistent
with the Federal National Mortgage Association Charter Act or the
Federal Home Loan Mortgage Corporation Act.''.
SEC. 342. ENFORCEMENT.
(a) Cease-and-Desist Proceedings.--Section 1341 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4581) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Grounds for Issuance.--The Director may issue and serve a
notice of charges under this section upon an enterprise if the Director
determines--
``(1) the enterprise has failed to meet any housing goal
established under subpart B, following a written notice and
determination of such failure in accordance with section 1336;
``(2) the enterprise has failed to submit a report under
section 1314, following a notice of such failure, an
opportunity for comment by the enterprise, and a final
determination by the Director;
``(3) the enterprise has failed to submit the information
required under subsection (m) or (n) of section 309 of the
Federal National Mortgage Association Charter Act, or
subsection (e) or (f) of section 307 of the Federal Home Loan
Mortgage Corporation Act;
``(4) the enterprise has violated any provision of this
part or any order, rule or regulation under this part;
``(5) the enterprise has failed to submit a housing plan
that complies with section 1336(c) within the applicable
period; or
``(6) the enterprise has failed to comply with a housing
plan under section 1336(c).'';
(2) in subsection (b)(2), by striking ``requiring the
enterprise to'' and all that follows through the end of the
paragraph and inserting the following: ``requiring the
enterprise to--
``(A) comply with the goal or goals;
``(B) submit a report under section 1314;
``(C) comply with any provision this part or any
order, rule or regulation under such part;
``(D) submit a housing plan in compliance with
section 1336(c);
``(E) comply with a housing plan submitted under
section 1336(c); or
``(F) provide the information required under
subsection (m) or (n) of section 309 of the Federal
National Mortgage Association Charter Act or subsection
(e) or (f) of section 307 of the Federal Home Loan
Mortgage Corporation Act, as applicable.'';
(3) in subsection (c), by inserting ``date of the'' before
``service of the order''; and
(4) by striking subsection (d).
(b) Authority of Director To Enforce Notices and Orders.--Section
1344 of the Housing and Community Development Act of 1992 (12 U.S.C.
4584) is amended by striking subsection (a) and inserting the following
new subsection:
``(a) Enforcement.--The Director may, in the discretion of the
Director, apply to the United States District Court for the District of
Columbia, or the United States district court within the jurisdiction
of which the headquarters of the enterprise is located, for the
enforcement of any effective and outstanding notice or order issued
under section 1341 or 1345, or request that the Attorney General of the
United States bring such an action. Such court shall have jurisdiction
and power to order and require compliance with such notice or order.''.
(c) Civil Money Penalties.--Section 1345 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4585) is amended--
(1) by striking subsections (a) and (b) and inserting the
following new subsections:
``(a) Authority.--The Director may impose a civil money penalty, in
accordance with the provisions of this section, on any enterprise that
has failed to--
``(1) meet any housing goal established under subpart B,
following a written notice and determination of such failure in
accordance with section 1336(b);
``(2) submit a report under section 1314, following a
notice of such failure, an opportunity for comment by the
enterprise, and a final determination by the Director;
``(3) submit the information required under subsection (m)
or (n) of section 309 of the Federal National Mortgage
Association Charter Act, or subsection (e) or (f) of section
307 of the Federal Home Loan Mortgage Corporation Act;
``(4) comply with any provision of this part or any order,
rule or regulation under this part;
``(5) submit a housing plan pursuant to section 1336(c)
within the required period; or
``(6) comply with a housing plan for the enterprise under
section 1336(c).
``(b) Amount of Penalty.--The amount of the penalty, as determined
by the Director, may not exceed--
``(1) for any failure described in paragraph (1), (5), or
(6) of subsection (a), $50,000 for each day that the failure
occurs; and
``(2) for any failure described in paragraph (2), (3), or
(4) of subsection (a), $20,000 for each day that the failure
occurs.'';
(2) in subsection (c)--
(A) in paragraph (1)--
(i) in subparagraph (A), by inserting
``and'' after the semicolon at the end;
(ii) in subparagraph (B), by striking ``;
and'' and inserting a period; and
(iii) by striking subparagraph (C); and
(B) in paragraph (2), by inserting after the period
at the end the following: ``In determining the penalty
under subsection (a)(1), the Director shall give
consideration to the length of time the enterprise
should reasonably take to achieve the goal.'';
(3) in the first sentence of subsection (d)--
(A) by striking ``request the Attorney General of
the United States to'' and inserting ``, in the
discretion of the Director,''; and
(B) by inserting ``, or request that the Attorney
General of the United States bring such an action''
before the period at the end;
(4) by striking subsection (f); and
(5) by redesignating subsection (g) as subsection (f).
(d) Enforcement of Subpoenas.--Section 1348(c) of the Housing and
Community Development Act of 1992 (12 U.S.C. 4588(c)) is amended--
(1) by striking ``request the Attorney General of the
United States to'' and inserting ``, in the discretion of the
Director,''; and
(2) by inserting ``or request that the Attorney General of
the United States bring such an action,'' after ``District of
Columbia,''.
(e) Conforming Amendment.--The heading for subpart C of part 2 of
subtitle A of title XIII of the Housing and Community Development Act
of 1992 is amended to read as follows:
``Subpart C--Enforcement''.
SEC. 343. CONFORMING AMENDMENTS.
Part 2 of subtitle A of title XIII of the Housing and Community
Development Act of 1992 (12 U.S.C. 4541 et seq.) is amended--
(1) by striking ``Secretary'' each place such term appears
in such part and inserting ``Director'';
(2) in the section heading for section 1323 (12 U.S.C.
4543), by inserting ``of enterprises'' before the period at the
end;
(3) by striking section 1327 (12 U.S.C. 4547);
(4) by striking section 1328 (12 U.S.C. 4548);
(5) by redesignating section 1329 (as amended by section
335) as section 1327;
(6) in sections 1345(c)(1)(A), 1346(a), and 1346(b) (12
U.S.C. 4585(c)(1)(A), 4586(a), and 4586(b)), by striking
``Secretary's'' each place such term appears and inserting
``Director's''; and
(7) by striking section 1349 (12 U.S.C. 4589).
CHAPTER 3--PROMPT CORRECTIVE ACTION
SEC. 345. CAPITAL CLASSIFICATIONS.
(a) In General.--Section 1364 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4614) is amended--
(1) in the heading for subsection (a), by striking ``In
General'' and inserting ``Enterprises''.
(2) in subsection (c)--
(A) by striking ``subsection (b)'' and inserting
``subsection (c)'';
(B) by striking ``enterprises'' and inserting
``regulated entities''; and
(C) by striking the last sentence;
(3) by redesignating subsections (c) (as so amended by
paragraph (2) of this subsection) and (d) as subsections (d)
and (f), respectively;
(4) by striking subsection (b) and inserting the following
new subsections:
``(b) Federal Home Loan Banks.--
``(1) Establishment and criteria.--For purposes of this
subtitle, the Director shall, by regulation--
``(A) establish the capital classifications
specified under paragraph (2) for the Federal home loan
banks;
``(B) establish criteria for each such capital
classification based on the amount and types of capital
held by a bank and the risk-based, minimum, and
critical capital levels for the banks and taking due
consideration of the capital classifications
established under subsection (a) for the enterprises,
with such modifications as the Director determines to
be appropriate to reflect the difference in operations
between the banks and the enterprises; and
``(C) shall classify the Federal home loan banks
according to such capital classifications.
``(2) Classifications.--The capital classifications
specified under this paragraph are--
``(A) adequately capitalized;
``(B) undercapitalized;
``(C) significantly undercapitalized; and
``(D) critically undercapitalized.
``(c) Discretionary Classification.--
``(1) Grounds for reclassification.--The Director may
reclassify a regulated entity under paragraph (2) if--
``(A) at any time, the Director determines in
writing that the regulated entity is engaging in
conduct that could result in a rapid depletion of core
or total capital or, in the case of an enterprise, that
the value of the property subject to mortgages held or
securitized by the enterprise has decreased
significantly;
``(B) after notice and an opportunity for hearing,
the Director determines that the regulated entity is in
an unsafe or unsound condition; or
``(C) pursuant to section 1371(b), the Director
deems the regulated entity to be engaging in an unsafe
or unsound practice.
``(2) Reclassification.--In addition to any other action
authorized under this title, including the reclassification of
a regulated entity for any reason not specified in this
subsection, if the Director takes any action described in
paragraph (1) the Director may classify a regulated entity--
``(A) as undercapitalized, if the regulated entity
is otherwise classified as adequately capitalized;
``(B) as significantly undercapitalized, if the
regulated entity is otherwise classified as
undercapitalized; and
``(C) as critically undercapitalized, if the
regulated entity is otherwise classified as
significantly undercapitalized.''; and
(5) by inserting after subsection (d) (as so redesignated
by paragraph (3) of this subsection), the following new
subsection:
``(e) Restriction on Capital Distributions.--
``(1) In general.--A regulated entity shall make no capital
distribution if, after making the distribution, the regulated
entity would be undercapitalized.
``(2) Exception.--Notwithstanding paragraph (1), the
Director may permit a regulated entity, to the extent
appropriate or applicable, to repurchase, redeem, retire, or
otherwise acquire shares or ownership interests if the
repurchase, redemption, retirement, or other acquisition--
``(A) is made in connection with the issuance of
additional shares or obligations of the regulated
entity in at least an equivalent amount; and
``(B) will reduce the financial obligations of the
regulated entity or otherwise improve the financial
condition of the entity.''.
(b) Regulations.--Not later than the expiration of the 180-day
period beginning on the effective date under section 365, the Director
of the Federal Housing Finance Agency shall issue regulations to carry
out section 1364(b) of the Housing and Community Development Act of
1992 (as added by paragraph (4) of this subsection), relating to
capital classifications for the Federal home loan banks.
SEC. 346. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED REGULATED
ENTITIES.
Section 1365 of the Housing and Community Development Act of 1992
(12 U.S.C. 4615) is amended--
(1) in the section heading, by striking ``enterprises'' and
inserting ``regulated entities'';
(2) in subsection (a)--
(A) by redesignating paragraphs (1) and (2) as
paragraphs (2) and (3), respectively;
(B) by inserting before paragraph (2), as so
redesignated by subparagraph (A) of this paragraph, the
following paragraph:
``(1) Required monitoring.--The Director shall--
``(A) closely monitor the condition of any
regulated entity that is classified as
undercapitalized;
``(B) closely monitor compliance with the capital
restoration plan, restrictions, and requirements
imposed under this section; and
``(C) periodically review the plan, restrictions,
and requirements applicable to the undercapitalized
regulated entity to determine whether the plan,
restrictions, and requirements are achieving the
purpose of this section.''; and
(C) by inserting at the end the following new
paragraphs:
``(4) Restriction of asset growth.--A regulated entity that
is classified as undercapitalized shall not permit its average
total assets (as such term is defined in section 1316(b) during
any calendar quarter to exceed its average total assets during
the preceding calendar quarter unless--
``(A) the Director has accepted the capital
restoration plan of the regulated entity;
``(B) any increase in total assets is consistent
with the plan; and
``(C) the ratio of total capital to assets for the
regulated entity increases during the calendar quarter
at a rate sufficient to enable the entity to become
adequately capitalized within a reasonable time.
``(5) Prior approval of acquisitions, new products, and new
activities.--A regulated entity that is classified as
undercapitalized shall not, directly or indirectly, acquire any
interest in any entity or initially offer any new product (as
such term is defined in section 1321(f)) or engage in any new
activity, service, undertaking, or offering unless--
``(A) the Director has accepted the capital
restoration plan of the regulated entity, the entity is
implementing the plan, and the Director determines that
the proposed action is consistent with and will further
the achievement of the plan; or
``(B) the Director determines that the proposed
action will further the purpose of this section.'';
(3) in the subsection heading for subsection (b), by
striking ``From Undercapitalized to Significantly
Undercapitalized''; and
(4) by striking subsection (c) and inserting the following
new subsection:
``(c) Other Discretionary Safeguards.--The Director may take, with
respect to a regulated entity that is classified as undercapitalized,
any of the actions authorized to be taken under section 1366 with
respect to a regulated entity that is classified as significantly
undercapitalized, if the Director determines that such actions are
necessary to carry out the purpose of this subtitle.''.
SEC. 347. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY
UNDERCAPITALIZED REGULATED ENTITIES.
Section 1366 of the Housing and Community Development Act of 1992
(12 U.S.C. 4616) is amended--
(1) in the section heading, by striking ``enterprises'' and
inserting ``regulated entities'';
(2) in subsection (a)(2)(A), by striking ``enterprise'' the
last place such term appears;
(3) in subsection (b)--
(A) in the subsection heading, by striking
``Discretionary Supervisory Actions'' and inserting
``Specific Actions''.
(B) in the matter preceding paragraph (1), by
striking ``may, at any time, take any'' and inserting
``shall carry out this section by taking, at any time,
one or more'';
(C) by redesignating paragraphs (5) and (6) as
paragraphs (6) and (7), respectively;
(D) by inserting after paragraph (4) the following
new paragraph:
``(5) Improvement of management.--Take one or more of the
following actions:
``(A) New election of board.--Order a new election
for the board of directors of the regulated entity.
``(B) Dismissal of directors or executive
officers.--Require the regulated entity to dismiss from
office any director or executive officer who had held
office for more than 180 days immediately before the
entity became undercapitalized. Dismissal under this
subparagraph shall not be construed to be a removal
pursuant to the Director's enforcement powers provided
in section 1377.
``(C) Employ qualified executive officers.--Require
the regulated entity to employ qualified executive
officers (who, if the Director so specifies, shall be
subject to approval by the Director).''; and
(E) by inserting at the end the following new
paragraph:
``(8) Other action.--Require the regulated entity to take
any other action that the Director determines will better carry
out the purpose of this section than any of the actions
specified in this paragraph.'';
(4) by redesignating subsection (c) as subsection (d); and
(5) by inserting after subsection (b) the following new
subsection:
``(c) Restriction on Compensation of Executive Officers.--A
regulated entity that is classified as significantly undercapitalized
may not, without prior written approval by the Director--
``(1) pay any bonus to any executive officer; or
``(2) provide compensation to any executive officer at a
rate exceeding that officer's average rate of compensation
(excluding bonuses, stock options, and profit sharing) during
the 12 calendar months preceding the calendar month in which
the regulated entity became undercapitalized.''.
SEC. 348. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED
ENTITIES.
(a) In General.--Section 1367 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4617) is amended to read as follows:
``SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED
ENTITIES.
``(a) Appointment of Agency as Conservator or Receiver.--
``(1) In general.--Notwithstanding any other provision of
Federal or State law, if any of the grounds under paragraph (3)
exist, at the discretion of the Director, the Director may
establish a conservatorship or receivership, as appropriate,
for the purpose of reorganizing, rehabilitating, or winding up
the affairs of a regulated entity.
``(2) Appointment.--In any conservatorship or receivership
established under this section, the Director shall appoint the
Agency as conservator or receiver.
``(3) Grounds for appointment.--The grounds for appointing
a conservator or receiver for a regulated entity are as
follows:
``(A) Assets insufficient for obligations.--The
assets of the regulated entity are less than the
obligations of the regulated entity to its creditors
and others.
``(B) Substantial dissipation.--Substantial
dissipation of assets or earnings due to--
``(i) any violation of any provision of
Federal or State law; or
``(ii) any unsafe or unsound practice.
``(C) Unsafe or unsound condition.--An unsafe or
unsound condition to transact business.
``(D) Cease-and-desist orders.--Any willful
violation of a cease-and-desist order that has become
final.
``(E) Concealment.--Any concealment of the books,
papers, records, or assets of the regulated entity, or
any refusal to submit the books, papers, records, or
affairs of the regulated entity, for inspection to any
examiner or to any lawful agent of the Director.
``(F) Inability to meet obligations.--The regulated
entity is likely to be unable to pay its obligations or
meet the demands of its creditors in the normal course
of business.
``(G) Losses.--The regulated entity has incurred or
is likely to incur losses that will deplete all or
substantially all of its capital, and there is no
reasonable prospect for the regulated entity to become
adequately capitalized (as defined in section
1364(a)(1)).
``(H) Violations of law.--Any violation of any law
or regulation, or any unsafe or unsound practice or
condition that is likely to--
``(i) cause insolvency or substantial
dissipation of assets or earnings; or
``(ii) weaken the condition of the
regulated entity.
``(I) Consent.--The regulated entity, by resolution
of its board of directors or its shareholders or
members, consents to the appointment.
``(J) Undercapitalization.--The regulated entity is
undercapitalized or significantly undercapitalized (as
defined in section 1364(a)(3) or in regulations issued
pursuant to section 1364(b), as applicable), and--
``(i) has no reasonable prospect of
becoming adequately capitalized;
``(ii) fails to become adequately
capitalized, as required by--
``(I) section 1365(a)(1) with
respect to an undercapitalized
regulated entity; or
``(II) section 1366(a)(1) with
respect to a significantly
undercapitalized regulated entity;
``(iii) fails to submit a capital
restoration plan acceptable to the Agency
within the time prescribed under section 1369C;
or
``(iv) materially fails to implement a
capital restoration plan submitted and accepted
under section 1369C.
``(K) Critical undercapitalization.--The regulated
entity is critically undercapitalized, as defined in
section 1364(a)(4) or in regulations issued pursuant to
section 1364(b), as applicable.
``(L) Money laundering.--The Attorney General
notifies the Director in writing that the regulated
entity has been found guilty of a criminal offense
under section 1956 or 1957 of title 18, United States
Code, or section 5322 or 5324 of title 31, United
States Code.
``(4) Mandatory receivership.--
``(A) In general.--The Director shall appoint the
Agency as receiver for a regulated entity if the
Director determines, in writing, that--
``(i) the assets of the regulated entity
are, and during the preceding 30 calendar days
have been, less than the obligations of the
regulated entity to its creditors and others;
or
``(ii) the regulated entity is not, and
during the preceding 30 calendar days has not
been, generally paying the debts of the
regulated entity (other than debts that are the
subject of a bona fide dispute) as such debts
become due.
``(B) Periodic determination required for
critically under capitalized regulated entity.--If a
regulated entity is critically undercapitalized, the
Director shall make a determination, in writing, as to
whether the regulated entity meets the criteria
specified in clause (i) or (ii) of subparagraph (A)--
``(i) not later than 30 calendar days after
the regulated entity initially becomes
critically undercapitalized; and
``(ii) at least once during each succeeding
30-calendar day period.
``(C) Determination not required if receivership
already in place.--Subparagraph (B) shall not apply
with respect to a regulated entity in any period during
which the Agency serves as receiver for the regulated
entity.
``(D) Receivership terminates conservatorship.--The
appointment under this section of the Agency as
receiver of a regulated entity shall immediately
terminate any conservatorship established under this
title for the regulated entity.
``(5) Judicial review.--
``(A) In general.--If the Agency is appointed
conservator or receiver under this section, the
regulated entity may, within 30 days of such
appointment, bring an action in the United States
District Court for the judicial district in which the
principal place of business of such regulated entity is
located, or in the United States District Court for the
District of Columbia, for an order requiring the Agency
to remove itself as conservator or receiver.
``(B) Review.--Upon the filing of an action under
subparagraph (A), the court shall, upon the merits,
dismiss such action or direct the Agency to remove
itself as such conservator or receiver.
``(6) Directors not liable for acquiescing in appointment
of conservator or receiver.--The members of the board of
directors of a regulated entity shall not be liable to the
shareholders or creditors of the regulated entity for
acquiescing in or consenting in good faith to the appointment
of the Agency as conservator or receiver for that regulated
entity.
``(7) Agency not subject to any other federal agency.--When
acting as conservator or receiver, the Agency shall not be
subject to the direction or supervision of any other agency of
the United States or any State in the exercise of the rights,
powers, and privileges of the Agency.
``(b) Powers and Duties of the Agency as Conservator or Receiver.--
``(1) Rulemaking authority of the agency.--The Agency may
prescribe such regulations as the Agency determines to be
appropriate regarding the conduct of conservatorships or
receiverships.
``(2) General powers.--
``(A) Successor to regulated entity.--The Agency
shall, as conservator or receiver, and by operation of
law, immediately succeed to--
``(i) all rights, titles, powers, and
privileges of the regulated entity, and of any
stockholder, officer, or director of such
regulated entity with respect to the regulated
entity and the assets of the regulated entity;
and
``(ii) title to the books, records, and
assets of any other legal custodian of such
regulated entity.
``(B) Operate the regulated entity.--The Agency
may, as conservator or receiver--
``(i) take over the assets of and operate
the regulated entity with all the powers of the
shareholders, the directors, and the officers
of the regulated entity and conduct all
business of the regulated entity;
``(ii) collect all obligations and money
due the regulated entity;
``(iii) perform all functions of the
regulated entity in the name of the regulated
entity which are consistent with the
appointment as conservator or receiver; and
``(iv) preserve and conserve the assets and
property of such regulated entity.
``(C) Functions of officers, directors, and
shareholders of a regulated entity.--The Agency may, by
regulation or order, provide for the exercise of any
function by any stockholder, director, or officer of
any regulated entity for which the Agency has been
named conservator or receiver.
``(D) Powers as conservator.--The Agency may, as
conservator, take such action as may be--
``(i) necessary to put the regulated entity
in a sound and solvent condition; and
``(ii) appropriate to carry on the business
of the regulated entity and preserve and
conserve the assets and property of the
regulated entity, including, if two or more
Federal home loan banks have been placed in
conservatorship contemporaneously, merging two
or more such banks into a single Federal home
loan bank.
``(E) Additional powers as receiver.--The Agency
may, as receiver, place the regulated entity in
liquidation and proceed to realize upon the assets of
the regulated entity, having due regard to the
conditions of the housing finance market.
``(F) Organization of new regulated entities.--The
Agency may, as receiver, organize a successor regulated
entity that will operate pursuant to subsection (i).
``(G) Transfer of assets and liabilities.--The
Agency may, as conservator or receiver, transfer any
asset or liability of the regulated entity in default
without any approval, assignment, or consent with
respect to such transfer. Any Federal home loan bank
may, with the approval of the Agency, acquire the
assets of any Bank in conservatorship or receivership,
and assume the liabilities of such Bank.
``(H) Payment of valid obligations.--The Agency, as
conservator or receiver, shall, to the extent of
proceeds realized from the performance of contracts or
sale of the assets of a regulated entity, pay all valid
obligations of the regulated entity in accordance with
the prescriptions and limitations of this section.
``(I) Subpoena authority.--
``(i) In general.--
``(I) In general.--The Agency may,
as conservator or receiver, and for
purposes of carrying out any power,
authority, or duty with respect to a
regulated entity (including determining
any claim against the regulated entity
and determining and realizing upon any
asset of any person in the course of
collecting money due the regulated
entity), exercise any power established
under section 1348.
``(II) Applicability of law.--The
provisions of section 1348 shall apply
with respect to the exercise of any
power exercised under this subparagraph
in the same manner as such provisions
apply under that section.
``(ii) Authority of director.--A subpoena
or subpoena duces tecum may be issued under
clause (i) only by, or with the written
approval of, the Director, or the designee of
the Director.
``(iii) Rule of construction.--This
subsection shall not be construed to limit any
rights that the Agency, in any capacity, might
otherwise have under section 1317 or 1379D.
``(J) Contracting for services.--The Agency may, as
conservator or receiver, provide by contract for the
carrying out of any of its functions, activities,
actions, or duties as conservator or receiver.
``(K) Incidental powers.--The Agency may, as
conservator or receiver--
``(i) exercise all powers and authorities
specifically granted to conservators or
receivers, respectively, under this section,
and such incidental powers as shall be
necessary to carry out such powers; and
``(ii) take any action authorized by this
section, which the Agency determines is in the
best interests of the regulated entity or the
Agency.
``(3) Authority of receiver to determine claims.--
``(A) In general.--The Agency may, as receiver,
determine claims in accordance with the requirements of
this subsection and any regulations prescribed under
paragraph (4).
``(B) Notice requirements.--The receiver, in any
case involving the liquidation or winding up of the
affairs of a closed regulated entity, shall--
``(i) promptly publish a notice to the
creditors of the regulated entity to present
their claims, together with proof, to the
receiver by a date specified in the notice
which shall be not less than 90 days after the
publication of such notice; and
``(ii) republish such notice approximately
1 month and 2 months, respectively, after the
publication under clause (i).
``(C) Mailing required.--The receiver shall mail a
notice similar to the notice published under
subparagraph (B)(i) at the time of such publication to
any creditor shown on the books of the regulated
entity--
``(i) at the last address of the creditor
appearing in such books; or
``(ii) upon discovery of the name and
address of a claimant not appearing on the
books of the regulated entity within 30 days
after the discovery of such name and address.
``(4) Rulemaking authority relating to determination of
claims.--Subject to subsection (c), the Director may prescribe
regulations regarding the allowance or disallowance of claims
by the receiver and providing for administrative determination
of claims and review of such determination.
``(5) Procedures for determination of claims.--
``(A) Determination period.--
``(i) In general.--Before the end of the
180-day period beginning on the date on which
any claim against a regulated entity is filed
with the Agency as receiver, the Agency shall
determine whether to allow or disallow the
claim and shall notify the claimant of any
determination with respect to such claim.
``(ii) Extension of time.--The period
described in clause (i) may be extended by a
written agreement between the claimant and the
Agency.
``(iii) Mailing of notice sufficient.--The
notification requirements of clause (i) shall
be deemed to be satisfied if the notice of any
determination with respect to any claim is
mailed to the last address of the claimant
which appears--
``(I) on the books of the regulated
entity;
``(II) in the claim filed by the
claimant; or
``(III) in documents submitted in
proof of the claim.
``(iv) Contents of notice of
disallowance.--If any claim filed under clause
(i) is disallowed, the notice to the claimant
shall contain--
``(I) a statement of each reason
for the disallowance; and
``(II) the procedures available for
obtaining agency review of the
determination to disallow the claim or
judicial determination of the claim.
``(B) Allowance of proven claim.--The receiver
shall allow any claim received on or before the date
specified in the notice published under paragraph
(3)(B)(i), or the date specified in the notice required
under paragraph (3)(C), which is proved to the
satisfaction of the receiver.
``(C) Disallowance of claims filed after end of
filing period.--Claims filed after the date specified
in the notice published under paragraph (3)(B)(i), or
the date specified under paragraph (3)(C), shall be
disallowed and such disallowance shall be final.
``(D) Authority to disallow claims.--
``(i) In general.--The receiver may
disallow any portion of any claim by a creditor
or claim of security, preference, or priority
which is not proved to the satisfaction of the
receiver.
``(ii) Payments to less than fully secured
creditors.--In the case of a claim of a
creditor against a regulated entity which is
secured by any property or other asset of such
regulated entity, the receiver--
``(I) may treat the portion of such
claim which exceeds an amount equal to
the fair market value of such property
or other asset as an unsecured claim
against the regulated entity; and
``(II) may not make any payment
with respect to such unsecured portion
of the claim other than in connection
with the disposition of all claims of
unsecured creditors of the regulated
entity.
``(iii) Exceptions.--No provision of this
paragraph shall apply with respect to any
extension of credit from any Federal Reserve
Bank, Federal home loan bank, or the Treasury
of the United States.
``(E) No judicial review of determination pursuant
to subparagraph (d).--No court may review the
determination of the Agency under subparagraph (D) to
disallow a claim. This subparagraph shall not affect
the authority of a claimant to obtain de novo judicial
review of a claim pursuant to paragraph (6).
``(F) Legal effect of filing.--
``(i) Statute of limitation tolled.--For
purposes of any applicable statute of
limitations, the filing of a claim with the
receiver shall constitute a commencement of an
action.
``(ii) No prejudice to other actions.--
Subject to paragraph (10), the filing of a
claim with the receiver shall not prejudice any
right of the claimant to continue any action
which was filed before the date of the
appointment of the receiver, subject to the
determination of claims by the receiver.
``(6) Provision for judicial determination of claims.--
``(A) In general.--The claimant may file suit on a
claim (or continue an action commenced before the
appointment of the receiver) in the district or
territorial court of the United States for the district
within which the principal place of business of the
regulated entity is located or the United States
District Court for the District of Columbia (and such
court shall have jurisdiction to hear such claim),
before the end of the 60-day period beginning on the
earlier of--
``(i) the end of the period described in
paragraph (5)(A)(i) with respect to any claim
against a regulated entity for which the Agency
is receiver; or
``(ii) the date of any notice of
disallowance of such claim pursuant to
paragraph (5)(A)(i).
``(B) Statute of limitations.--A claim shall be
deemed to be disallowed (other than any portion of such
claim which was allowed by the receiver), and such
disallowance shall be final, and the claimant shall
have no further rights or remedies with respect to such
claim, if the claimant fails, before the end of the 60-
day period described under subparagraph (A), to file
suit on such claim (or continue an action commenced
before the appointment of the receiver).
``(7) Review of claims.--
``(A) Other review procedures.--
``(i) In general.--The Agency shall
establish such alternative dispute resolution
processes as may be appropriate for the
resolution of claims filed under paragraph
(5)(A)(i).
``(ii) Criteria.--In establishing
alternative dispute resolution processes, the
Agency shall strive for procedures which are
expeditious, fair, independent, and low cost.
``(iii) Voluntary binding or nonbinding
procedures.--The Agency may establish both
binding and nonbinding processes, which may be
conducted by any government or private party.
All parties, including the claimant and the
Agency, must agree to the use of the process in
a particular case.
``(B) Consideration of incentives.--The Agency
shall seek to develop incentives for claimants to
participate in the alternative dispute resolution
process.
``(8) Expedited determination of claims.--
``(A) Establishment required.--The Agency shall
establish a procedure for expedited relief outside of
the routine claims process established under paragraph
(5) for claimants who--
``(i) allege the existence of legally valid
and enforceable or perfected security interests
in assets of any regulated entity for which the
Agency has been appointed receiver; and
``(ii) allege that irreparable injury will
occur if the routine claims procedure is
followed.
``(B) Determination period.--Before the end of the
90-day period beginning on the date any claim is filed
in accordance with the procedures established under
subparagraph (A), the Director shall--
``(i) determine--
``(I) whether to allow or disallow
such claim; or
``(II) whether such claim should be
determined pursuant to the procedures
established under paragraph (5); and
``(ii) notify the claimant of the
determination, and if the claim is disallowed,
provide a statement of each reason for the
disallowance and the procedure for obtaining
agency review or judicial determination.
``(C) Period for filing or renewing suit.--Any
claimant who files a request for expedited relief shall
be permitted to file a suit, or to continue a suit
filed before the appointment of the receiver, seeking a
determination of the rights of the claimant with
respect to such security interest after the earlier
of--
``(i) the end of the 90-day period
beginning on the date of the filing of a
request for expedited relief; or
``(ii) the date the Agency denies the
claim.
``(D) Statute of limitations.--If an action
described under subparagraph (C) is not filed, or the
motion to renew a previously filed suit is not made,
before the end of the 30-day period beginning on the
date on which such action or motion may be filed under
subparagraph (B), the claim shall be deemed to be
disallowed as of the end of such period (other than any
portion of such claim which was allowed by the
receiver), such disallowance shall be final, and the
claimant shall have no further rights or remedies with
respect to such claim.
``(E) Legal effect of filing.--
``(i) Statute of limitation tolled.--For
purposes of any applicable statute of
limitations, the filing of a claim with the
receiver shall constitute a commencement of an
action.
``(ii) No prejudice to other actions.--
Subject to paragraph (10), the filing of a
claim with the receiver shall not prejudice any
right of the claimant to continue any action
that was filed before the appointment of the
receiver, subject to the determination of
claims by the receiver.
``(9) Payment of claims.--
``(A) In general.--The receiver may, in the
discretion of the receiver, and to the extent funds are
available from the assets of the regulated entity, pay
creditor claims, in such manner and amounts as are
authorized under this section, which are--
``(i) allowed by the receiver;
``(ii) approved by the Agency pursuant to a
final determination pursuant to paragraph (7)
or (8); or
``(iii) determined by the final judgment of
any court of competent jurisdiction.
``(B) Agreements against the interest of the
agency.--No agreement that tends to diminish or defeat
the interest of the Agency in any asset acquired by the
Agency as receiver under this section shall be valid
against the Agency unless such agreement is in writing,
and executed by an authorized official of the regulated
entity, except that such requirements for qualified
financial contracts shall be applied in a manner
consistent with reasonable business trading practices
in the financial contracts market.
``(C) Payment of dividends on claims.--The receiver
may, in the sole discretion of the receiver, pay from
the assets of the regulated entity dividends on proved
claims at any time, and no liability shall attach to
the Agency, by reason of any such payment, for failure
to pay dividends to a claimant whose claim is not
proved at the time of any such payment.
``(D) Rulemaking authority of the director.--The
Director may prescribe such rules, including
definitions of terms, as the Director deems appropriate
to establish a single uniform interest rate for, or to
make payments of post-insolvency interest to creditors
holding proven claims against the receivership estates
of regulated entities following satisfaction by the
receiver of the principal amount of all creditor
claims.
``(10) Suspension of legal actions.--
``(A) In general.--After the appointment of a
conservator or receiver for a regulated entity, the
conservator or receiver may, in any judicial action or
proceeding to which such regulated entity is or becomes
a party, request a stay for a period not to exceed--
``(i) 45 days, in the case of any
conservator; and
``(ii) 90 days, in the case of any
receiver.
``(B) Grant of stay by all courts required.--Upon
receipt of a request by any conservator or receiver
under subparagraph (A) for a stay of any judicial
action or proceeding in any court with jurisdiction of
such action or proceeding, the court shall grant such
stay as to all parties.
``(11) Additional rights and duties.--
``(A) Prior final adjudication.--The Agency shall
abide by any final unappealable judgment of any court
of competent jurisdiction which was rendered before the
appointment of the Agency as conservator or receiver.
``(B) Rights and remedies of conservator or
receiver.--In the event of any appealable judgment, the
Agency as conservator or receiver shall--
``(i) have all the rights and remedies
available to the regulated entity (before the
appointment of such conservator or receiver)
and the Agency, including removal to Federal
court and all appellate rights; and
``(ii) not be required to post any bond in
order to pursue such remedies.
``(C) No attachment or execution.--No attachment or
execution may issue by any court upon assets in the
possession of the receiver.
``(D) Limitation on judicial review.--Except as
otherwise provided in this subsection, no court shall
have jurisdiction over--
``(i) any claim or action for payment from,
or any action seeking a determination of rights
with respect to, the assets of any regulated
entity for which the Agency has been appointed
receiver; or
``(ii) any claim relating to any act or
omission of such regulated entity or the Agency
as receiver.
``(E) Disposition of assets.--In exercising any
right, power, privilege, or authority as conservator or
receiver in connection with any sale or disposition of
assets of a regulated entity for which the Agency has
been appointed conservator or receiver, the Agency
shall conduct its operations in a manner which
maintains stability in the housing finance markets and,
to the extent consistent with that goal--
``(i) maximizes the net present value
return from the sale or disposition of such
assets;
``(ii) minimizes the amount of any loss
realized in the resolution of cases; and
``(iii) ensures adequate competition and
fair and consistent treatment of offerors.
``(12) Statute of limitations for actions brought by
conservator or receiver.--
``(A) In general.--Notwithstanding any provision of
any contract, the applicable statute of limitations
with regard to any action brought by the Agency as
conservator or receiver shall be--
``(i) in the case of any contract claim,
the longer of--
``(I) the 6-year period beginning
on the date the claim accrues; or
``(II) the period applicable under
State law; and
``(ii) in the case of any tort claim, the
longer of--
``(I) the 3-year period beginning
on the date the claim accrues; or
``(II) the period applicable under
State law.
``(B) Determination of the date on which a claim
accrues.--For purposes of subparagraph (A), the date on
which the statute of limitations begins to run on any
claim described in such subparagraph shall be the later
of--
``(i) the date of the appointment of the
Agency as conservator or receiver; or
``(ii) the date on which the cause of
action accrues.
``(13) Revival of expired state causes of action.--
``(A) In general.--In the case of any tort claim
described under subparagraph (B) for which the statute
of limitations applicable under State law with respect
to such claim has expired not more than 5 years before
the appointment of the Agency as conservator or
receiver, the Agency may bring an action as conservator
or receiver on such claim without regard to the
expiration of the statute of limitation applicable
under State law.
``(B) Claims described.--A tort claim referred to
under subparagraph (A) is a claim arising from fraud,
intentional misconduct resulting in unjust enrichment,
or intentional misconduct resulting in substantial loss
to the regulated entity.
``(14) Accounting and recordkeeping requirements.--
``(A) In general.--The Agency as conservator or
receiver shall, consistent with the accounting and
reporting practices and procedures established by the
Agency, maintain a full accounting of each
conservatorship and receivership or other disposition
of a regulated entity in default.
``(B) Annual accounting or report.--With respect to
each conservatorship or receivership, the Agency shall
make an annual accounting or report available to the
Board, the Comptroller General of the United States,
the Committee on Banking, Housing, and Urban Affairs of
the Senate, and the Committee on Financial Services of
the House of Representatives.
``(C) Availability of reports.--Any report prepared
under subparagraph (B) shall be made available by the
Agency upon request to any shareholder of a regulated
entity or any member of the public.
``(D) Recordkeeping requirement.--After the end of
the 6-year period beginning on the date that the
conservatorship or receivership is terminated by the
Director, the Agency may destroy any records of such
regulated entity which the Agency, in the discretion of
the Agency, determines to be unnecessary unless
directed not to do so by a court of competent
jurisdiction or governmental agency, or prohibited by
law.
``(15) Fraudulent transfers.--
``(A) In general.--The Agency, as conservator or
receiver, may avoid a transfer of any interest of a
regulated entity-affiliated party, or any person who
the conservator or receiver determines is a debtor of
the regulated entity, in property, or any obligation
incurred by such party or person, that was made within
5 years of the date on which the Agency was appointed
conservator or receiver, if such party or person
voluntarily or involuntarily made such transfer or
incurred such liability with the intent to hinder,
delay, or defraud the regulated entity, the Agency, the
conservator, or receiver.
``(B) Right of recovery.--To the extent a transfer
is avoided under subparagraph (A), the conservator or
receiver may recover, for the benefit of the regulated
entity, the property transferred, or, if a court so
orders, the value of such property (at the time of such
transfer) from--
``(i) the initial transferee of such
transfer or the regulated entity-affiliated
party or person for whose benefit such transfer
was made; or
``(ii) any immediate or mediate transferee
of any such initial transferee.
``(C) Rights of transferee or obligee.--The
conservator or receiver may not recover under
subparagraph (B) from--
``(i) any transferee that takes for value,
including satisfaction or securing of a present
or antecedent debt, in good faith; or
``(ii) any immediate or mediate good faith
transferee of such transferee.
``(D) Rights under this paragraph.--The rights
under this paragraph of the conservator or receiver
described under subparagraph (A) shall be superior to
any rights of a trustee or any other party (other than
any party which is a Federal agency) under title 11,
United States Code.
``(16) Attachment of assets and other injunctive relief.--
Subject to paragraph (17), any court of competent jurisdiction
may, at the request of the conservator or receiver, issue an
order in accordance with Rule 65 of the Federal Rules of Civil
Procedure, including an order placing the assets of any person
designated by the Agency or such conservator under the control
of the court, and appointing a trustee to hold such assets.
``(17) Standards of proof.--Rule 65 of the Federal Rules of
Civil Procedure shall apply with respect to any proceeding
under paragraph (16) without regard to the requirement of such
rule that the applicant show that the injury, loss, or damage
is irreparable and immediate.
``(18) Treatment of claims arising from breach of contracts
executed by the receiver or conservator.--
``(A) In general.--Notwithstanding any other
provision of this subsection, any final and
unappealable judgment for monetary damages entered
against a receiver or conservator for the breach of an
agreement executed or approved in writing by such
receiver or conservator after the date of its
appointment, shall be paid as an administrative expense
of the receiver or conservator.
``(B) No limitation of power.--Nothing in this
paragraph shall be construed to limit the power of a
receiver or conservator to exercise any rights under
contract or law, including to terminate, breach,
cancel, or otherwise discontinue such agreement.
``(19) General exceptions.--
``(A) Limitations.--The rights of a conservator or
receiver appointed under this section shall be subject
to the limitations on the powers of a receiver under
sections 402 through 407 of the Federal Deposit
Insurance Corporation Improvement Act of 1991 (12
U.S.C. 4402 through 4407).
``(B) Mortgages held in trust.--
``(i) In general.--Any mortgage, pool of
mortgages, or interest in a pool of mortgages,
held in trust, custodial, or agency capacity by
a regulated entity for the benefit of persons
other than the regulated entity shall not be
available to satisfy the claims of creditors
generally.
``(ii) Holding of mortgages.--Any mortgage,
pool of mortgages, or interest in a pool of
mortgages, described under clause (i) shall be
held by the conservator or receiver appointed
under this section for the beneficial owners of
such mortgage, pool of mortgages, or interest
in a pool of mortgages in accordance with the
terms of the agreement creating such trust,
custodial, or other agency arrangement.
``(iii) Liability of receiver.--The
liability of a receiver appointed under this
section for damages shall, in the case of any
contingent or unliquidated claim relating to
the mortgages held in trust, be estimated in
accordance set forth in the regulations of the
Director.
``(c) Priority of Expenses and Unsecured Claims.--
``(1) In general.--Unsecured claims against a regulated
entity, or a receiver, that are proven to the satisfaction of
the receiver shall have priority in the following order:
``(A) Administrative expenses of the receiver.
``(B) Any other general or senior liability of the
regulated entity and claims of other Federal home loan
banks arising from their payment obligations (including
joint and several payment obligations).
``(C) Any obligation subordinated to general
creditors.
``(D) Any obligation to shareholders or members
arising as a result of their status as shareholder or
members.
``(2) Creditors similarly situated.--All creditors that are
similarly situated under paragraph (1) shall be treated in a
similar manner, except that the Agency may make such other
payments to creditors necessary to maximize the present value
return from the sale or disposition or such regulated entity's
assets or to minimize the amount of any loss realized in the
resolution of cases so long as all creditors similarly situated
receive not less than the amount provided under subsection
(e)(2).
``(3) Definition.--The term `administrative expenses of the
receiver' shall include the actual, necessary costs and
expenses incurred by the receiver in preserving the assets of
the regulated entity or liquidating or otherwise resolving the
affairs of the regulated entity. Such expenses shall include
obligations that are incurred by the receiver after appointment
as receiver that the Director determines are necessary and
appropriate to facilitate the smooth and orderly liquidation or
other resolution of the regulated entity.
``(d) Provisions Relating to Contracts Entered Into Before
Appointment of Conservator or Receiver.--
``(1) Authority to repudiate contracts.--In addition to any
other rights a conservator or receiver may have, the
conservator or receiver for any regulated entity may disaffirm
or repudiate any contract or lease--
``(A) to which such regulated entity is a party;
``(B) the performance of which the conservator or
receiver, in its sole discretion, determines to be
burdensome; and
``(C) the disaffirmance or repudiation of which the
conservator or receiver determines, in its sole
discretion, will promote the orderly administration of
the affairs of the regulated entity.
``(2) Timing of repudiation.--The conservator or receiver
shall determine whether or not to exercise the rights of
repudiation under this subsection within a reasonable period
following such appointment.
``(3) Claims for damages for repudiation.--
``(A) In general.--Except as otherwise provided
under subparagraph (C) and paragraphs (4), (5), and
(6), the liability of the conservator or receiver for
the disaffirmance or repudiation of any contract
pursuant to paragraph (1) shall be--
``(i) limited to actual direct compensatory
damages; and
``(ii) determined as of--
``(I) the date of the appointment
of the conservator or receiver; or
``(II) in the case of any contract
or agreement referred to in paragraph
(8), the date of the disaffirmance or
repudiation of such contract or
agreement.
``(B) No liability for other damages.--For purposes
of subparagraph (A), the term `actual direct
compensatory damages' shall not include--
``(i) punitive or exemplary damages;
``(ii) damages for lost profits or
opportunity; or
``(iii) damages for pain and suffering.
``(C) Measure of damages for repudiation of
financial contracts.--In the case of any qualified
financial contract or agreement to which paragraph (8)
applies, compensatory damages shall be--
``(i) deemed to include normal and
reasonable costs of cover or other reasonable
measures of damages utilized in the industries
for such contract and agreement claims; and
``(ii) paid in accordance with this
subsection and subsection (e), except as
otherwise specifically provided in this
section.
``(4) Leases under which the regulated entity is the
lessee.--
``(A) In general.--If the conservator or receiver
disaffirms or repudiates a lease under which the
regulated entity was the lessee, the conservator or
receiver shall not be liable for any damages (other
than damages determined under subparagraph (B)) for the
disaffirmance or repudiation of such lease.
``(B) Payments of rent.--Notwithstanding
subparagraph (A), the lessor under a lease to which
that subparagraph applies shall--
``(i) be entitled to the contractual rent
accruing before the later of the date--
``(I) the notice of disaffirmance
or repudiation is mailed; or
``(II) the disaffirmance or
repudiation becomes effective, unless
the lessor is in default or breach of
the terms of the lease;
``(ii) have no claim for damages under any
acceleration clause or other penalty provision
in the lease; and
``(iii) have a claim for any unpaid rent,
subject to all appropriate offsets and
defenses, due as of the date of the
appointment, which shall be paid in accordance
with this subsection and subsection (e).
``(5) Leases under which the regulated entity is the
lessor.--
``(A) In general.--If the conservator or receiver
repudiates an unexpired written lease of real property
of the regulated entity under which the regulated
entity is the lessor and the lessee is not, as of the
date of such repudiation, in default, the lessee under
such lease may either--
``(i) treat the lease as terminated by such
repudiation; or
``(ii) remain in possession of the
leasehold interest for the balance of the term
of the lease, unless the lessee defaults under
the terms of the lease after the date of such
repudiation.
``(B) Provisions applicable to lessee remaining in
possession.--If any lessee under a lease described
under subparagraph (A) remains in possession of a
leasehold interest under clause (ii) of such
subparagraph--
``(i) the lessee--
``(I) shall continue to pay the
contractual rent pursuant to the terms
of the lease after the date of the
repudiation of such lease; and
``(II) may offset against any rent
payment which accrues after the date of
the repudiation of the lease, and any
damages which accrue after such date
due to the nonperformance of any
obligation of the regulated entity
under the lease after such date; and
``(ii) the conservator or receiver shall
not be liable to the lessee for any damages
arising after such date as a result of the
repudiation other than the amount of any offset
allowed under clause (i)(II).
``(6) Contracts for the sale of real property.--
``(A) In general.--If the conservator or receiver
repudiates any contract for the sale of real property
and the purchaser of such real property under such
contract is in possession, and is not, as of the date
of such repudiation, in default, such purchaser may
either--
``(i) treat the contract as terminated by
such repudiation; or
``(ii) remain in possession of such real
property.
``(B) Provisions applicable to purchaser remaining
in possession.--If any purchaser of real property under
any contract described under subparagraph (A) remains
in possession of such property under clause (ii) of
such subparagraph--
``(i) the purchaser--
``(I) shall continue to make all
payments due under the contract after
the date of the repudiation of the
contract; and
``(II) may offset against any such
payments any damages which accrue after
such date due to the nonperformance
(after such date) of any obligation of
the regulated entity under the
contract; and
``(ii) the conservator or receiver shall--
``(I) not be liable to the
purchaser for any damages arising after
such date as a result of the
repudiation other than the amount of
any offset allowed under clause
(i)(II);
``(II) deliver title to the
purchaser in accordance with the
provisions of the contract; and
``(III) have no obligation under
the contract other than the performance
required under subclause (II).
``(C) Assignment and sale allowed.--
``(i) In general.--No provision of this
paragraph shall be construed as limiting the
right of the conservator or receiver to assign
the contract described under subparagraph (A),
and sell the property subject to the contract
and the provisions of this paragraph.
``(ii) No liability after assignment and
sale.--If an assignment and sale described
under clause (i) is consummated, the
conservator or receiver shall have no further
liability under the contract described under
subparagraph (A), or with respect to the real
property which was the subject of such
contract.
``(7) Provisions applicable to service contracts.--
``(A) Services performed before appointment.--In
the case of any contract for services between any
person and any regulated entity for which the Agency
has been appointed conservator or receiver, any claim
of such person for services performed before the
appointment of the conservator or the receiver shall
be--
``(i) a claim to be paid in accordance with
subsections (b) and (e); and
``(ii) deemed to have arisen as of the date
the conservator or receiver was appointed.
``(B) Services performed after appointment and
prior to repudiation.--If, in the case of any contract
for services described under subparagraph (A), the
conservator or receiver accepts performance by the
other person before the conservator or receiver makes
any determination to exercise the right of repudiation
of such contract under this section--
``(i) the other party shall be paid under
the terms of the contract for the services
performed; and
``(ii) the amount of such payment shall be
treated as an administrative expense of the
conservatorship or receivership.
``(C) Acceptance of performance no bar to
subsequent repudiation.--The acceptance by any
conservator or receiver of services referred to under
subparagraph (B) in connection with a contract
described in such subparagraph shall not affect the
right of the conservator or receiver to repudiate such
contract under this section at any time after such
performance.
``(8) Certain qualified financial contracts.--
``(A) Rights of parties to contracts.--Subject to
paragraphs (9) and (10) and notwithstanding any other
provision of this Act, any other Federal law, or the
law of any State, no person shall be stayed or
prohibited from exercising--
``(i) any right such person has to cause
the termination, liquidation, or acceleration
of any qualified financial contract with a
regulated entity that arises upon the
appointment of the Agency as receiver for such
regulated entity at any time after such
appointment;
``(ii) any right under any security
agreement or arrangement or other credit
enhancement relating to one or more qualified
financial contracts described in clause (i); or
``(iii) any right to offset or net out any
termination value, payment amount, or other
transfer obligation arising under or in
connection with 1 or more contracts and
agreements described in clause (i), including
any master agreement for such contracts or
agreements.
``(B) Applicability of other provisions.--Paragraph
(10) of subsection (b) shall apply in the case of any
judicial action or proceeding brought against any
receiver referred to under subparagraph (A), or the
regulated entity for which such receiver was appointed,
by any party to a contract or agreement described under
subparagraph (A)(i) with such regulated entity.
``(C) Certain transfers not avoidable.--
``(i) In general.--Notwithstanding
paragraph (11) or any other Federal or State
laws relating to the avoidance of preferential
or fraudulent transfers, the Agency, whether
acting as such or as conservator or receiver of
a regulated entity, may not avoid any transfer
of money or other property in connection with
any qualified financial contract with a
regulated entity.
``(ii) Exception for certain transfers.--
Clause (i) shall not apply to any transfer of
money or other property in connection with any
qualified financial contract with a regulated
entity if the Agency determines that the
transferee had actual intent to hinder, delay,
or defraud such regulated entity, the creditors
of such regulated entity, or any conservator or
receiver appointed for such regulated entity.
``(D) Certain contracts and agreements defined.--In
this subsection:
``(i) Qualified financial contract.--The
term `qualified financial contract' means any
securities contract, commodity contract,
forward contract, repurchase agreement, swap
agreement, and any similar agreement that the
Agency determines by regulation, resolution, or
order to be a qualified financial contract for
purposes of this paragraph.
``(ii) Securities contract.--The term
`securities contract'--
``(I) means a contract for the
purchase, sale, or loan of a security,
a certificate of deposit, a mortgage
loan, or any interest in a mortgage
loan, a group or index of securities,
certificates of deposit, or mortgage
loans or interests therein (including
any interest therein or based on the
value thereof) or any option on any of
the foregoing, including any option to
purchase or sell any such security,
certificate of deposit, mortgage loan,
interest, group or index, or option,
and including any repurchase or reverse
repurchase transaction on any such
security, certificate of deposit,
mortgage loan, interest, group or
index, or option;
``(II) does not include any
purchase, sale, or repurchase
obligation under a participation in a
commercial mortgage loan unless the
Agency determines by regulation,
resolution, or order to include any
such agreement within the meaning of
such term;
``(III) means any option entered
into on a national securities exchange
relating to foreign currencies;
``(IV) means the guarantee by or to
any securities clearing agency of any
settlement of cash, securities,
certificates of deposit, mortgage loans
or interests therein, group or index of
securities, certificates of deposit, or
mortgage loans or interests therein
(including any interest therein or
based on the value thereof) or option
on any of the foregoing, including any
option to purchase or sell any such
security, certificate of deposit,
mortgage loan, interest, group or
index, or option;
``(V) means any margin loan;
``(VI) means any other agreement or
transaction that is similar to any
agreement or transaction referred to in
this clause;
``(VII) means any combination of
the agreements or transactions referred
to in this clause;
``(VIII) means any option to enter
into any agreement or transaction
referred to in this clause;
``(IX) means a master agreement
that provides for an agreement or
transaction referred to in subclause
(I), (III), (IV), (V), (VI), (VII), or
(VIII), together with all supplements
to any such master agreement, without
regard to whether the master agreement
provides for an agreement or
transaction that is not a securities
contract under this clause, except that
the master agreement shall be
considered to be a securities contract
under this clause only with respect to
each agreement or transaction under the
master agreement that is referred to in
subclause (I), (III), (IV), (V), (VI),
(VII), or (VIII); and
``(X) means any security agreement
or arrangement or other credit
enhancement related to any agreement or
transaction referred to in this clause,
including any guarantee or
reimbursement obligation in connection
with any agreement or transaction
referred to in this clause.
``(iii) Commodity contract.--The term
`commodity contract' means--
``(I) with respect to a futures
commission merchant, a contract for the
purchase or sale of a commodity for
future delivery on, or subject to the
rules of, a contract market or board of
trade;
``(II) with respect to a foreign
futures commission merchant, a foreign
future;
``(III) with respect to a leverage
transaction merchant, a leverage
transaction;
``(IV) with respect to a clearing
organization, a contract for the
purchase or sale of a commodity for
future delivery on, or subject to the
rules of, a contract market or board of
trade that is cleared by such clearing
organization, or commodity option
traded on, or subject to the rules of,
a contract market or board of trade
that is cleared by such clearing
organization;
``(V) with respect to a commodity
options dealer, a commodity option;
``(VI) any other agreement or
transaction that is similar to any
agreement or transaction referred to in
this clause;
``(VII) any combination of the
agreements or transactions referred to
in this clause;
``(VIII) any option to enter into
any agreement or transaction referred
to in this clause;
``(IX) a master agreement that
provides for an agreement or
transaction referred to in subclause
(I), (II), (III), (IV), (V), (VI),
(VII), or (VIII), together with all
supplements to any such master
agreement, without regard to whether
the master agreement provides for an
agreement or transaction that is not a
commodity contract under this clause,
except that the master agreement shall
be considered to be a commodity
contract under this clause only with
respect to each agreement or
transaction under the master agreement
that is referred to in subclause (I),
(II), (III), (IV), (V), (VI), (VII), or
(VIII); or
``(X) any security agreement or
arrangement or other credit enhancement
related to any agreement or transaction
referred to in this clause, including
any guarantee or reimbursement
obligation in connection with any
agreement or transaction referred to in
this clause.
``(iv) Forward contract.--The term `forward
contract' means--
``(I) a contract (other than a
commodity contract) for the purchase,
sale, or transfer of a commodity or any
similar good, article, service, right,
or interest which is presently or in
the future becomes the subject of
dealing in the forward contract trade,
or product or byproduct thereof, with a
maturity date more than 2 days after
the date the contract is entered into,
including, a repurchase transaction,
reverse repurchase transaction,
consignment, lease, swap, hedge
transaction, deposit, loan, option,
allocated transaction, unallocated
transaction, or any other similar
agreement;
``(II) any combination of
agreements or transactions referred to
in subclauses (I) and (III);
``(III) any option to enter into
any agreement or transaction referred
to in subclause (I) or (II);
``(IV) a master agreement that
provides for an agreement or
transaction referred to in subclauses
(I), (II), or (III), together with all
supplements to any such master
agreement, without regard to whether
the master agreement provides for an
agreement or transaction that is not a
forward contract under this clause,
except that the master agreement shall
be considered to be a forward contract
under this clause only with respect to
each agreement or transaction under the
master agreement that is referred to in
subclause (I), (II), or (III); or
``(V) any security agreement or
arrangement or other credit enhancement
related to any agreement or transaction
referred to in subclause (I), (II),
(III), or (IV), including any guarantee
or reimbursement obligation in
connection with any agreement or
transaction referred to in any such
subclause.
``(v) Repurchase agreement.--The term
`repurchase agreement' (which definition also
applies to a reverse repurchase agreement)--
``(I) means an agreement, including
related terms, which provides for the
transfer of one or more certificates of
deposit, mortgage-related securities
(as such term is defined in the
Securities Exchange Act of 1934),
mortgage loans, interests in mortgage-
related securities or mortgage loans,
eligible bankers' acceptances,
qualified foreign government securities
or securities that are direct
obligations of, or that are fully
guaranteed by, the United States or any
agency of the United States against the
transfer of funds by the transferee of
such certificates of deposit, eligible
bankers' acceptances, securities,
mortgage loans, or interests with a
simultaneous agreement by such
transferee to transfer to the
transferor thereof certificates of
deposit, eligible bankers' acceptances,
securities, mortgage loans, or
interests as described above, at a date
certain not later than 1 year after
such transfers or on demand, against
the transfer of funds, or any other
similar agreement;
``(II) does not include any
repurchase obligation under a
participation in a commercial mortgage
loan unless the Agency determines by
regulation, resolution, or order to
include any such participation within
the meaning of such term;
``(III) means any combination of
agreements or transactions referred to
in subclauses (I) and (IV);
``(IV) means any option to enter
into any agreement or transaction
referred to in subclause (I) or (III);
``(V) means a master agreement that
provides for an agreement or
transaction referred to in subclause
(I), (III), or (IV), together with all
supplements to any such master
agreement, without regard to whether
the master agreement provides for an
agreement or transaction that is not a
repurchase agreement under this clause,
except that the master agreement shall
be considered to be a repurchase
agreement under this subclause only
with respect to each agreement or
transaction under the master agreement
that is referred to in subclause (I),
(III), or (IV); and
``(VI) means any security agreement
or arrangement or other credit
enhancement related to any agreement or
transaction referred to in subclause
(I), (III), (IV), or (V), including any
guarantee or reimbursement obligation
in connection with any agreement or
transaction referred to in any such
subclause.
For purposes of this clause, the term
`qualified foreign government security' means a
security that is a direct obligation of, or
that is fully guaranteed by, the central
government of a member of the Organization for
Economic Cooperation and Development (as
determined by regulation or order adopted by
the appropriate Federal banking authority).
``(vi) Swap agreement.--The term `swap
agreement' means--
``(I) any agreement, including the
terms and conditions incorporated by
reference in any such agreement, which
is an interest rate swap, option,
future, or forward agreement, including
a rate floor, rate cap, rate collar,
cross-currency rate swap, and basis
swap; a spot, same day-tomorrow,
tomorrow-next, forward, or other
foreign exchange or precious metals
agreement; a currency swap, option,
future, or forward agreement; an equity
index or equity swap, option, future,
or forward agreement; a debt index or
debt swap, option, future, or forward
agreement; a total return, credit
spread or credit swap, option, future,
or forward agreement; a commodity index
or commodity swap, option, future, or
forward agreement; or a weather swap,
weather derivative, or weather option;
``(II) any agreement or transaction
that is similar to any other agreement
or transaction referred to in this
clause and that is of a type that has
been, is presently, or in the future
becomes, the subject of recurrent
dealings in the swap markets (including
terms and conditions incorporated by
reference in such agreement) and that
is a forward, swap, future, or option
on one or more rates, currencies,
commodities, equity securities or other
equity instruments, debt securities or
other debt instruments, quantitative
measures associated with an occurrence,
extent of an occurrence, or contingency
associated with a financial,
commercial, or economic consequence, or
economic or financial indices or
measures of economic or financial risk
or value;
``(III) any combination of
agreements or transactions referred to
in this clause;
``(IV) any option to enter into any
agreement or transaction referred to in
this clause;
``(V) a master agreement that
provides for an agreement or
transaction referred to in subclause
(I), (II), (III), or (IV), together
with all supplements to any such master
agreement, without regard to whether
the master agreement contains an
agreement or transaction that is not a
swap agreement under this clause,
except that the master agreement shall
be considered to be a swap agreement
under this clause only with respect to
each agreement or transaction under the
master agreement that is referred to in
subclause (I), (II), (III), or (IV);
and
``(VI) any security agreement or
arrangement or other credit enhancement
related to any agreements or
transactions referred to in subclause
(I), (II), (III), (IV), or (V),
including any guarantee or
reimbursement obligation in connection
with any agreement or transaction
referred to in any such subclause.
Such term is applicable for purposes of this
subsection only and shall not be construed or
applied so as to challenge or affect the
characterization, definition, or treatment of
any swap agreement under any other statute,
regulation, or rule, including the Securities
Act of 1933, the Securities Exchange Act of
1934, the Public Utility Holding Company Act of
1935, the Trust Indenture Act of 1939, the
Investment Company Act of 1940, the Investment
Advisers Act of 1940, the Securities Investor
Protection Act of 1970, the Commodity Exchange
Act, the Gramm-Leach-Bliley Act, and the Legal
Certainty for Bank Products Act of 2000.
``(vii) Treatment of master agreement as
one agreement.--Any master agreement for any
contract or agreement described in any
preceding clause of this subparagraph (or any
master agreement for such master agreement or
agreements), together with all supplements to
such master agreement, shall be treated as a
single agreement and a single qualified
financial contract. If a master agreement
contains provisions relating to agreements or
transactions that are not themselves qualified
financial contracts, the master agreement shall
be deemed to be a qualified financial contract
only with respect to those transactions that
are themselves qualified financial contracts.
``(viii) Transfer.--The term `transfer'
means every mode, direct or indirect, absolute
or conditional, voluntary or involuntary, of
disposing of or parting with property or with
an interest in property, including retention of
title as a security interest and foreclosure of
the regulated entity's equity of redemption.
``(E) Certain protections in event of appointment
of conservator.--Notwithstanding any other provision of
this Act (other than paragraph (13) of this
subsection), any other Federal law, or the law of any
State, no person shall be stayed or prohibited from
exercising--
``(i) any right such person has to cause
the termination, liquidation, or acceleration
of any qualified financial contract with a
regulated entity in a conservatorship based
upon a default under such financial contract
which is enforceable under applicable
noninsolvency law;
``(ii) any right under any security
agreement or arrangement or other credit
enhancement relating to one or more such
qualified financial contracts; or
``(iii) any right to offset or net out any
termination values, payment amounts, or other
transfer obligations arising under or in
connection with such qualified financial
contracts.
``(F) Clarification.--No provision of law shall be
construed as limiting the right or power of the Agency,
or authorizing any court or agency to limit or delay,
in any manner, the right or power of the Agency to
transfer any qualified financial contract in accordance
with paragraphs (9) and (10) of this subsection or to
disaffirm or repudiate any such contract in accordance
with subsection (d)(1) of this section.
``(G) Walkaway clauses not effective.--
``(i) In general.--Notwithstanding the
provisions of subparagraphs (A) and (E), and
sections 403 and 404 of the Federal Deposit
Insurance Corporation Improvement Act of 1991,
no walkaway clause shall be enforceable in a
qualified financial contract of a regulated
entity in default.
``(ii) Walkaway clause defined.--For
purposes of this subparagraph, the term
`walkaway clause' means a provision in a
qualified financial contract that, after
calculation of a value of a party's position or
an amount due to or from 1 of the parties in
accordance with its terms upon termination,
liquidation, or acceleration of the qualified
financial contract, either does not create a
payment obligation of a party or extinguishes a
payment obligation of a party in whole or in
part solely because of such party's status as a
nondefaulting party.
``(9) Transfer of qualified financial contracts.--In making
any transfer of assets or liabilities of a regulated entity in
default which includes any qualified financial contract, the
conservator or receiver for such regulated entity shall
either--
``(A) transfer to 1 person--
``(i) all qualified financial contracts
between any person (or any affiliate of such
person) and the regulated entity in default;
``(ii) all claims of such person (or any
affiliate of such person) against such
regulated entity under any such contract (other
than any claim which, under the terms of any
such contract, is subordinated to the claims of
general unsecured creditors of such regulated
entity);
``(iii) all claims of such regulated entity
against such person (or any affiliate of such
person) under any such contract; and
``(iv) all property securing or any other
credit enhancement for any contract described
in clause (i) or any claim described in clause
(ii) or (iii) under any such contract; or
``(B) transfer none of the financial contracts,
claims, or property referred to under subparagraph (A)
(with respect to such person and any affiliate of such
person).
``(10) Notification of transfer.--
``(A) In general.--If--
``(i) the conservator or receiver for a
regulated entity in default makes any transfer
of the assets and liabilities of such regulated
entity, and
``(ii) the transfer includes any qualified
financial contract,
the conservator or receiver shall notify any person who
is a party to any such contract of such transfer by
5:00 p.m. (eastern time) on the business day following
the date of the appointment of the receiver in the case
of a receivership, or the business day following such
transfer in the case of a conservatorship.
``(B) Certain rights not enforceable.--
``(i) Receivership.--A person who is a
party to a qualified financial contract with a
regulated entity may not exercise any right
that such person has to terminate, liquidate,
or net such contract under paragraph (8)(A) of
this subsection or section 403 or 404 of the
Federal Deposit Insurance Corporation
Improvement Act of 1991, solely by reason of or
incidental to the appointment of a receiver for
the regulated entity (or the insolvency or
financial condition of the regulated entity for
which the receiver has been appointed)--
``(I) until 5:00 p.m. (eastern
time) on the business day following the
date of the appointment of the
receiver; or
``(II) after the person has
received notice that the contract has
been transferred pursuant to paragraph
(9)(A).
``(ii) Conservatorship.--A person who is a
party to a qualified financial contract with a
regulated entity may not exercise any right
that such person has to terminate, liquidate,
or net such contract under paragraph (8)(E) of
this subsection or section 403 or 404 of the
Federal Deposit Insurance Corporation
Improvement Act of 1991, solely by reason of or
incidental to the appointment of a conservator
for the regulated entity (or the insolvency or
financial condition of the regulated entity for
which the conservator has been appointed).
``(iii) Notice.--For purposes of this
paragraph, the Agency as receiver or
conservator of a regulated entity shall be
deemed to have notified a person who is a party
to a qualified financial contract with such
regulated entity if the Agency has taken steps
reasonably calculated to provide notice to such
person by the time specified in subparagraph
(A).
``(C) Business day defined.--For purposes of this
paragraph, the term `business day' means any day other
than any Saturday, Sunday, or any day on which either
the New York Stock Exchange or the Federal Reserve Bank
of New York is closed.
``(11) Disaffirmance or repudiation of qualified financial
contracts.--In exercising the rights of disaffirmance or
repudiation of a conservator or receiver with respect to any
qualified financial contract to which a regulated entity is a
party, the conservator or receiver for such institution shall
either--
``(A) disaffirm or repudiate all qualified
financial contracts between--
``(i) any person or any affiliate of such
person; and
``(ii) the regulated entity in default; or
``(B) disaffirm or repudiate none of the qualified
financial contracts referred to in subparagraph (A)
(with respect to such person or any affiliate of such
person).
``(12) Certain security interests not avoidable.--No
provision of this subsection shall be construed as permitting
the avoidance of any legally enforceable or perfected security
interest in any of the assets of any regulated entity, except
where such an interest is taken in contemplation of the
insolvency of the regulated entity, or with the intent to
hinder, delay, or defraud the regulated entity or the creditors
of such regulated entity.
``(13) Authority to enforce contracts.--
``(A) In general.--Notwithstanding any provision of
a contract providing for termination, default,
acceleration, or exercise of rights upon, or solely by
reason of, insolvency or the appointment of a
conservator or receiver, the conservator or receiver
may enforce any contract or regulated entity bond
entered into by the regulated entity.
``(B) Certain rights not affected.--No provision of
this paragraph may be construed as impairing or
affecting any right of the conservator or receiver to
enforce or recover under a director's or officer's
liability insurance contract or surety bond under other
applicable law.
``(C) Consent requirement.--
``(i) In general.--Except as otherwise
provided under this section, no person may
exercise any right or power to terminate,
accelerate, or declare a default under any
contract to which a regulated entity is a
party, or to obtain possession of or exercise
control over any property of the regulated
entity, or affect any contractual rights of the
regulated entity, without the consent of the
conservator or receiver, as appropriate, for a
period of--
``(I) 45 days after the date of
appointment of a conservator; or
``(II) 90 days after the date of
appointment of a receiver.
``(ii) Exceptions.--This paragraph shall--
``(I) not apply to a director's or
officer's liability insurance contract;
``(II) not apply to the rights of
parties to any qualified financial
contracts under subsection (d)(8); and
``(III) not be construed as
permitting the conservator or receiver
to fail to comply with otherwise
enforceable provisions of such
contracts.
``(14) Savings clause.--The meanings of terms used in this
subsection are applicable for purposes of this subsection only,
and shall not be construed or applied so as to challenge or
affect the characterization, definition, or treatment of any
similar terms under any other statute, regulation, or rule,
including the Gramm-Leach-Bliley Act, the Legal Certainty for
Bank Products Act of 2000, the securities laws (as that term is
defined in section 3(a)(47) of the Securities Exchange Act of
1934), and the Commodity Exchange Act.
``(15) Exception for federal reserve and federal home loan
banks.--No provision of this subsection shall apply with
respect to--
``(A) any extension of credit from any Federal home
loan bank or Federal Reserve Bank to any regulated
entity; or
``(B) any security interest in the assets of the
regulated entity securing any such extension of credit.
``(e) Valuation of Claims in Default.--
``(1) In general.--Notwithstanding any other provision of
Federal law or the law of any State, and regardless of the
method which the Agency determines to utilize with respect to a
regulated entity in default or in danger of default, including
transactions authorized under subsection (i), this subsection
shall govern the rights of the creditors of such regulated
entity.
``(2) Maximum liability.--The maximum liability of the
Agency, acting as receiver or in any other capacity, to any
person having a claim against the receiver or the regulated
entity for which such receiver is appointed shall equal the
lesser of--
``(A) the amount such claimant would have received
if the Agency had liquidated the assets and liabilities
of such regulated entity without exercising the
authority of the Agency under subsection (i) of this
section; or
``(B) the amount of proceeds realized from the
performance of contracts or sale of the assets of the
regulated entity.
``(f) Limitation on Court Action.--Except as provided in this
section or at the request of the Director, no court may take any action
to restrain or affect the exercise of powers or functions of the Agency
as a conservator or a receiver.
``(g) Liability of Directors and Officers.--
``(1) In general.--A director or officer of a regulated
entity may be held personally liable for monetary damages in
any civil action by, on behalf of, or at the request or
direction of the Agency, which action is prosecuted wholly or
partially for the benefit of the Agency--
``(A) acting as conservator or receiver of such
regulated entity, or
``(B) acting based upon a suit, claim, or cause of
action purchased from, assigned by, or otherwise
conveyed by such receiver or conservator,
for gross negligence, including any similar conduct or conduct
that demonstrates a greater disregard of a duty of care (than
gross negligence) including intentional tortious conduct, as
such terms are defined and determined under applicable State
law.
``(2) No limitation.--Nothing in this paragraph shall
impair or affect any right of the Agency under other applicable
law.
``(h) Damages.--In any proceeding related to any claim against a
director, officer, employee, agent, attorney, accountant, appraiser, or
any other party employed by or providing services to a regulated
entity, recoverable damages determined to result from the improvident
or otherwise improper use or investment of any assets of the regulated
entity shall include principal losses and appropriate interest.
``(i) Limited-Life Regulated Entities.--
``(1) Organization.--
``(A) Purpose.--If a regulated entity is in
default, or if the Agency anticipates that a regulated
entity will default, the Agency may organize a limited-
life regulated entity with those powers and attributes
of the regulated entity in default or in danger of
default that the Director determines necessary, subject
to the provisions of this subsection. The Director
shall grant a temporary charter to the limited-life
regulated entity, and the limited-life regulated entity
shall operate subject to that charter.
``(B) Authorities.--Upon the creation of a limited-
life regulated entity under subparagraph (A), the
limited-life regulated entity may--
``(i) assume such liabilities of the
regulated entity that is in default or in
danger of default as the Agency may, in its
discretion, determine to be appropriate,
provided that the liabilities assumed shall not
exceed the amount of assets of the limited-life
regulated entity;
``(ii) purchase such assets of the
regulated entity that is in default, or in
danger of default, as the Agency may, in its
discretion, determine to be appropriate; and
``(iii) perform any other temporary
function which the Agency may, in its
discretion, prescribe in accordance with this
section.
``(2) Charter.--
``(A) Conditions.--The Agency may grant a temporary
charter if the Agency determines that the continued
operation of the regulated entity in default or in
danger of default is in the best interest of the
national economy and the housing markets.
``(B) Treatment as being in default for certain
purposes.--A limited-life regulated entity shall be
treated as a regulated entity in default at such times
and for such purposes as the Agency may, in its
discretion, determine.
``(C) Management.--A limited-life regulated entity,
upon the granting of its charter, shall be under the
management of a board of directors consisting of not
fewer than 5 nor more than 10 members appointed by the
Agency.
``(D) Bylaws.--The board of directors of a limited-
life regulated entity shall adopt such bylaws as may be
approved by the Agency.
``(3) Capital stock.--No capital stock need be paid into a
limited-life regulated entity by the Agency.
``(4) Investments.--Funds of a limited-life regulated
entity shall be kept on hand in cash, invested in obligations
of the United States or obligations guaranteed as to principal
and interest by the United States, or deposited with the
Agency, or any Federal Reserve bank.
``(5) Exempt status.--Notwithstanding any other provision
of Federal or State law, the limited-life regulated entity, its
franchise, property, and income shall be exempt from all
taxation now or hereafter imposed by the United States, by any
territory, dependency, or possession thereof, or by any State,
county, municipality, or local taxing authority.
``(6) Winding up.--
``(A) In general.--Subject to subparagraph (B),
unless Congress authorizes the sale of the capital
stock of the limited-life regulated entity, not later
than 2 years after the date of its organization, the
Agency shall wind up the affairs of the limited-life
regulated entity.
``(B) Extension.--The Director may, in the
discretion of the Director, extend the status of the
limited-life regulated entity for 3 additional 1-year
periods.
``(7) Transfer of assets and liabilities.--
``(A) In general.--
``(i) Transfer of assets and liabilities.--
The Agency, as receiver, may transfer any
assets and liabilities of a regulated entity in
default, or in danger of default, to the
limited-life regulated entity in accordance
with paragraph (1).
``(ii) Subsequent transfers.--At any time
after a charter is transferred to a limited-
life regulated entity, the Agency, as receiver,
may transfer any assets and liabilities of such
regulated entity in default, or in danger in
default, as the Agency may, in its discretion,
determine to be appropriate in accordance with
paragraph (1).
``(iii) Effective without approval.--The
transfer of any assets or liabilities of a
regulated entity in default, or in danger of
default, transferred to a limited-life
regulated entity shall be effective without any
further approval under Federal or State law,
assignment, or consent with respect thereto.
``(8) Proceeds.--To the extent that available proceeds from
the limited-life regulated entity exceed amounts required to
pay obligations, such proceeds may be paid to the regulated
entity in default, or in danger of default.
``(9) Powers.--
``(A) In general.--Each limited-life regulated
entity created under this subsection shall have all
corporate powers of, and be subject to the same
provisions of law as, the regulated entity in default
or in danger of default to which it relates, except
that--
``(i) the Agency may--
``(I) remove the directors of a
limited-life regulated entity; and
``(II) fix the compensation of
members of the board of directors and
senior management, as determined by the
Agency in its discretion, of a limited-
life regulated entity;
``(ii) the Agency may indemnify the
representatives for purposes of paragraph
(1)(B), and the directors, officers, employees,
and agents of a limited-life regulated entity
on such terms as the Agency determines to be
appropriate; and
``(iii) the board of directors of a
limited-life regulated entity--
``(I) shall elect a chairperson who
may also serve in the position of chief
executive officer, except that such
person shall not serve either as
chairperson or as chief executive
officer without the prior approval of
the Agency; and
``(II) may appoint a chief
executive officer who is not also the
chairperson, except that such person
shall not serve as chief executive
officer without the prior approval of
the Agency.
``(B) Stay of judicial action.--Any judicial action
to which a limited-life regulated entity becomes a
party by virtue of its acquisition of any assets or
assumption of any liabilities of a regulated entity in
default shall be stayed from further proceedings for a
period of up to 45 days at the request of the limited-
life regulated entity. Such period may be modified upon
the consent of all parties.
``(10) Obtaining of credit and incurring of debt.--
``(A) In general.--The limited-life regulated
entity may obtain unsecured credit and incur unsecured
debt in the ordinary course of business.
``(B) Inability to obtain credit.--If the limited-
life regulated entity is unable to obtain unsecured
credit the Director may authorize the obtaining of
credit or the incurring of debt--
``(i) with priority over any or all
administrative expenses;
``(ii) secured by a lien on property that
is not otherwise subject to a lien; or
``(iii) secured by a junior lien on
property that is subject to a lien.
``(C) Limitations.--
``(i) In general.--The Director, after
notice and a hearing, may authorize the
obtaining of credit or the incurring of debt
secured by a senior or equal lien on property
that is subject to a lien (other than mortgages
that collateralize the mortgage-backed
securities issued or guaranteed by the
regulated entity) only if--
``(I) the limited-life regulated
entity is unable to obtain such credit
otherwise; and
``(II) there is adequate protection
of the interest of the holder of the
lien on the property which such senior
or equal lien is proposed to be
granted.
``(ii) Burden of proof.--In any hearing
under this subsection, the Director has the
burden of proof on the issue of adequate
protection.
``(D) Effect on debts and liens.--The reversal or
modification on appeal of an authorization under this
paragraph to obtain credit or incur debt, or of a grant
under this section of a priority or a lien, does not
affect the validity of any debt so incurred, or any
priority or lien so granted, to an entity that extended
such credit in good faith, whether or not such entity
knew of the pendency of the appeal, unless such
authorization and the incurring of such debt, or the
granting of such priority or lien, were stayed pending
appeal.
``(11) Issuance of preferred debt.--A limited-life
regulated entity may, subject to the approval of the Director
and subject to such terms and conditions as the Director may
prescribe, issue notes, bonds, or other debt obligations of a
class to which all other debt obligations of the limited-life
regulated entity shall be subordinate in right and payment.
``(12) No federal status.--
``(A) Agency status.--A limited-life regulated
entity is not an agency, establishment, or
instrumentality of the United States.
``(B) Employee status.--Representatives for
purposes of paragraph (1)(B), interim directors,
directors, officers, employees, or agents of a limited-
life regulated entity are not, solely by virtue of
service in any such capacity, officers or employees of
the United States. Any employee of the Agency or of any
Federal instrumentality who serves at the request of
the Agency as a representative for purposes of
paragraph (1)(B), interim director, director, officer,
employee, or agent of a limited-life regulated entity
shall not--
``(i) solely by virtue of service in any
such capacity lose any existing status as an
officer or employee of the United States for
purposes of title 5, United States Code, or any
other provision of law; or
``(ii) receive any salary or benefits for
service in any such capacity with respect to a
limited-life regulated entity in addition to
such salary or benefits as are obtained through
employment with the Agency or such Federal
instrumentality.
``(13) Additional powers.--In addition to any other powers
granted under this subsection, a limited-life regulated entity
may--
``(A) extend a maturity date or change in an
interest rate or other term of outstanding securities;
``(B) issue securities of the limited-life
regulated entity, for cash, for property, for existing
securities, or in exchange for claims or interests, or
for any other appropriate purposes; and
``(C) take any other action not inconsistent with
this section.
``(j) Other Exemptions.--When acting as a receiver, the following
provisions shall apply with respect to the Agency:
``(1) Exemption from taxation.--The Agency, including its
franchise, its capital, reserves, and surplus, and its income,
shall be exempt from all taxation imposed by any State,
country, municipality, or local taxing authority, except that
any real property of the Agency shall be subject to State,
territorial, county, municipal, or local taxation to the same
extent according to its value as other real property is taxed,
except that, notwithstanding the failure of any person to
challenge an assessment under State law of the value of such
property, and the tax thereon, shall be determined as of the
period for which such tax is imposed.
``(2) Exemption from attachment and liens.--No property of
the Agency shall be subject to levy, attachment, garnishment,
foreclosure, or sale without the consent of the Agency, nor
shall any involuntary lien attach to the property of the
Agency.
``(3) Exemption from penalties and fines.--The Agency shall
not be liable for any amounts in the nature of penalties or
fines, including those arising from the failure of any person
to pay any real property, personal property, probate, or
recording tax or any recording or filing fees when due.
``(k) Prohibition of Charter Revocation.--In no case may a receiver
appointed pursuant to this section revoke, annul, or terminate the
charter of a regulated entity.
``(l) Preservation of Bankruptcy Law .--Nothing in this Act shall
be construed to modify, impair, or supersede the operation of any
provision of title 11 of the United States Code, or the operation of
any provision of title 28 of such Code that relates to cases under such
title 11, except as otherwise provided in section 1367(b) of this Act
and except that a regulated entity may not be a debtor under such title
11.''.
(b) Conforming Amendments.--
(1) Housing and community development act of 1992.--
Subtitle B of title XIII of the Housing and Community
Development Act of 1992 is amended by striking sections 1369
(12 U.S.C. 4619), 1369A (12 U.S.C. 4620), and 1369B (12 U.S.C.
4621).
(2) Federal home loan banks.--Section 25 of the Federal
Home Loan Bank Act (12 U.S.C. 1445) is amended to read as
follows:
``SEC. 25. SUCCESSION OF FEDERAL HOME LOAN BANKS.
``Each Federal Home Loan Bank shall have succession until it is
voluntarily merged with another Bank under this Act, or until it is
merged, reorganized, rehabilitated, liquidated, or otherwise wound up
by the Director in accordance with the provisions of section 1367 of
the Housing and Community Development Act of 1992, or by further Act of
Congress.''.
SEC. 349. CONFORMING AMENDMENTS.
Title XIII of the Housing and Community Development Act of 1992, as
amended by the preceding provisions of this title, is further amended--
(1) in sections 1365 (12 U.S.C. 4615) through 1369D (12
U.S.C. 4623), but not including section 1367 (12 U.S.C. 4617)
as amended by section 349 of this title--
(A) by striking ``An enterprise'' each place such
term appears and inserting ``A regulated entity'';
(B) by striking ``an enterprise'' each place such
term appears and inserting ``a regulated entity''; and
(C) by striking ``the enterprise'' each place such
term appears and inserting ``the regulated entity'';
(2) in section 1366 (12 U.S.C. 4616)--
(A) in subsection (b)(7), by striking ``section
1369 (excluding subsection (a)(1) and (2))'' and
inserting ``section 1367''; and
(B) in subsection (d), by striking ``the
enterprises'' and inserting ``the regulated entities'';
(3) in section 1368(d) (12 U.S.C. 4618(d)), by striking
``Committee on Banking, Finance and Urban Affairs'' and
inserting ``Committee on Financial Services'';
(4) in section 1369C (12 U.S.C. 4622)--
(A) in subsection (a)(4), by striking ``activities
(including existing and new programs)'' and inserting
``activities, services, undertakings, and offerings
(including existing and new products (as such term is
defined in section 1321(f))''; and
(B) in subsection (c), by striking ``any
enterprise'' and inserting ``any regulated entity'';
and
(5) in subsections (a) and (d) of section 1369D, by
striking ``section 1366 or 1367 or action under section 1369)''
each place such phrase appears and inserting ``section 1367)''.
CHAPTER 4--ENFORCEMENT ACTIONS
SEC. 351. CEASE-AND-DESIST PROCEEDINGS.
Section 1371 of the Housing and Community Development Act of 1992
(12 U.S.C. 4631) is amended--
(1) by striking subsections (a) and (b) and inserting the
following new subsections:
``(a) Issuance for Unsafe or Unsound Practices and Violations of
Rules or Laws.--If, in the opinion of the Director, a regulated entity
or any regulated entity-affiliated party is engaging or has engaged, or
the Director has reasonable cause to believe that the regulated entity
or any regulated entity-affiliated party is about to engage, in an
unsafe or unsound practice in conducting the business of the regulated
entity or is violating or has violated, or the Director has reasonable
cause to believe that the regulated entity or any regulated entity-
affiliated party is about to violate, a law, rule, or regulation, or
any condition imposed in writing by the Director in connection with the
granting of any application or other request by the regulated entity or
any written agreement entered into with the Director, the Director may
issue and serve upon the regulated entity or such party a notice of
charges in respect thereof. The Director may not, pursuant to this
section, enforce compliance with any housing goal established under
subpart B of part 2 of subtitle A of this title, with section 1336 or
1337 of this title, with subsection (m) or (n) of section 309 of the
Federal National Mortgage Association Charter Act (12 U.S.C. 1723a(m),
(n)), with subsection (e) or (f) of section 307 of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1456(e), (f)), or with
paragraph (5) of section 10(j) of the Federal Home Loan Bank Act (12
U.S.C. 1430(j)).
``(b) Issuance for Unsatisfactory Rating.--If a regulated entity
receives, in its most recent report of examination, a less-than-
satisfactory rating for asset quality, management, earnings, or
liquidity, the Director may (if the deficiency is not corrected) deem
the regulated entity to be engaging in an unsafe or unsound practice
for purposes of this subsection.'';
(2) in subsection (c)(2), by striking ``enterprise,
executive officer, or director'' and inserting ``regulated
entity or regulated entity-affiliated party''; and
(3) in subsection (d)--
(A) in the matter preceding paragraph (1), by
striking ``enterprise, executive officer, or director''
and inserting ``regulated entity or regulated entity-
affiliated party'';
(B) in paragraph (1)--
(i) by striking ``an executive officer or a
director'' and inserting ``a regulated entity
affiliated party''; and
(ii) by inserting ``(including
reimbursement of compensation under section
1318)'' after ``reimbursement'';
(C) in paragraph (6), by striking ``and'' at the
end;
(D) by redesignating paragraph (7) as paragraph
(8); and
(E) by inserting after paragraph (6) the following
new paragraph:
``(7) to effect an attachment on a regulated entity or
regulated entity-affiliated party subject to an order under
this section or section 1372; and''.
SEC. 352. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.
Section 1372 of the Housing and Community Development Act of 1992
(12 U.S.C. 4632) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Grounds for Issuance.--Whenever the Director determines that
the violation or threatened violation or the unsafe or unsound practice
or practices specified in the notice of charges served upon the
regulated entity or any regulated entity-affiliated party pursuant to
section 1371(a), or the continuation thereof, is likely to cause
insolvency or significant dissipation of assets or earnings of the
regulated entity, or is likely to weaken the condition of the regulated
entity prior to the completion of the proceedings conducted pursuant to
sections 1371 and 1373, the Director may issue a temporary order
requiring the regulated entity or such party to cease and desist from
any such violation or practice and to take affirmative action to
prevent or remedy such insolvency, dissipation, condition, or prejudice
pending completion of such proceedings. Such order may include any
requirement authorized under section 1371(d).'';
(2) in subsection (b), by striking ``enterprise, executive
officer, or director'' and inserting ``regulated entity or
regulated entity-affiliated party'';
(3) in subsection (d)--
(A) by striking ``An enterprise, executive officer,
or director'' and inserting ``A regulated entity or
regulated entity-affiliated party''; and
(B) by striking ``the enterprise, executive
officer, or director'' and inserting ``the regulated
entity or regulated entity-affiliated party''; and
(4) by striking subsection (e) and in inserting the
following new subsection:
``(e) Enforcement.--In the case of violation or threatened
violation of, or failure to obey, a temporary cease-and-desist order
issued pursuant to this section, the Director may apply to the United
States District Court for the District of Columbia or the United States
district court within the jurisdiction of which the headquarters of the
regulated entity is located, for an injunction to enforce such order,
and, if the court determines that there has been such violation or
threatened violation or failure to obey, it shall be the duty of the
court to issue such injunction.''.
SEC. 353. PREJUDGMENT ATTACHMENT.
The Housing and Community Development Act of 1992 is amended by
inserting after section 1375 (12 U.S.C. 4635) the following new
section:
``SEC. 1375A. PREJUDGMENT ATTACHMENT.
``(a) In General.--In any action brought pursuant to this title, or
in actions brought in aid of, or to enforce an order in, any
administrative or other civil action for money damages, restitution, or
civil money penalties brought pursuant to this title, the court may,
upon application of the Director or Attorney General, as applicable,
issue a restraining order that--
``(1) prohibits any person subject to the proceeding from
withdrawing, transferring, removing, dissipating, or disposing
of any funds, assets or other property; and
``(2) appoints a person on a temporary basis to administer
the restraining order.
``(b) Standard.--
``(1) Showing.--Rule 65 of the Federal Rules of Civil
Procedure shall apply with respect to any proceeding under
subsection (a) without regard to the requirement of such rule
that the applicant show that the injury, loss, or damage is
irreparable and immediate.
``(2) State proceeding.--If, in the case of any proceeding
in a State court, the court determines that rules of civil
procedure available under the laws of such State provide
substantially similar protections to a party's right to due
process as Rule 65 (as modified with respect to such proceeding
by paragraph (1)), the relief sought under subsection (a) may
be requested under the laws of such State.''.
SEC. 354. ENFORCEMENT AND JURISDICTION.
Section 1375 of the Housing and Community Development Act of 1992
(12 U.S.C. 4635) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Enforcement.--The Director may, in the discretion of the
Director, apply to the United States District Court for the District of
Columbia, or the United States district court within the jurisdiction
of which the headquarters of the regulated entity is located, for the
enforcement of any effective and outstanding notice or order issued
under this subtitle or subtitle B, or request that the Attorney General
of the United States bring such an action. Such court shall have
jurisdiction and power to order and require compliance with such notice
or order.''; and
(2) in subsection (b), by striking ``or 1376'' and
inserting ``1376, or 1377''.
SEC. 355. CIVIL MONEY PENALTIES.
Section 1376 of the Housing and Community Development Act of 1992
(12 U.S.C. 4636) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1), by
striking ``, or any executive officer or director'' and
inserting ``or any regulated-entity affiliated party'';
and
(B) in paragraph (1)--
(i) by striking ``the Federal National
Mortgage Association Charter Act, the Federal
Home Loan Mortgage Corporation Act'' and
inserting ``any provision of any of the
authorizing statutes'';
(ii) by striking ``or Act'' and inserting
``or statute'';
(iii) by striking ``or subsection'' and
inserting ``, subsection''; and
(iv) by inserting ``, or paragraph (5) or
(12) of section 10(j) of the Federal Home Loan
Bank Act'' before the semicolon at the end;
(2) by striking subsection (b) and inserting the following
new subsection:
``(b) Amount of Penalty.--
``(1) First tier.--Any regulated entity which, or any
regulated entity-affiliated party who--
``(A) violates any provision of this title, any
provision of any of the authorizing statutes, or any
order, condition, rule, or regulation under any such
title or statute, except that the Director may not,
pursuant to this section, enforce compliance with any
housing goal established under subpart B of part 2 of
subtitle A of this title, with section 1336 or 1337 of
this title, with subsection (m) or (n) of section 309
of the Federal National Mortgage Association Charter
Act (12 U.S.C. 1723a(m), (n)), with subsection (e) or
(f) of section 307 of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1456(e), (f)), or with
paragraph (5) or (12) of section 10(j) of the Federal
Home Loan Bank Act;
``(B) violates any final or temporary order or
notice issued pursuant to this title;
``(C) violates any condition imposed in writing by
the Director in connection with the grant of any
application or other request by such regulated entity;
or
``(D) violates any written agreement between the
regulated entity and the Director,
shall forfeit and pay a civil money penalty of not more than
$10,000 for each day during which such violation continues.
``(2) Second tier.--Notwithstanding paragraph (1)--
``(A) if a regulated entity, or a regulated entity-
affiliated party--
``(i) commits any violation described in
any subparagraph of paragraph (1);
``(ii) recklessly engages in an unsafe or
unsound practice in conducting the affairs of
such regulated entity; or
``(iii) breaches any fiduciary duty; and
``(B) the violation, practice, or breach--
``(i) is part of a pattern of misconduct;
``(ii) causes or is likely to cause more
than a minimal loss to such regulated entity;
or
``(iii) results in pecuniary gain or other
benefit to such party,
the regulated entity or regulated entity-affiliated party shall
forfeit and pay a civil penalty of not more than $50,000 for
each day during which such violation, practice, or breach
continues.
``(3) Third tier.--Notwithstanding paragraphs (1) and (2),
any regulated entity which, or any regulated entity-affiliated
party who--
``(A) knowingly--
``(i) commits any violation or engages in
any conduct described in any subparagraph of
paragraph (1);
``(ii) engages in any unsafe or unsound
practice in conducting the affairs of such
regulated entity; or
``(iii) breaches any fiduciary duty; and
``(B) knowingly or recklessly causes a substantial
loss to such regulated entity or a substantial
pecuniary gain or other benefit to such party by reason
of such violation, practice, or breach,
shall forfeit and pay a civil penalty in an amount not to
exceed the applicable maximum amount determined under paragraph
(4) for each day during which such violation, practice, or
breach continues.
``(4) Maximum amounts of penalties for any violation
described in paragraph (3).--The maximum daily amount of any
civil penalty which may be assessed pursuant to paragraph (3)
for any violation, practice, or breach described in such
paragraph is--
``(A) in the case of any person other than a
regulated entity, an amount not to exceed $2,000,000;
and
``(B) in the case of any regulated entity,
$2,000,000.'';
(3) in subsection (c)(1)(B), by striking ``enterprise,
executive officer, or director'' and inserting ``regulated
entity or regulated entity-affiliated party'';
(4) in subsection (d), by striking the first sentence and
inserting the following: ``If a regulated entity or regulated
entity-affiliated party fails to comply with an order of the
Director imposing a civil money penalty under this section,
after the order is no longer subject to review as provided
under subsection (c)(1) and section 1374, the Director may, in
the discretion of the Director, bring an action in the United
States District Court for the District of Columbia, or the
United States district court within the jurisdiction of which
the headquarters of the regulated entity is located, to obtain
a monetary judgment against the regulated entity or regulated
entity affiliated party and such other relief as may be
available, or request that the Attorney General of the United
States bring such an action.''; and
(5) in subsection (g), by striking ``subsection (b)(3)''
and inserting ``this section, unless authorized by the Director
by rule, regulation, or order''.
SEC. 356. REMOVAL AND PROHIBITION AUTHORITY.
(a) In General.--Subtitle C of title XIII of the Housing and
Community Development Act of 1992 is amended--
(1) by redesignating sections 1377, 1378, 1379, 1379A, and
1379B (12 U.S.C. 4637-41) as sections 1379, 1379A, 1379B,
1379C, and 1379D, respectively; and
(2) by inserting after section 1376 (12 U.S.C. 4636) the
following new section:
``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.
``(a) Authority To Issue Order.--Whenever the Director determines
that--
``(1) any regulated entity-affiliated party has, directly
or indirectly--
``(A) violated--
``(i) any law or regulation;
``(ii) any cease-and-desist order which has
become final;
``(iii) any condition imposed in writing by
the Director in connection with the grant of
any application or other request by such
regulated entity; or
``(iv) any written agreement between such
regulated entity and the Director;
``(B) engaged or participated in any unsafe or
unsound practice in connection with any regulated
entity; or
``(C) committed or engaged in any act, omission, or
practice which constitutes a breach of such party's
fiduciary duty;
``(2) by reason of the violation, practice, or breach
described in any subparagraph of paragraph (1)--
``(A) such regulated entity has suffered or will
probably suffer financial loss or other damage; or
``(B) such party has received financial gain or
other benefit by reason of such violation, practice, or
breach; and
``(3) such violation, practice, or breach--
``(A) involves personal dishonesty on the part of
such party; or
``(B) demonstrates willful or continuing disregard
by such party for the safety or soundness of such
regulated entity, the Director may serve upon such
party a written notice of the Director's intention to
remove such party from office or to prohibit any
further participation by such party, in any manner, in
the conduct of the affairs of any regulated entity.
``(b) Suspension Order.--
``(1) Suspension or prohibition authority.--If the Director
serves written notice under subsection (a) to any regulated
entity-affiliated party of the Director's intention to issue an
order under such subsection, the Director may--
``(A) suspend such party from office or prohibit
such party from further participation in any manner in
the conduct of the affairs of the regulated entity, if
the Director--
``(i) determines that such action is
necessary for the protection of the regulated
entity; and
``(ii) serves such party with written
notice of the suspension order; and
``(B) prohibit the regulated entity from releasing
to or on behalf of the regulated entity-affiliated
party any compensation or other payment of money or
other thing of current or potential value in connection
with any resignation, removal, retirement, or other
termination of employment or office of the party.
``(2) Effective period.--Any suspension order issued under
this subsection--
``(A) shall become effective upon service; and
``(B) unless a court issues a stay of such order
under subsection (g) of this section, shall remain in
effect and enforceable until--
``(i) the date the Director dismisses the
charges contained in the notice served under
subsection (a) with respect to such party; or
``(ii) the effective date of an order
issued by the Director to such party under
subsection (a).
``(3) Copy of order.--If the Director issues a suspension
order under this subsection to any regulated entity-affiliated
party, the Director shall serve a copy of such order on any
regulated entity with which such party is affiliated at the
time such order is issued.
``(c) Notice, Hearing, and Order.--A notice of intention to remove
a regulated entity-affiliated party from office or to prohibit such
party from participating in the conduct of the affairs of a regulated
entity shall contain a statement of the facts constituting grounds for
such action, and shall fix a time and place at which a hearing will be
held on such action. Such hearing shall be fixed for a date not earlier
than 30 days nor later than 60 days after the date of service of such
notice, unless an earlier or a later date is set by the Director at the
request of (1) such party, and for good cause shown, or (2) the
Attorney General of the United States. Unless such party shall appear
at the hearing in person or by a duly authorized representative, such
party shall be deemed to have consented to the issuance of an order of
such removal or prohibition. In the event of such consent, or if upon
the record made at any such hearing the Director shall find that any of
the grounds specified in such notice have been established, the
Director may issue such orders of suspension or removal from office, or
prohibition from participation in the conduct of the affairs of the
regulated entity, as it may deem appropriate, together with an order
prohibiting compensation described in subsection (b)(1)(B). Any such
order shall become effective at the expiration of 30 days after service
upon such regulated entity and such party (except in the case of an
order issued upon consent, which shall become effective at the time
specified therein). Such order shall remain effective and enforceable
except to such extent as it is stayed, modified, terminated, or set
aside by action of the Director or a reviewing court.
``(d) Prohibition of Certain Specific Activities.--Any person
subject to an order issued under this section shall not--
``(1) participate in any manner in the conduct of the
affairs of any regulated entity;
``(2) solicit, procure, transfer, attempt to transfer,
vote, or attempt to vote any proxy, consent, or authorization
with respect to any voting rights in any regulated entity;
``(3) violate any voting agreement previously approved by
the Director; or
``(4) vote for a director, or serve or act as a regulated
entity-affiliated party.
``(e) Industry-Wide Prohibition.--
``(1) In general.--Except as provided in paragraph (2), any
person who, pursuant to an order issued under this section, has
been removed or suspended from office in a regulated entity or
prohibited from participating in the conduct of the affairs of
a regulated entity may not, while such order is in effect,
continue or commence to hold any office in, or participate in
any manner in the conduct of the affairs of, any regulated
entity.
``(2) Exception if director provides written consent.--If,
on or after the date an order is issued under this section
which removes or suspends from office any regulated entity-
affiliated party or prohibits such party from participating in
the conduct of the affairs of a regulated entity, such party
receives the written consent of the Director, the order shall,
to the extent of such consent, cease to apply to such party
with respect to the regulated entity described in the written
consent. If the Director grants such a written consent, it
shall publicly disclose such consent.
``(3) Violation of paragraph (1) treated as violation of
order.--Any violation of paragraph (1) by any person who is
subject to an order described in such subsection shall be
treated as a violation of the order.
``(f) Applicability.--This section shall only apply to a person who
is an individual, unless the Director specifically finds that it should
apply to a corporation, firm, or other business enterprise.
``(g) Stay of Suspension and Prohibition of Regulated Entity-
Affiliated Party.--Within 10 days after any regulated entity-affiliated
party has been suspended from office and/or prohibited from
participation in the conduct of the affairs of a regulated entity under
this section, such party may apply to the United States District Court
for the District of Columbia, or the United States district court for
the judicial district in which the headquarters of the regulated entity
is located, for a stay of such suspension and/or prohibition and any
prohibition under subsection (b)(1)(B) pending the completion of the
administrative proceedings pursuant to the notice served upon such
party under this section, and such court shall have jurisdiction to
stay such suspension and/or prohibition.
``(h) Suspension or Removal of Regulated Entity-Affiliated Party
Charged With Felony.--
``(1) Suspension or prohibition.--
``(A) In general.--Whenever any regulated entity-
affiliated party is charged in any information,
indictment, or complaint, with the commission of or
participation in a crime involving dishonesty or breach
of trust which is punishable by imprisonment for a term
exceeding one year under State or Federal law, the
Director may, if continued service or participation by
such party may pose a threat to the regulated entity or
impair public confidence in the regulated entity, by
written notice served upon such party--
``(i) suspend such party from office or
prohibit such party from further participation
in any manner in the conduct of the affairs of
any regulated entity; and
``(ii) prohibit the regulated entity from
releasing to or on behalf of the regulated
entity-affiliated party any compensation or
other payment of money or other thing of
current or potential value in connection with
the period of any such suspension or with any
resignation, removal, retirement, or other
termination of employment or office of the
party.
``(B) Provisions applicable to notice.--
``(i) Copy.--A copy of any notice under
paragraph (1)(A) shall also be served upon the
regulated entity.
``(ii) Effective period.--A suspension or
prohibition under subparagraph (A) shall remain
in effect until the information, indictment, or
complaint referred to in such subparagraph is
finally disposed of or until terminated by the
Director.
``(2) Removal or prohibition.--
``(A) In general.--If a judgment of conviction or
an agreement to enter a pretrial diversion or other
similar program is entered against a regulated entity-
affiliated party in connection with a crime described
in paragraph (1)(A), at such time as such judgment is
not subject to further appellate review, the Director
may, if continued service or participation by such
party may pose a threat to the regulated entity or
impair public confidence in the regulated entity, issue
and serve upon such party an order that--
``(i) removes such party from office or
prohibits such party from further participation
in any manner in the conduct of the affairs of
the regulated entity without the prior written
consent of the Director; and
``(ii) prohibits the regulated entity from
releasing to or on behalf of the regulated
entity-affiliated party any compensation or
other payment of money or other thing of
current or potential value in connection with
the termination of employment or office of the
party.
``(B) Provisions applicable to order.--
``(i) Copy.--A copy of any order under
paragraph (2)(A) shall also be served upon the
regulated entity, whereupon the regulated
entity-affiliated party who is subject to the
order (if a director or an officer) shall cease
to be a director or officer of such regulated
entity.
``(ii) Effect of acquittal.--A finding of
not guilty or other disposition of the charge
shall not preclude the Director from
instituting proceedings after such finding or
disposition to remove such party from office or
to prohibit further participation in regulated
entity affairs, and to prohibit compensation or
other payment of money or other thing of
current or potential value in connection with
any resignation, removal, retirement, or other
termination of employment or office of the
party, pursuant to subsections (a), (d), or (e)
of this section.
``(iii) Effective period.--Any notice of
suspension or order of removal issued under
this subsection shall remain effective and
outstanding until the completion of any hearing
or appeal authorized under paragraph (4) unless
terminated by the Director.
``(3) Authority of remaining board members.--If at any
time, because of the suspension of one or more directors
pursuant to this section, there shall be on the board of
directors of a regulated entity less than a quorum of directors
not so suspended, all powers and functions vested in or
exercisable by such board shall vest in and be exercisable by
the director or directors on the board not so suspended, until
such time as there shall be a quorum of the board of directors.
In the event all of the directors of a regulated entity are
suspended pursuant to this section, the Director shall appoint
persons to serve temporarily as directors in their place and
stead pending the termination of such suspensions, or until
such time as those who have been suspended cease to be
directors of the regulated entity and their respective
successors take office.
``(4) Hearing regarding continued participation.--Within 30
days from service of any notice of suspension or order of
removal issued pursuant to paragraph (1) or (2) of this
subsection, the regulated entity-affiliated party concerned may
request in writing an opportunity to appear before the Director
to show that the continued service to or participation in the
conduct of the affairs of the regulated entity by such party
does not, or is not likely to, pose a threat to the interests
of the regulated entity or threaten to impair public confidence
in the regulated entity. Upon receipt of any such request, the
Director shall fix a time (not more than 30 days after receipt
of such request, unless extended at the request of such party)
and place at which such party may appear, personally or through
counsel, before one or more members of the Director or
designated employees of the Director to submit written
materials (or, at the discretion of the Director, oral
testimony) and oral argument. Within 60 days of such hearing,
the Director shall notify such party whether the suspension or
prohibition from participation in any manner in the conduct of
the affairs of the regulated entity will be continued,
terminated, or otherwise modified, or whether the order
removing such party from office or prohibiting such party from
further participation in any manner in the conduct of the
affairs of the regulated entity, and prohibiting compensation
in connection with termination will be rescinded or otherwise
modified. Such notification shall contain a statement of the
basis for the Director's decision, if adverse to such party.
The Director is authorized to prescribe such rules as may be
necessary to effectuate the purposes of this subsection.
``(i) Hearings and Judicial Review.--
``(1) Venue and procedure.--Any hearing provided for in
this section shall be held in the District of Columbia or in
the Federal judicial district in which the headquarters of the
regulated entity is located, unless the party afforded the
hearing consents to another place, and shall be conducted in
accordance with the provisions of chapter 5 of title 5, United
States Code. After such hearing, and within 90 days after the
Director has notified the parties that the case has been
submitted to it for final decision, it shall render its
decision (which shall include findings of fact upon which its
decision is predicated) and shall issue and serve upon each
party to the proceeding an order or orders consistent with the
provisions of this section. Judicial review of any such order
shall be exclusively as provided in this subsection. Unless a
petition for review is timely filed in a court of appeals of
the United States, as provided in paragraph (2), and thereafter
until the record in the proceeding has been filed as so
provided, the Director may at any time, upon such notice and in
such manner as it shall deem proper, modify, terminate, or set
aside any such order. Upon such filing of the record, the
Director may modify, terminate, or set aside any such order
with permission of the court.
``(2) Review of order.--Any party to any proceeding under
paragraph (1) may obtain a review of any order served pursuant
to paragraph (1) (other than an order issued with the consent
of the regulated entity or the regulated entity-affiliated
party concerned, or an order issued under subsection (h) of
this section) by the filing in the United States Court of
Appeals for the District of Columbia Circuit or court of
appeals of the United States for the circuit in which the
headquarters of the regulated entity is located, within 30 days
after the date of service of such order, a written petition
praying that the order of the Director be modified, terminated,
or set aside. A copy of such petition shall be forthwith
transmitted by the clerk of the court to the Director, and
thereupon the Director shall file in the court the record in
the proceeding, as provided in section 2112 of title 28, United
States Code. Upon the filing of such petition, such court shall
have jurisdiction, which upon the filing of the record shall
(except as provided in the last sentence of paragraph (1)) be
exclusive, to affirm, modify, terminate, or set aside, in whole
or in part, the order of the Director. Review of such
proceedings shall be had as provided in chapter 7 of title 5,
United States Code. The judgment and decree of the court shall
be final, except that the same shall be subject to review by
the Supreme Court upon certiorari, as provided in section 1254
of title 28, United States Code.
``(3) Proceedings not treated as stay.--The commencement of
proceedings for judicial review under paragraph (2) shall not,
unless specifically ordered by the court, operate as a stay of
any order issued by the Director.''.
(b) Conforming Amendments.--
(1) 1992 act.--Section 1317(f) of the Housing and Community
Development Act of 1992 (12 U.S.C. 4517(f)) is amended by
striking ``section 1379B'' and inserting ``section 1379D''.
(2) Fannie mae charter act.--The second sentence of
subsection (b) of section 308 of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1723(b)) is amended by
striking ``The'' and inserting ``Except to the extent that
action under section 1377 of the Housing and Community
Development Act of 1992 temporarily results in a lesser number,
the''.
(3) Freddie mac act.--The second sentence of subparagraph
(A) of section 303(a)(2) of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1452(a)(2)(A)) is amended by
striking ``The'' and inserting ``Except to the extent that
action under section 1377 of the Housing and Community
Development Act of 1992 temporarily results in a lesser number,
the''.
SEC. 357. CRIMINAL PENALTY.
Subtitle C of title XIII of the Housing and Community Development
Act of 1992 (12 U.S.C. 4631 et seq.) is amended by inserting after
section 1377 (as added by the preceding provisions of this title) the
following new section:
``SEC. 1378. CRIMINAL PENALTY.
``Whoever, being subject to an order in effect under section 1377,
without the prior written approval of the Director, knowingly
participates, directly or indirectly, in any manner (including by
engaging in an activity specifically prohibited in such an order) in
the conduct of the affairs of any regulated entity shall be fined not
more than $1,000,000, imprisoned for not more than 5 years, or both.''.
SEC. 358. SUBPOENA AUTHORITY.
Section 1379D(c) of the Housing and Community Development Act of
1992 (12 U.S.C. 4641(c)), as so redesignated by section 356(a)(1) of
this title, is further amended--
(1) by striking ``request the Attorney General of the
United States to'' and inserting ``, in the discretion of the
Director,'';
(2) by inserting ``or request that the Attorney General of
the United States bring such an action,'' after ``District of
Columbia,''; and
(3) by striking ``or may, under the direction and control
of the Attorney General, bring such an action''.
SEC. 359. CONFORMING AMENDMENTS.
Subtitle C of title XIII of the Housing and Community Development
Act of 1992 (12 U.S.C. 4631 et seq.), as amended by the preceding
provisions of this title, is amended--
(1) in section 1372(c)(1) (12 U.S.C. 4632(c)), by striking
``that enterprise'' and inserting ``that regulated entity'';
(2) in section 1379 (12 U.S.C. 4637), as so redesignated by
section 356(a)(1) of this title--
(A) by inserting ``, or of a regulated entity-
affiliated party,'' before ``shall not affect''; and
(B) by striking ``such director or executive
officer'' each place such term appears and inserting
``such director, executive officer, or regulated
entity-affiliated party'';
(3) in section 1379A (12 U.S.C. 4638), as so redesignated
by section 356(a)(1) of this title, by inserting ``or against a
regulated entity-affiliated party,'' before ``or impair'';
(4) by striking ``An enterprise'' each place such term
appears in such subtitle and inserting ``A regulated entity'';
(5) by striking ``an enterprise'' each place such term
appears in such subtitle and inserting ``a regulated entity'';
(6) by striking ``the enterprise'' each place such term
appears in such subtitle and inserting ``the regulated
entity''; and
(7) by striking ``any enterprise'' each place such term
appears in such subtitle and inserting ``any regulated
entity''.
CHAPTER 5--GENERAL PROVISIONS
SEC. 361. BOARDS OF ENTERPRISES.
(a) Fannie Mae.--
(1) In general.--Section 308(b) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1723(b)) is
amended--
(A) in the first sentence, by striking ``eighteen
persons, five of whom shall be appointed annually by
the President of the United States, and the remainder
of whom'' and inserting ``13 persons, or such other
number that the Director determines appropriate, who'';
(B) in the second sentence, by striking ``appointed
by the President'';
(C) in the third sentence--
(i) by striking ``appointed or''; and
(ii) by striking ``, except that any such
appointed member may be removed from office by
the President for good cause'';
(D) in the fourth sentence, by striking
``elective''; and
(E) by striking the fifth sentence.
(2) Transitional provision.--The amendments made by
paragraph (1) shall not apply to any appointed position of the
board of directors of the Federal National Mortgage Association
until the expiration of the annual term for such position
during which the effective date under section 365 occurs.
(b) Freddie Mac.--
(1) In general.--Section 303(a)(2) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1452(a)(2)) is amended--
(A) in subparagraph (A)--
(i) in the first sentence, by striking ``18
persons, 5 of whom shall be appointed annually
by the President of the United States and the
remainder of whom'' and inserting ``13 persons,
or such other number as the Director determines
appropriate, who''; and
(ii) in the second sentence, by striking
``appointed by the President of the United
States'';
(B) in subparagraph (B)--
(i) by striking ``such or''; and
(ii) by striking ``, except that any
appointed member may be removed from office by
the President for good cause''; and
(C) in subparagraph (C)--
(i) by striking the first sentence; and
(ii) by striking ``elective''.
(2) Transitional provision.--The amendments made by
paragraph (1) shall not apply to any appointed position of the
board of directors of the Federal Home Loan Mortgage
Corporation until the expiration of the annual term for such
position during which the effective date under section 365
occurs.
SEC. 362. REPORT ON PORTFOLIO OPERATIONS, SAFETY AND SOUNDNESS, AND
MISSION OF ENTERPRISES.
Not later than the expiration of the 12-month period beginning on
the effective date under section 365, the Director of the Federal
Housing Finance Agency shall submit a report to the Congress which
shall include--
(1) a description of the portfolio holdings of the
enterprises (as such term is defined in section 1303 of the
Housing and Community Development Act of 1992 (12 U.S.C. 4502)
in mortgages (including whole loans and mortgage-backed
securities), non-mortgages, and other assets;
(2) a description of the risk implications for the
enterprises of such holdings and the consequent risk management
undertaken by the enterprises (including the use of derivatives
for hedging purposes), compared with off-balance sheet
liabilities of the enterprises (including mortgage-backed
securities guaranteed by the enterprises);
(3) an analysis of portfolio holdings for safety and
soundness purposes;
(4) an assessment of whether portfolio holdings fulfill the
mission purposes of the enterprises under the Federal National
Mortgage Association Charter Act and the Federal Home Loan
Mortgage Corporation Act; and
(5) an analysis of the potential systemic risk implications
for the enterprises, the housing and capital markets, and the
financial system of portfolio holdings, and whether such
holdings should be limited or reduced over time.
SEC. 363. CONFORMING AND TECHNICAL AMENDMENTS.
(a) 1992 Act.--Title XIII of the Housing and Community Development
Act of 1992 is amended by striking section 1383 (12 U.S.C. 1451 note).
(b) Title 18, United States Code.--Section 1905 of title 18, United
States Code, is amended by striking ``Office of Federal Housing
Enterprise Oversight'' and inserting ``Federal Housing Finance
Agency''.
(c) Flood Disaster Protection Act of 1973.--Section 102(f)(3)(A) of
the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)(3)(A)) is
amended by striking ``Director of the Office of Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development'' and inserting ``Director of the Federal Housing Finance
Agency''.
(d) Department of Housing and Urban Development Act.--Section 5 of
the Department of Housing and Urban Development Act (42 U.S.C. 3534) is
amended by striking subsection (d).
(e) Title 5, United States Code.--
(1) Director's pay rate.--Section 5313 of title 5, United
States Code, is amended by striking the item relating to the
Director of the Office of Federal Housing Enterprise Oversight,
Department of Housing and Urban Development and inserting the
following new item:
``Director of the Federal Housing Finance Agency.''.
(2) Exclusion from senior executive service.--Section
3132(a)(1)(D) of title 5, United States Code, is amended--
(A) by striking ``the Federal Housing Finance
Board,''; and
(B) by striking ``the Office of Federal Housing
Enterprise Oversight of the Department of Housing and
Urban Development'' and inserting ``the Federal Housing
Finance Agency''.
(f) Inspector General Act of 1978.--Section 8G(a)(2) of the
Inspector General Act of 1978 (5 U.S.C. App.) is amended by striking
``Federal Housing Finance Board'' and inserting ``Federal Housing
Finance Agency''.
(g) Federal Deposit Insurance Act.--Section 11(t)(2)(A) of the
Federal Deposit Insurance Act (12 U.S.C.1821(t)(2)(A)) is amended by
adding at the end the following new clause:
``(vii) The Federal Housing Finance
Agency.''.
(h) 1997 Emergency Supplemental Appropriations Act.--Section 10001
of the 1997 Emergency Supplemental Appropriations Act for Recovery From
Natural Disasters, and for Overseas Peacekeeping Efforts, Including
Those In Bosnia (42 U.S.C. 3548) is amended--
(1) by striking ``the Government National Mortgage
Association, and the Office of Federal Housing Enterprise
Oversight'' and inserting ``and the Government National
Mortgage Association''; and
(2) by striking ``, the Government National Mortgage
Association, or the Office of Federal Housing Enterprise
Oversight'' and inserting ``or the Government National Mortgage
Association''.
(i) National Homeownership Trust Act.--Section 302(b)(4) of the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
12851(b)(4)) is amended by striking ``the chairperson of the Federal
Housing Finance Board'' and inserting ``the Director of the Federal
Housing Finance Agency''.
SEC. 364. STUDY OF ALTERNATIVE SECONDARY MARKET SYSTEMS.
(a) In General.--The Director of the Federal Housing Finance
Agency, in consultation with the Board of Governors of the Federal
Reserve System, the Secretary of the Treasury, and the Secretary of
Housing and Urban Development, shall conduct a comprehensive study of
the effects on financial and housing finance markets of alternatives to
the current secondary market system for housing finance, taking into
consideration changes in the structure of financial and housing finance
markets and institutions since the creation of the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation.
(b) Contents.--The study under this section shall--
(1) include, among the alternatives to the current
secondary market system analyzed--
(A) repeal of the chartering Acts for the Federal
National Mortgage Association and the Federal Home Loan
Mortgage Corporation;
(B) establishing bank-like mechanisms for granting
new charters for limited purposed mortgage
securitization entities;
(C) permitting the Director of the Federal Housing
Finance Agency to grant new charters for limited
purpose mortgage securitization entities, which shall
include analyzing the terms on which such charters
should be granted, including whether such charters
should be sold, or whether such charters and the
charters for the Federal National Mortgage Association
and the Federal Home Loan Mortgage Corporation should
be taxed or otherwise assessed a monetary price; and
(D) such other alternatives as the Director
considers appropriate;
(2) examine all of the issues involved in making the
transition to a completely private secondary mortgage market
system;
(3) examine the technological advancements the private
sector has made in providing liquidity in the secondary
mortgage market and how such advancements have affected
liquidity in the secondary mortgage market; and
(4) examine how taxpayers would be impacted by each
alternative system, including the complete privatization of the
Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation.
(c) Report.--The Director of the Federal Housing Finance Agency
shall submit a report to the Congress on the study not later than the
expiration of the 24-month period beginning on the effective date under
section 365.
SEC. 365. EFFECTIVE DATE.
Except as specifically provided otherwise in this subtitle, this
subtitle shall take effect on and the amendments made by this subtitle
shall take effect on, and shall apply beginning on, the expiration of
the 6-month period beginning on the date of the enactment of this Act.
Subtitle B--Federal Home Loan Banks
SEC. 371. DEFINITIONS.
Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 1422) is
amended--
(1) by striking paragraphs (1), (10), and (11);
(2) by redesignating paragraphs (2) through (9) as
paragraphs (1) through (8), respectively;
(3) by redesignating paragraphs (12) and (13) as paragraphs
(9) and (10), respectively; and
(4) by adding at the end the following:
``(11) Director.--The term `Director' means the Director of
the Federal Housing Finance Agency.
``(12) Agency.--The term `Agency' means the Federal Housing
Finance Agency.''.
SEC. 372. DIRECTORS.
(a) Election.--Section 7 of the Federal Home Loan Bank Act (12
U.S.C. 1427) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Number; Election; Qualifications; Conflicts of Interest.--
``(1) In general.--The management of each Federal Home Loan
Bank shall be vested in a board of 13 directors, or such other
number as the Director determines appropriate, each of whom
shall be a citizen of the United States. All directors of a
Bank who are not independent directors pursuant to paragraph
(3) shall be elected by the members.
``(2) Member directors.--A majority of the directors of
each Bank shall be officers or directors of a member of such
Bank that is located in the district in which such Bank is
located.
``(3) Independent directors.--At least two-fifths of the
directors of each Bank shall be independent directors, who
shall be appointed by the Director of the Federal Housing
Finance Agency from a list of individuals recommended by the
Federal Housing Enterprise Board. The Federal Housing
Enterprise Board may recommend individuals who are identified
by the Board's own independent process or included on a list of
individuals recommended by the board of directors of the Bank
involved, which shall be submitted to the Federal Housing
Enterprise Board by such board of directors. The number of
individuals on any such list submitted by a Bank's board of
directors shall be equal to at least two times the number of
independent directorships to be filled. All independent
directors appointed shall meet the following criteria:
``(A) In general.--Each independent director shall
be a bona fide resident of the district in which such
Bank is located.
``(B) Public interest directors.--At least 2 of the
independent directors under this paragraph of each Bank
shall be representatives chosen from organizations with
more than a 2-year history of representing consumer or
community interests on banking services, credit needs,
housing, community development, economic development,
or financial consumer protections.
``(C) Other directors.--
``(i) Qualifications.--Each independent
director that is not a public interest director
under subparagraph (B) shall have demonstrated
knowledge of, or experience in, financial
management, auditing and accounting, risk
management practices, derivatives, project
development, or organizational management, or
such other knowledge or expertise as the
Director may provide by regulation.
``(ii) Consultation with banks.--In
appointing other directors to serve on the
board of a Federal home loan bank, the Director
of the Federal Housing Finance Agency may
consult with each Federal home loan bank about
the knowledge, skills, and expertise needed to
assist the board in better fulfilling its
responsibilities.
``(D) Conflicts of interest.--Notwithstanding
subsection (f)(2), an independent director under this
paragraph of a Bank may not, during such director's
term of office, serve as an officer of any Federal Home
Loan Bank or as a director or officer of any member of
a Bank.
``(E) Community demographics.--In appointing
independent directors of a Bank pursuant to this
paragraph, the Director shall take into consideration
the demographic makeup of the community most served by
the Affordable Housing Program of the Bank pursuant to
section 10(j).'';
(2) in the first sentence of subsection (b), by striking
``elective directorship'' and inserting ``member directorship
established pursuant to subsection (a)(2)'';
(3) in subsection (c)--
(A) by striking ``elective'' each place such term
appears and inserting ``member'', except--
(i) in the second sentence, the second
place such term appears; and
(ii) each place such term appears in the
fifth sentence;
(B) in the first sentence, by inserting after
``less than one'' the following: ``or two, as
determined by the board of directors of the appropriate
Federal home loan bank,''; and
(C) in the second sentence--
(i) by inserting ``(A) except as provided
in clause (B) of this sentence,'' before ``if
at any time''; and
(ii) by inserting before the period at the
end the following: ``, and (B) clause (A) of
this sentence shall not apply to the
directorships of any Federal home loan bank
resulting from the merger of any two or more
such banks''; and
(4) by striking ``elective'' each place such term appears
(except in subsections (c), (e), and (f)).
(b) Terms.--
(1) In general.--Section 7(d) of the Federal Home Loan Bank
Act (12 U.S.C. 1427(d)) is amended--
(A) in the first sentence, by striking ``3 years''
and inserting ``4 years''; and
(B) in the second sentence--
(i) by striking ``Federal Home Loan Bank
System Modernization Act of 1999'' and
inserting ``Federal Housing Finance Reform Act
of 2008''; and
(ii) by striking ``1/3'' and inserting ``1/
4''.
(2) Savings provision.--The amendments made by paragraph
(1) shall not apply to the term of office of any director of a
Federal home loan bank who is serving as of the effective date
of this subtitle under section 381, including any director
elected to fill a vacancy in any such office.
(c) Continued Service of Independent Directors After Expiration of
Term.--Section 7(f)(2) of the Federal Home Loan Bank Act (12 U.S.C.
1427(f)(2)) is amended--
(1) in the second sentence, by striking ``or the term of
such office expires, whichever occurs first'';
(2) by adding at the end the following new sentence: ``An
independent Bank director may continue to serve as a director
after the expiration of the term of such director until a
successor is appointed.'';
(3) in the paragraph heading, by striking ``Appointed'' and
inserting ``Independent''; and
(4) by striking ``appointive'' each place such term appears
and inserting ``independent''.
(d) Conforming Amendments.--Section 7(f)(3) of the Federal Home
Loan Bank Act (12 U.S.C. 1427(f)(3)) is amended--
(1) in the paragraph heading, by striking ``Elected'' and
inserting ``Member''; and
(2) by striking ``elective'' each place such term appears
in the first and third sentences and inserting ``member''.
(e) Compensation.--Subsection (i) of section 7 of the Federal Home
Loan Bank Act (12 U.S.C. 1427(i)) is amended to read as follows:
``(i) Directors' Compensation.--
``(1) In general.--Each Federal home loan bank may pay the
directors on the board of directors for the bank reasonable and
appropriate compensation for the time required of such
directors, and reasonable and appropriate expenses incurred by
such directors, in connection with service on the board of
directors, in accordance with resolutions adopted by the board
of directors and subject to the approval of the Director.
``(2) Annual report by the board.--The Director shall
include, in the annual report submitted to the Congress
pursuant to section 1319B of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992, information
regarding the compensation and expenses paid by the Federal
home loan banks to the directors on the boards of directors of
the banks.''.
(f) Transition Rule.--Any member of the board of directors of a
Federal Home Loan Bank serving as of the effective date under section
381 may continue to serve as a member of such board of directors for
the remainder of the term of such office as provided in section 7 of
the Federal Home Loan Bank Act, as in effect before such effective
date.
SEC. 373. FEDERAL HOUSING FINANCE AGENCY OVERSIGHT OF FEDERAL HOME LOAN
BANKS.
The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), other than
in provisions of that Act added or amended otherwise by this title, is
amended--
(1) by striking sections 2A and 2B (12 U.S.C. 1422a,
1422b);
(2) in section 6 (12 U.S.C. 1426(b)(1))--
(A) in subsection (b)(1), in the matter preceding
subparagraph (A), by striking ``Finance Board
approval'' and inserting ``approval by the Director'';
and
(B) in each of subsections (c)(4)(B) and (d)(2), by
striking ``Finance Board regulations'' each place that
term appears and inserting ``regulations of the
Director'';
(3) in section 8 (12 U.S.C. 1428), in the section heading,
by striking ``by the board'';
(4) in section 10(b) (12 U.S.C. 1430(b)), by striking ``by
formal resolution'';
(5) in section 10 (12 U.S.C. 1430), by adding at the end
the following new subsection:
``(k) Monitoring and Enforcing Compliance With Affordable Housing
and Community Investment Program Requirements.--The requirements under
subsection (i) and (j) that the Banks establish Community Investment
and Affordable Housing Programs, respectively, and contribute to the
Affordable Housing Program, shall be enforceable by the Director with
respect to the Banks in the same manner and to the same extent as the
housing goals under subpart B of part 2 of subtitle A of title XIII of
the Housing and Community Development Act of 1992 (12 U.S.C. 4561 et
seq.) are enforceable under section 1336 of such Act with respect to
the Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation.'';
(6) in section 11 (12 U.S.C. 1431)--
(A) in subsection (b)--
(i) in the first sentence--
(I) by striking ``The Board'' and
inserting ``The Office of Finance, as
agent for the Banks,''; and
(II) by striking ``the Board'' and
inserting ``such Office''; and
(ii) in the second and fourth sentences, by
striking ``the Board'' each place such term
appears and inserting ``the Office of
Finance'';
(B) in subsection (c)--
(i) by striking ``the Board'' the first
place such term appears and inserting ``the
Office of Finance, as agent for the Banks,'';
and
(ii) by striking ``the Board'' the second
place such term appears and inserting ``such
Office''; and
(C) in subsection (f)--
(i) by striking the two commas after
``permit'' and inserting ``or''; and
(ii) by striking the comma after
``require'';
(7) in section 15 (12 U.S.C. 1435), by inserting ``or the
Director'' after ``the Board'';
(8) in section 18 (12 U.S.C. 1438), by striking subsection
(b);
(9) in section 21 (12 U.S.C. 1441)--
(A) in subsection (b)--
(i) in paragraph (5), by striking
``Chairperson of the Federal Housing Finance
Board'' and inserting ``Director''; and
(ii) in the heading for paragraph (8), by
striking ``federal housing finance board'' and
inserting ``director''; and
(B) in subsection (i), in the heading for paragraph
(2), by striking ``Federal housing finance board'' and
inserting ``Director'';
(10) in section 23 (12 U.S.C. 1443), by striking ``Board of
Directors of the Federal Housing Finance Board'' and inserting
``Director'';
(11) by striking ``the Board'' each place such term appears
in such Act (except in section 15 (12 U.S.C. 1435), section
21(f)(2) (12 U.S.C. 1441(f)(2)), subsections (a), (k)(2)(B)(i),
and (n)(6)(C)(ii) of section 21A (12 U.S.C. 1441a), subsections
(f)(2)(C), and (k)(7)(B)(ii) of section 21B (12 U.S.C. 1441b),
and the first two places such term appears in section 22 (12
U.S.C. 1442)) and inserting ``the Director'';
(12) by striking ``The Board'' each place such term appears
in such Act (except in sections 7(e) (12 U.S.C. 1427(e)), and
11(b) (12 U.S.C. 1431(b)) and inserting ``The Director'';
(13) by striking ``the Board's'' each place such term
appears in such Act and inserting ``the Director's'';
(14) by striking ``The Board's'' each place such term
appears in such Act and inserting ``The Director's'';
(15) by striking ``the Finance Board'' each place such term
appears in such Act and inserting ``the Director'';
(16) by striking ``Federal Housing Finance Board'' each
place such term appears and inserting ``Director'';
(17) in section 11(i) (12 U.S.C. 1431(i), by striking ``the
Chairperson of''; and
(18) in section 21(e)(9) (12 U.S.C. 1441(e)(9)), by
striking ``Chairperson of the''.
SEC. 374. JOINT ACTIVITIES OF BANKS.
Section 11 of the Federal Home Loan Bank Act (12 U.S.C. 1431) is
amended by adding at the end the following new subsection:
``(l) Joint Activities.--Subject to the regulation of the Director,
any two or more Federal Home Loan Banks may establish a joint office
for the purpose of performing functions for, or providing services to,
the Banks on a common or collective basis, or may require that the
Office of Finance perform such functions or services, but only if the
Banks are otherwise authorized to perform such functions or services
individually.''.
SEC. 375. SHARING OF INFORMATION BETWEEN FEDERAL HOME LOAN BANKS.
(a) In General.--The Federal Home Loan Bank Act is amended by
inserting after section 20 (12 U.S.C. 1440) the following new section:
``SEC. 20A. SHARING OF INFORMATION BETWEEN FEDERAL HOME LOAN BANKS.
``(a) Regulatory Authority.--The Director shall prescribe such
regulations as may be necessary to ensure that each Federal Home Loan
Bank has access to information that the Bank needs to determine the
nature and extent of its joint and several liability.
``(b) No Waiver of Privilege.--The Director shall not be deemed to
have waived any privilege applicable to any information concerning a
Federal Home Loan Bank by transferring, or permitting the transfer of,
that information to any other Federal Home Loan Bank for the purpose of
enabling the recipient to evaluate the nature and extent of its joint
and several liability.''.
(b) Regulations.--The regulations required under the amendment made
by subsection (a) shall be issued in final form not later than 6 months
after the effective date under section 381 of this title.
SEC. 376. REORGANIZATION OF BANKS AND VOLUNTARY MERGER.
Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 1446) is
amended--
(1) by inserting ``(a) Reorganization.--'' before
``Whenever''; and
(2) by striking ``liquidated or'' each place such phrase
appears;
(3) by striking ``liquidation or''; and
(4) by adding at the end the following new subsection:
``(b) Voluntary Mergers.--Any two or more Banks may, with the
approval of the Director, and the approval of the boards of directors
of the Banks involved, merge. The Director shall promulgate regulations
establishing the conditions and procedures for the consideration and
approval of any such voluntary merger, including the procedures for
Bank member approval.''.
SEC. 377. SECURITIES AND EXCHANGE COMMISSION DISCLOSURE.
(a) In General.--The Federal Home Loan Banks shall be exempt from
compliance with--
(1) sections 13(e), 14(a), 14(c), and 17A of the Securities
Exchange Act of 1934 and related Commission regulations; and
(2) section 15 of that Act and related Securities and
Exchange Commission regulations with respect to transactions in
capital stock of the Banks.
(b) Member Exemption.--The members of the Federal Home Loan Banks
shall be exempt from compliance with sections 13(d), 13(f), 13(g),
14(d), and 16 of the Securities Exchange Act of 1934 and related
Securities and Exchange Commission regulations with respect to their
ownership of, or transactions in, capital stock of the Federal Home
Loan Banks.
(c) Exempted and Government Securities.--
(1) Capital stock.--The capital stock issued by each of the
Federal Home Loan Banks under section 6 of the Federal Home
Loan Bank Act are--
(A) exempted securities within the meaning of
section 3(a)(2) of the Securities Act of 1933; and
(B) ``exempted securities'' within the meaning of
section 3(a)(12)(A) of the Securities Exchange Act of
1934.
(2) Other obligations.--The debentures, bonds, and other
obligations issued under section 11 of the Federal Home Loan
Bank Act are--
(A) exempted securities within the meaning of
section 3(a)(2) of the Securities Act of 1933;
(B) ``government securities'' within the meaning of
section 3(a)(42) of the Securities Exchange Act of
1934;
(C) excluded from the definition of ``government
securities broker'' within section 3(a)(43) of the
Securities Exchange Act of 1934;
(D) excluded from the definition of ``government
securities dealer'' within section 3(a)(44) of the
Securities Exchange Act of 1934; and
(E) ``government securities'' within the meaning of
section 2(a)(16) of the Investment Company Act of 1940.
(d) Exemption From Reporting Requirements.--The Federal Home Loan
Banks shall be exempt from periodic reporting requirements pertaining
to--
(1) the disclosure of related party transactions that occur
in the ordinary course of business of the Banks with their
members; and
(2) the disclosure of unregistered sales of equity
securities.
(e) Tender Offers.--The Securities and Exchange Commission's rules
relating to tender offers shall not apply in connection with
transactions in capital stock of the Federal Home Loan Banks.
(f) Regulations.--In issuing any final regulations to implement
provisions of this section, the Securities and Exchange Commission
shall consider the distinctive characteristics of the Federal Home Loan
Banks when evaluating the accounting treatment with respect to the
payment to Resolution Funding Corporation, the role of the combined
financial statements of the twelve Banks, the accounting classification
of redeemable capital stock, and the accounting treatment related to
the joint and several nature of the obligations of the Banks.
SEC. 378. COMMUNITY FINANCIAL INSTITUTION MEMBERS.
(a) Total Asset Requirement.--Paragraph (10) of section 2 of the
Federal Home Loan Bank Act (12 U.S.C. 1422(10)), as so redesignated by
section 371(3) of this title, is amended by striking ``$500,000,000''
each place such term appears and inserting ``$1,000,000,000''.
(b) Use of Advances for Community Development Activities.--Section
10(a) of the Federal Home Loan Bank Act (12 U.S.C. 1430(a)) is
amended--
(1) in paragraph (2)(B)--
(A) by striking ``and''; and
(B) by inserting ``, and community development
activities'' before the period at the end;
(2) in paragraph (3)(E), by inserting ``or community
development activities'' after ``agriculture,''; and
(3) in paragraph (6)--
(A) by striking ``and''; and
(B) by inserting ``, and `community development
activities''' before ``shall''.
SEC. 379. TECHNICAL AND CONFORMING AMENDMENTS.
(a) Right to Financial Privacy Act of 1978.--Section 1113(o) of the
Right to Financial Privacy Act of 1978 (12 U.S.C. 3413(o)) is amended--
(1) by striking ``Federal Housing Finance Board'' and
inserting ``Federal Housing Finance Agency''; and
(2) by striking ``Federal Housing Finance Board's'' and
inserting ``Federal Housing Finance Agency's''.
(b) Riegle Community Development and Regulatory Improvement Act of
1994.--Section 117(e) of the Riegle Community Development and
Regulatory Improvement Act of 1994 (12 U.S.C. 4716(e)) is amended by
striking ``Federal Housing Finance Board'' and inserting ``Federal
Housing Finance Agency''.
(c) Title 18, United States Code.--Title 18, United States Code, is
amended by striking ``Federal Housing Finance Board'' each place such
term appears in each of sections 212, 657, 1006, 1014, and inserting
``Federal Housing Finance Agency''.
(d) MAHRA Act of 1997.--Section 517(b)(4) of the Multifamily
Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f
note) is amended by striking ``Federal Housing Finance Board'' and
inserting ``Federal Housing Finance Agency''.
(e) Title 44, United States Code.--Section 3502(5) of title 44,
United States Code, is amended by striking ``Federal Housing Finance
Board'' and inserting ``Federal Housing Finance Agency''.
(f) Access to Local TV Act of 2000.--Section 1004(d)(2)(D)(iii) of
the Launching Our Communities' Access to Local Television Act of 2000
(47 U.S.C. 1103(d)(2)(D)(iii)) is amended by striking ``Office of
Federal Housing Enterprise Oversight, the Federal Housing Finance
Board'' and inserting ``Federal Housing Finance Agency''.
(g) Sarbanes-Oxley Act of 2002.--Section 105(b)(5)(B)(ii)(II) of
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(B)(5)(b)(ii)(II)) is
amended by inserting ``and the Director of the Federal Housing Finance
Agency'' after ``Commission,''.
SEC. 380. STUDY OF AFFORDABLE HOUSING PROGRAM USE FOR LONG-TERM CARE
FACILITIES.
The Comptroller General shall conduct a study of the use of
affordable housing programs of the Federal home loan banks under
section 10(j) of the Federal Home Loan Bank Act to determine how and
the extent to which such programs are used to assist long-term care
facilities for low- and moderate-income individuals, and the
effectiveness and adequacy of such assistance in meeting the needs of
affected communities. The study shall examine the applicability of such
use to the affordable housing fund required to be established by the
Director of the Federal Housing Finance Agency pursuant to the
amendment made by section 340 of this title. The Comptroller General
shall submit a report to the Director of the Federal Housing Finance
Agency and the Congress regarding the results of the study not later
than the expiration of the 1-year period beginning on the date of the
enactment of this Act. This section shall take effect on the date of
the enactment of this Act.
SEC. 381. EFFECTIVE DATE.
Except as specifically provided otherwise in this subtitle, this
subtitle shall take effect on and the amendments made by this subtitle
shall take effect on, and shall apply beginning on, the expiration of
the 6-month period beginning on the date of the enactment of this Act.
Subtitle C--Transfer of Functions, Personnel, and Property of Office of
Federal Housing Enterprise Oversight, Federal Housing Finance Board,
and Department of Housing and Urban Development
CHAPTER 1--OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT
SEC. 385. ABOLISHMENT OF OFHEO.
(a) In General.--Effective at the end of the 6-month period
beginning on the date of the enactment of this Act, the Office of
Federal Housing Enterprise Oversight of the Department of Housing and
Urban Development and the positions of the Director and Deputy Director
of such Office are abolished.
(b) Disposition of Affairs.--During the 6-month period beginning on
the date of the enactment of this Act, the Director of the Office of
Federal Housing Enterprise Oversight shall, for the purpose of winding
up the affairs of the Office of Federal Housing Enterprise Oversight
and in addition to carrying out its other responsibilities under law--
(1) manage the employees of such Office and provide for the
payment of the compensation and benefits of any such employee
which accrue before the effective date of the transfer of such
employee pursuant to section 387; and
(2) may take any other action necessary for the purpose of
winding up the affairs of the Office.
(c) Status of Employees Before Transfer.--The amendments made by
subtitle A and the abolishment of the Office of Federal Housing
Enterprise Oversight under subsection (a) of this section may not be
construed to affect the status of any employee of such Office as
employees of an agency of the United States for purposes of any other
provision of law before the effective date of the transfer of any such
employee pursuant to section 387.
(d) Use of Property and Services.--
(1) Property.--The Director of the Federal Housing Finance
Agency may use the property of the Office of Federal Housing
Enterprise Oversight to perform functions which have been
transferred to the Director of the Federal Housing Finance
Agency for such time as is reasonable to facilitate the orderly
transfer of functions transferred pursuant to any other
provision of this title or any amendment made by this title to
any other provision of law.
(2) Agency services.--Any agency, department, or other
instrumentality of the United States, and any successor to any
such agency, department, or instrumentality, which was
providing supporting services to the Office of Federal Housing
Enterprise Oversight before the expiration of the period under
subsection (a) in connection with functions that are
transferred to the Director of the Federal Housing Finance
Agency shall--
(A) continue to provide such services, on a
reimbursable basis, until the transfer of such
functions is complete; and
(B) consult with any such agency to coordinate and
facilitate a prompt and reasonable transition.
(e) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity of any
right, duty, or obligation of the United States, the Director
of the Office of Federal Housing Enterprise Oversight, or any
other person, which--
(A) arises under or pursuant to the title XIII of
the Housing and Community Development Act of 1992, the
Federal National Mortgage Association Charter Act, the
Federal Home Loan Mortgage Corporation Act, or any
other provision of law applicable with respect to such
Office; and
(B) existed on the day before the abolishment under
subsection (a) of this section.
(2) Continuation of suits.--No action or other proceeding
commenced by or against the Director of the Office of Federal
Housing Enterprise Oversight in connection with functions that
are transferred to the Director of the Federal Housing Finance
Agency shall abate by reason of the enactment of this title,
except that the Director of the Federal Housing Finance Agency
shall be substituted for the Director of the Office of Federal
Housing Enterprise Oversight as a party to any such action or
proceeding.
SEC. 386. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.
All regulations, orders, determinations, and resolutions that--
(1) were issued, made, prescribed, or allowed to become
effective by--
(A) the Office of Federal Housing Enterprise
Oversight; or
(B) a court of competent jurisdiction and that
relate to functions transferred by this chapter; and
(2) are in effect on the date of the abolishment under
section 385(a) of this title, shall remain in effect according
to the terms of such regulations, orders, determinations, and
resolutions, and shall be enforceable by or against the
Director of the Federal Housing Finance Agency until modified,
terminated, set aside, or superseded in accordance with
applicable law by such Director, as the case may be, any court
of competent jurisdiction, or operation of law.
SEC. 387. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.
(a) Transfer.--Each employee of the Office of Federal Housing
Enterprise Oversight shall be transferred to the Federal Housing
Finance Agency for employment no later than the date of the abolishment
under section 385(a) of this title and such transfer shall be deemed a
transfer of function for purposes of section 3503 of title 5, United
States Code.
(b) Guaranteed Positions.--Each employee transferred under
subsection (a) shall be guaranteed a position with the same status,
tenure, grade, and pay as that held on the day immediately preceding
the transfer. Each such employee holding a permanent position shall not
be involuntarily separated or reduced in grade or compensation for 12
months after the date of transfer, except for cause or, if the employee
is a temporary employee, separated in accordance with the terms of the
appointment.
(c) Appointment Authority for Excepted Service Employees.--
(1) In general.--In the case of employees occupying
positions in the excepted service, any appointment authority
established pursuant to law or regulations of the Office of
Personnel Management for filling such positions shall be
transferred, subject to paragraph (2).
(2) Decline of transfer.--The Director of the Federal
Housing Finance Agency may decline a transfer of authority
under paragraph (1) (and the employees appointed pursuant
thereto) to the extent that such authority relates to positions
excepted from the competitive service because of their
confidential, policy-making, policy-determining, or policy-
advocating character.
(d) Reorganization.--If the Director of the Federal Housing Finance
Agency determines, after the end of the 1-year period beginning on the
date of the abolishment under section 385(a), that a reorganization of
the combined work force is required, that reorganization shall be
deemed a major reorganization for purposes of affording affected
employees retirement under section 8336(d)(2) or 8414(b)(1)(B) of title
5, United States Code.
(e) Employee Benefit Programs.--Any employee of the Office of
Federal Housing Enterprise Oversight accepting employment with the
Director of the Federal Housing Finance Agency as a result of a
transfer under subsection (a) may retain for 12 months after the date
such transfer occurs membership in any employee benefit program of the
Federal Housing Finance Agency or the Office of Federal Housing
Enterprise Oversight, as applicable, including insurance, to which such
employee belongs on the date of the abolishment under section 385(a)
if--
(1) the employee does not elect to give up the benefit or
membership in the program; and
(2) the benefit or program is continued by the Director of
the Federal Housing Finance Agency,
The difference in the costs between the benefits which would have been
provided by such agency and those provided by this section shall be
paid by the Director of the Federal Housing Finance Agency. If any
employee elects to give up membership in a health insurance program or
the health insurance program is not continued by such Director, the
employee shall be permitted to select an alternate Federal health
insurance program within 30 days of such election or notice, without
regard to any other regularly scheduled open season.
SEC. 388. TRANSFER OF PROPERTY AND FACILITIES.
Upon the abolishment under section 385(a), all property of the
Office of Federal Housing Enterprise Oversight shall transfer to the
Director of the Federal Housing Finance Agency.
CHAPTER 2--FEDERAL HOUSING FINANCE BOARD
SEC. 391. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.
(a) In General.--Effective at the end of the 6-month period
beginning on the date of enactment of this Act, the Federal Housing
Finance Board (in this subtitle referred to as the ``Board'') is
abolished.
(b) Disposition of Affairs.--During the 6-month period beginning on
the date of enactment of this Act, the Board, for the purpose of
winding up the affairs of the Board and in addition to carrying out its
other responsibilities under law--
(1) shall manage the employees of such Board and provide
for the payment of the compensation and benefits of any such
employee which accrue before the effective date of the transfer
of such employee under section 393; and
(2) may take any other action necessary for the purpose of
winding up the affairs of the Board.
(c) Status of Employees Before Transfer.--The amendments made by
subtitles A and B and the abolishment of the Board under subsection (a)
may not be construed to affect the status of any employee of such Board
as employees of an agency of the United States for purposes of any
other provision of law before the effective date of the transfer of any
such employee under section 393.
(d) Use of Property and Services.--
(1) Property.--The Director of the Federal Housing Finance
Agency may use the property of the Board to perform functions
which have been transferred to the Director of the Federal
Housing Finance Agency for such time as is reasonable to
facilitate the orderly transfer of functions transferred under
any other provision of this title or any amendment made by this
title to any other provision of law.
(2) Agency services.--Any agency, department, or other
instrumentality of the United States, and any successor to any
such agency, department, or instrumentality, which was
providing supporting services to the Board before the
expiration of the period under subsection (a) in connection
with functions that are transferred to the Director of the
Federal Housing Finance Agency shall--
(A) continue to provide such services, on a
reimbursable basis, until the transfer of such
functions is complete; and
(B) consult with any such agency to coordinate and
facilitate a prompt and reasonable transition.
(e) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity of any
right, duty, or obligation of the United States, a member of
the Board, or any other person, which--
(A) arises under the Federal Home Loan Bank Act or
any other provision of law applicable with respect to
such Board; and
(B) existed on the day before the effective date of
the abolishment under subsection (a).
(2) Continuation of suits.--No action or other proceeding
commenced by or against the Board in connection with functions
that are transferred to the Director of the Federal Housing
Finance Agency shall abate by reason of the enactment of this
title, except that the Director of the Federal Housing Finance
Agency shall be substituted for the Board or any member thereof
as a party to any such action or proceeding.
SEC. 392. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.
(a) In General.--All regulations, orders, determinations, and
resolutions described under subsection (b) shall remain in effect
according to the terms of such regulations, orders, determinations, and
resolutions, and shall be enforceable by or against the Director of the
Federal Housing Finance Agency until modified, terminated, set aside,
or superseded in accordance with applicable law by such Director, any
court of competent jurisdiction, or operation of law.
(b) Applicability.--A regulation, order, determination, or
resolution is described under this subsection if it--
(1) was issued, made, prescribed, or allowed to become
effective by--
(A) the Board; or
(B) a court of competent jurisdiction and relates
to functions transferred by this chapter; and
(2) is in effect on the effective date of the abolishment
under section 391(a).
SEC. 393. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL HOUSING
FINANCE BOARD.
(a) Transfer.--Each employee of the Board shall be transferred to
the Federal Housing Finance Agency for employment not later than the
effective date of the abolishment under section 391(a), and such
transfer shall be deemed a transfer of function for purposes of section
3503 of title 5, United States Code.
(b) Guaranteed Positions.--Each employee transferred under
subsection (a) shall be guaranteed a position with the same status,
tenure, grade, and pay as that held on the day immediately preceding
the transfer. Each such employee holding a permanent position shall not
be involuntarily separated or reduced in grade or compensation for 12
months after the date of transfer, except for cause or, if the employee
is a temporary employee, separated in accordance with the terms of the
appointment.
(c) Appointment Authority for Excepted and Senior Executive Service
Employees.--
(1) In general.--In the case of employees occupying
positions in the excepted service or the Senior Executive
Service, any appointment authority established under law or by
regulations of the Office of Personnel Management for filling
such positions shall be transferred, subject to paragraph (2).
(2) Decline of transfer.--The Director of the Federal
Housing Finance Agency may decline a transfer of authority
under paragraph (1) to the extent that such authority relates
to positions excepted from the competitive service because of
their confidential, policymaking, policy-determining, or
policy-advocating character, and noncareer positions in the
Senior Executive Service (within the meaning of section
3132(a)(7) of title 5, United States Code).
(d) Reorganization.--If the Director of the Federal Housing Finance
Agency determines, after the end of the 1-year period beginning on the
effective date of the abolishment under section 391(a), that a
reorganization of the combined workforce is required, that
reorganization shall be deemed a major reorganization for purposes of
affording affected employees retirement under section 8336(d)(2) or
8414(b)(1)(B) of title 5, United States Code.
(e) Employee Benefit Programs.--
(1) In general.--Any employee of the Board accepting
employment with the Federal Housing Finance Agency as a result
of a transfer under subsection (a) may retain for 12 months
after the date on which such transfer occurs membership in any
employee benefit program of the Federal Housing Finance Agency
or the Board, as applicable, including insurance, to which such
employee belongs on the effective date of the abolishment under
section 391(a) if--
(A) the employee does not elect to give up the
benefit or membership in the program; and
(B) the benefit or program is continued by the
Director of the Federal Housing Finance Agency.
(2) Cost differential.--The difference in the costs between
the benefits which would have been provided by the Board and
those provided by this section shall be paid by the Director of
the Federal Housing Finance Agency. If any employee elects to
give up membership in a health insurance program or the health
insurance program is not continued by such Director, the
employee shall be permitted to select an alternate Federal
health insurance program within 30 days after such election or
notice, without regard to any other regularly scheduled open
season.
SEC. 394. TRANSFER OF PROPERTY AND FACILITIES.
Upon the effective date of the abolishment under section 391(a),
all property of the Board shall transfer to the Director of the Federal
Housing Finance Agency.
CHAPTER 3--DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
SEC. 395. TERMINATION OF ENTERPRISE-RELATED FUNCTIONS.
(a) Termination Date.--For purposes of this chapter, the term
``termination date'' means the date that occurs 6 months after the date
of the enactment of this Act.
(b) Determination of Transferred Functions and Employees.--
(1) In general.--Not later than the expiration of the 3-
month period beginning on the date of the enactment of this
Act, the Secretary, in consultation with the Director of the
Office of Federal Housing Enterprise Oversight, shall
determine--
(A) the functions, duties, and activities of the
Secretary of Housing and Urban Development regarding
oversight or regulation of the enterprises under or
pursuant to the authorizing statutes, title XIII of the
Housing and Community Development Act of 1992, and any
other provisions of law, as in effect before the date
of the enactment of this Act, but not including any
such functions, duties, and activities of the Director
of the Office of Federal Housing Enterprise Oversight
of the Department of Housing and Urban Development and
such Office; and
(B) the employees of the Department of Housing and
Urban Development necessary to perform such functions,
duties, and activities.
(2) Enterprise-related functions.--For purposes of this
chapter, the term ``enterprise-related functions of the
Department'' means the functions, duties, and activities of the
Department of Housing and Urban Development determined under
paragraph (1)(A).
(3) Enterprise-related employees.--For purposes of this
chapter, the term ``enterprise-related employees of the
Department'' means the employees of the Department of Housing
and Urban Development determined under paragraph (1)(B).
(c) Disposition of Affairs.--During the 6-month period beginning on
the date of enactment of this Act, the Secretary of Housing and Urban
Development (in this subtitle referred to as the ``Secretary''), for
the purpose of winding up the affairs of the Secretary regarding the
enterprise-related functions of the Department of Housing and Urban
Development (in this subtitle referred to as the ``Department'') and in
addition to carrying out the Secretary's other responsibilities under
law regarding such functions--
(1) shall manage the enterprise-related employees of the
Department and provide for the payment of the compensation and
benefits of any such employee which accrue before the effective
date of the transfer of any such employee under section 397;
and
(2) may take any other action necessary for the purpose of
winding up the enterprise-related functions of the Department.
(d) Status of Employees Before Transfer.--The amendments made by
subtitles A and B and the termination of the enterprise-related
functions of the Department under subsection (b) may not be construed
to affect the status of any employee of the Department as employees of
an agency of the United States for purposes of any other provision of
law before the effective date of the transfer of any such employee
under section 397.
(e) Use of Property and Services.--
(1) Property.--The Director of the Federal Housing Finance
Agency may use the property of the Secretary to perform
functions which have been transferred to the Director of the
Federal Housing Finance Agency for such time as is reasonable
to facilitate the orderly transfer of functions transferred
under any other provision of this title or any amendment made
by this title to any other provision of law.
(2) Agency services.--Any agency, department, or other
instrumentality of the United States, and any successor to any
such agency, department, or instrumentality, which was
providing supporting services to the Secretary regarding
enterprise-related functions of the Department before the
termination date under subsection (a) in connection with such
functions that are transferred to the Director of the Federal
Housing Finance Agency shall--
(A) continue to provide such services, on a
reimbursable basis, until the transfer of such
functions is complete; and
(B) consult with any such agency to coordinate and
facilitate a prompt and reasonable transition.
(f) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity of any
right, duty, or obligation of the United States, the Secretary,
or any other person, which--
(A) arises under the authorizing statutes, title
XIII of the Housing and Community Development Act of
1992, or any other provision of law applicable with
respect to the Secretary, in connection with the
enterprise-related functions of the Department; and
(B) existed on the day before the termination date
under subsection (a).
(2) Continuation of suits.--No action or other proceeding
commenced by or against the Secretary in connection with the
enterprise-related functions of the Department shall abate by
reason of the enactment of this title, except that the Director
of the Federal Housing Finance Agency shall be substituted for
the Secretary or any member thereof as a party to any such
action or proceeding.
SEC. 396. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.
(a) In General.--All regulations, orders, and determinations
described in subsection (b) shall remain in effect according to the
terms of such regulations, orders, determinations, and resolutions, and
shall be enforceable by or against the Director of the Federal Housing
Finance Agency until modified, terminated, set aside, or superseded in
accordance with applicable law by such Director, any court of competent
jurisdiction, or operation of law.
(b) Applicability.--A regulation, order, or determination is
described under this subsection if it--
(1) was issued, made, prescribed, or allowed to become
effective by--
(A) the Secretary; or
(B) a court of competent jurisdiction and that
relate to the enterprise-related functions of the
Department; and
(2) is in effect on the termination date under section
395(a).
SEC. 397. TRANSFER AND RIGHTS OF EMPLOYEES OF DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT.
(a) Transfer.--
(1) In general.--Except as provided in paragraph (2), each
enterprise-related employee of the Department shall be
transferred to the Federal Housing Finance Agency for
employment not later than the termination date under section
395(a) and such transfer shall be deemed a transfer of function
for purposes of section 3503 of title 5, United States Code.
(2) Authority to decline.--An enterprise-related employee
of the Department may, in the discretion of the employee,
decline transfer under paragraph (1) to a position in the
Federal Housing Finance Agency and shall be guaranteed a
position in the Department with the same status, tenure, grade,
and pay as that held on the day immediately preceding the date
that such declination was made. Each such employee holding a
permanent position shall not be involuntarily separated or
reduced in grade or compensation for 12 months after the date
that the transfer would otherwise have occurred, except for
cause or, if the employee is a temporary employee, separated in
accordance with the terms of the appointment.
(b) Guaranteed Positions.--Each enterprise-related employee of the
Department transferred under subsection (a) shall be guaranteed a
position with the same status, tenure, grade, and pay as that held on
the day immediately preceding the transfer. Each such employee holding
a permanent position shall not be involuntarily separated or reduced in
grade or compensation for 12 months after the date of transfer, except
for cause or, if the employee is a temporary employee, separated in
accordance with the terms of the appointment.
(c) Appointment Authority for Excepted and Senior Executive Service
Employees.--
(1) In general.--In the case of employees occupying
positions in the excepted service or the Senior Executive
Service, any appointment authority established under law or by
regulations of the Office of Personnel Management for filling
such positions shall be transferred, subject to paragraph (2).
(2) Decline of transfer.--The Director of the Federal
Housing Finance Agency may decline a transfer of authority
under paragraph (1) (and the employees appointed pursuant
thereto) to the extent that such authority relates to positions
excepted from the competitive service because of their
confidential, policymaking, policy-determining, or policy-
advocating character, and noncareer positions in the Senior
Executive Service (within the meaning of section 3132(a)(7) of
title 5, United States Code).
(d) Reorganization.--If the Director of the Federal Housing Finance
Agency determines, after the end of the 1-year period beginning on the
termination date under section 395(a), that a reorganization of the
combined workforce is required, that reorganization shall be deemed a
major reorganization for purposes of affording affected employees
retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 5, United
States Code.
(e) Employee Benefit Programs.--
(1) In general.--Any enterprise-related employee of the
Department accepting employment with the Federal Housing
Finance Agency as a result of a transfer under subsection (a)
may retain for 12 months after the date on which such transfer
occurs membership in any employee benefit program of the
Federal Housing Finance Agency or the Department, as
applicable, including insurance, to which such employee belongs
on the termination date under section 395(a) if--
(A) the employee does not elect to give up the
benefit or membership in the program; and
(B) the benefit or program is continued by the
Director of the Federal Housing Finance Agency.
(2) Cost differential.--The difference in the costs between
the benefits which would have been provided by the Department
and those provided by this section shall be paid by the
Director of the Federal Housing Finance Agency. If any employee
elects to give up membership in a health insurance program or
the health insurance program is not continued by such Director,
the employee shall be permitted to select an alternate Federal
health insurance program within 30 days after such election or
notice, without regard to any other regularly scheduled open
season.
SEC. 398. TRANSFER OF APPROPRIATIONS, PROPERTY, AND FACILITIES.
Upon the termination date under section 395(a), all assets,
liabilities, contracts, property, records, and unexpended balances of
appropriations, authorizations, allocations, and other funds employed,
held, used, arising from, available to, or to be made available to the
Department in connection with enterprise-related functions of the
Department shall transfer to the Director of the Federal Housing
Finance Agency. Unexpended funds transferred by this section shall be
used only for the purposes for which the funds were originally
authorized and appropriated.
TITLE IV--EMERGENCY MORTGAGE LOAN MODIFICATION
SEC. 401. SHORT TITLE.
This title may be cited as the ``Emergency Mortgage Loan
Modification Act of 2008''.
SEC. 402. SAFE HARBOR FOR QUALIFIED LOAN MODIFICATIONS OR WORKOUT PLANS
FOR CERTAIN RESIDENTIAL MORTGAGE LOANS.
(a) Standard for Loan Modifications or Workout Plans.--Absent
contractual provisions to the contrary--
(1) the duty to maximize, or to not adversely affect, the
recovery of total proceeds from pooled residential mortgage
loans is owed by a servicer of such pooled loans to the
securitization vehicle for the benefit of all investors and
holders of beneficial interests in the pooled loans, in the
aggregate, and not to any individual party or group of parties;
and
(2) a servicer of pooled residential mortgage loans shall
be deemed to be acting on behalf of the securitization vehicle
in the best interest of all investors and holders of beneficial
interests in the pooled loans, in the aggregate, if for a loan
that is in payment default under the loan agreement or for
which payment default is imminent or reasonably foreseeable,
the loan servicer makes or causes to be made reasonable and
documented efforts to implement a modification or workout plan
or, if such efforts are unsuccessful or such plan would be
infeasible, engages or causes to engage in other loss
mitigation, including accepting a short payment or partial
discharge of principal, or agreeing to a short sale of the
property, to the extent that the servicer reasonably believes
the modification or workout plan or other mitigation actions
will maximize the net present value to be realized on the loan
over that which would be realized through foreclosure.
(b) Safe Harbor.--Absent contractual provisions to the contrary, a
servicer of a residential mortgage loan that acts or causes to act in a
manner consistent with the duty set forth in subsection (a), shall not
be liable for entering into a qualified loan modification or workout
plan, to--
(1) any person, based on that person's ownership of a
residential mortgage loan or any interest in a pool of
residential mortgage loans or in securities that distribute
payments out of the principal, interest and other payments in
loans on the pool;
(2) any person who is obligated to make payments pursuant
to a derivatives instrument determined in reference to any
interest referred to in paragraph (1); or
(3) any person that insures any loan or any interest
referred to in paragraph (1) under any law or regulation of the
United States or any law or regulation of any State or
political subdivision of any State.
(c) Rule of Construction.--No provision of this section shall be
construed as limiting the ability of a servicer to enter into loan
modifications or workout plans other than qualified loan modification
or workout plans.
(d) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Qualified loan modification or workout plan.--The term
``qualified loan modification or workout plan'' means a
modification or plan that--
(A) is scheduled to remain in place until the
borrower sells or refinances the property, or for at
least 5 years from the date of adoption of the plan,
whichever is sooner;
(B) does not provide for a repayment schedule that
results in an increase in the outstanding principal
balance of the loan, including by deferred or unpaid
interest, fees, or other charges; and
(C) does not require the borrower to pay additional
points and fees.
(2) Residential mortgage loan defined.--The term
``residential mortgage loan'' means a loan that is secured by a
lien on an owner-occupied residential dwelling.
(3) Securitization vehicle.--The term ``securitization
vehicle'' means a trust, corporation, partnership, limited
liability entity, special purpose entity, or other structure
that--
(A) is the issuer, or is created by the issuer, of
mortgage pass-through certificates, participation
certificates, mortgage-backed securities, or other
similar securities backed by a pool of assets that
includes residential mortgage loans; and
(B) holds such loans.
(e) Effective Period.--This section shall apply only with respect
to qualified loan modification or workout plans initiated prior to
January 1, 2011.
TITLE V--OTHER HOUSING PROVISIONS
SEC. 501. DEPOSITORY INSTITUTION COMMUNITY DEVELOPMENT INVESTMENTS
ENHANCEMENT.
(a) Technical Corrections.--
(1) National banks.--The first sentence of the paragraph
designated as the ``Eleventh'' of section 5136 of the Revised
Statutes of the United States (12 U.S.C. 24) (as amended by
section 305(a) of the Financial Services Regulatory Relief Act
of 2006) is amended by striking ``promotes the public welfare
by benefitting primarily'' and inserting ``is designed
primarily to promote the public welfare, including the welfare
of''.
(2) State member banks.--The first sentence of the 23rd
undesignated paragraph of section 9 of the Federal Reserve Act
(12 U.S.C. 338a) (as amended by section 305(b) of the Financial
Services Regulatory Relief Act of 2006) is amended by striking
``promotes the public welfare by benefitting primarily'' and
inserting ``is designed primarily to promote the public
welfare, including the welfare of''.
(b) Investments by Federal Savings Associations Authorized to
Promote the Public Welfare.--
(1) In general.--Section 5(c)(3) of the Home Owners' Loan
Act (12 U.S.C. 1464(c)) is amended by adding at the end the
following new subparagraph:
``(D) Direct investments to promote the public
welfare.--
``(i) In general.--A Federal savings
association may make investments, directly or
indirectly, each of which is designed primarily
to promote the public welfare, including the
welfare of low- and moderate-income communities
or families through the provision of housing,
services, and jobs.
``(ii) Direct investments or acquisition of
interest in other companies.--Investments under
clause (i) may be made directly or by
purchasing interests in an entity primarily
engaged in making such investments.
``(iii) Prohibition on unlimited
liability.--No investment may be made under
this subparagraph which would subject a Federal
savings association to unlimited liability to
any person.
``(iv) Single investment limitation to be
established by director.--Subject to clauses
(v) and (vi), the Director shall establish, by
order or regulation, limits on--
``(I) the amount any savings
association may invest in any 1
project; and
``(II) the aggregate amount of
investment of any savings association
under this subparagraph.
``(v) Flexible aggregate investment
limitation.--The aggregate amount of
investments of any savings association under
this subparagraph may not exceed an amount
equal to the sum of 5 percent of the savings
association's capital stock actually paid in
and unimpaired and 5 percent of the savings
association's unimpaired surplus, unless--
``(I) the Director determines that
the savings association is adequately
capitalized; and
``(II) the Director determines, by
order, that the aggregate amount of
investments in a higher amount than the
limit under this clause will pose no
significant risk to the affected
deposit insurance fund.
``(vi) Maximum aggregate investment
limitation.--Notwithstanding clause (v), the
aggregate amount of investments of any savings
association under this subparagraph may not
exceed an amount equal to the sum of 15 percent
of the savings association's capital stock
actually paid in and unimpaired and 15 percent
of the savings association's unimpaired
surplus.
``(vii) Investments not subject to other
limitation on quality of investments.--No
obligation a Federal savings association
acquires or retains under this subparagraph
shall be taken into account for purposes of the
limitation contained in section 28(d) of the
Federal Deposit Insurance Act on the
acquisition and retention of any corporate debt
security not of investment grade.
``(viii) Applicability of standards to each
investment.--The standards and limitations of
this subparagraph shall apply to each
investment under this subparagraph made by a
savings association directly and by its
subsidiaries.''.
(2) Technical and conforming amendments.--Section
5(c)(3)(A) of the Home Owners' Loan Act (12 U.S.C.
1464(c)(3)(A)) is amended to read as follows:
``(A) [Repealed]''.
SEC. 502. PRESERVATION OF CERTAIN AFFORDABLE HOUSING DWELLING UNITS.
(a) Conversion of HUD Contracts.--Notwithstanding any other
provision of law, the Secretary of Housing and Urban Development may,
at the request of the owner of the multifamily housing project to which
Section 8 Project Number NY 913 VO 0018 and RAP Contract Number
012035NIRAP are subject, convert such contracts to a contract for
project-based rental assistance under section 8 of the United States
Housing Act of 1937 (42 U.S.C. 1437f).
(b) Initial Renewal.--
(1) Eligibility.--At the request of the owner made no later
than 90 days prior to a conversion, the Secretary may, to the
extent sufficient amounts are made available in appropriation
Acts and notwithstanding any other law, treat the contemplated
resulting contract as if such contract were eligible for
initial renewal under section 524(a) of the Multifamily
Assisted Housing Reform and Affordability Act of 1997 (42
U.S.C. 1437f note).
(2) Request.--A request by the owner pursuant to paragraph
(1) shall be upon such terms and conditions as the Secretary
may require.
(c) Resulting Contract.--The resulting contract shall--
(1) be subject to section 524(a) of MAHRA (42 U.S.C. 1437f
note);
(2) be considered for all purposes a contract that has been
renewed under section 524(a) of MAHRA (42 U.S.C. 1437f note)
for a term not to exceed 20 years;
(3) be subsequently renewable at the request of the owner,
under any renewal option for which the project is eligible
under MAHRA (42 U.S.C. 1437f note);
(4) contain provisions limiting distributions, as the
Secretary determines appropriate, not to exceed 10 percent of
the initial investment of the owner;
(5) be subject to the availability of sufficient amounts in
appropriation Acts; and
(6) be subject to such other terms and conditions as the
Secretary considers appropriate.
(d) Income Targeting.--The owner shall be deemed to be in
compliance with all income-targeting requirements under the United
States Housing Act of 1937 by serving low-income families, as such term
is defined in the section 3(b)(2) of such Act (42 U.S.C. 1437a(b)(2)).
(e) Tenant Eligibility.--Notwithstanding any other provision of
law, each family residing in an assisted dwelling unit on the date of
the conversion under this section, subject to the resulting contract
under subsection (a), shall be considered to meet the applicable
requirements for income eligibility and occupancy.
(f) Definitions.--As used in this section--
(1) the term ``assisted dwelling unit'' means the dwelling
units that, on the date of the conversion under this section,
were subject to Section 8 Project Number NY 913 VO 0018 or RAP
Contract Number 012035NIRAP;
(2) the term ``conversion'' means the action under which
Section 8 Project Number NY 913 VO 0018 and RAP Contract Number
012035NIRAP become a contract for project-based rental
assistance under section 8 of the United States Housing Act of
1937 (42 U.S.C. 1437f) pursuant to subsection (a);
(3) the term ``MAHRA'' means the Multifamily Assisted
Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f
note);
(4) the term ``owner'' means Starrett City Associates or
any successor owner of the multifamily housing project to which
Section 8 Project Number NY 913 VO 0018 and RAP Contract Number
012035NIRAP are subject;
(5) the term ``resulting contract'' means the new contract
after a conversion of Section 8 Project Number NY 913 VO 0018
and RAP Contract Number 012035NIRAP to a contract for project-
based rental assistance under section 8 of the United States
Housing Act of 1937 (42 U.S.C. 1437f) pursuant to subsection
(a); and
(6) the term ``Secretary'' means the Secretary of Housing
and Urban Development.
SEC. 503. ELIGIBILITY OF CERTAIN PROJECTS FOR ENHANCED VOUCHER
ASSISTANCE.
Notwithstanding any other provision of law--
(1) the property known as The Heritage Apartments (FHA No.
023-44804), in Malden, Massachusetts, shall be considered
eligible low-income housing for purposes of the eligibility of
residents of the property for enhanced voucher assistance under
section 8(t) of the United States Housing Act of 1937 (42
U.S.C. 1437f(t)), pursuant to paragraph (2)(A) of section
223(f) of the Low-Income Housing Preservation and Resident
Homeownership Act of 1990 (12 U.S.C. 4113(f)(2)(A));
(2) such residents shall receive enhanced rental housing
vouchers upon the prepayment of the mortgage loan for the
property under section 236 of the National Housing Act (12
U.S.C. 1715z-1); and
(3) the Secretary shall approve such prepayment and
subsequent transfer of the property without any further
condition, except that the property shall be restricted for
occupancy, until the original maturity date of the prepaid
mortgage loan, only by families with incomes not exceeding 80
percent of the adjusted median income for the area in which the
property is located, as published by the Secretary.
Amounts for the enhanced vouchers pursuant to this section shall be
provided under amounts appropriated for tenant-based rental assistance
otherwise authorized under section 8(t) of the United States Housing
Act of 1937.
SEC. 504. TRANSFER OF CERTAIN RENTAL ASSISTANCE CONTRACTS.
(a) Transfer.--Subject to subsection (c) and notwithstanding any
other provision of law, the Secretary of Housing and Urban Development
shall, at the request of the owner, transfer or authorize the transfer,
of the contracts, restrictions, and debt described in subsection (b)--
(1) on the housing that is owned or managed by Community
Properties of Ohio Management Services LLC or an affiliate of
Ohio Capital Corporation for Housing and located in Franklin
County, Ohio, to other properties located in Franklin County,
Ohio; and
(2) on the housing that is owned or managed by The Model
Group, Inc., and located in Hamilton County, Ohio, to other
properties located in Hamilton County, Ohio.
(b) Contracts, Restrictions, and Debt Covered.--The contracts,
restrictions, and debt described in this subsection are as follows:
(1) All or a portion of a project-based rental assistance
housing assistance payments contract under section 8 of the
United States Housing Act of 1937 (42 U.S.C. 1437f).
(2) Existing Federal use restrictions, including without
limitation use agreements, regulatory agreements, and
accommodation agreements.
(3) Any subordinate debt held by the Secretary or assigned
and any mortgages securing such debt, all related loan and
security documentation and obligations, and reserve and escrow
balances.
(c) Retention of Same Number of Units and Amount of Assistance.--
Any transfer pursuant to subsection (a) shall result in--
(1) a total number of dwelling units (including units
retained by the owners and units transferred) covered by
assistance described in subsection (b)(1) after the transfer
remaining the same as such number assisted before the transfer,
with such increases or decreases in unit sizes as may be
contained in a plan approved by a local planning or development
commission or department; and
(2) no reduction in the total amount of the housing
assistance payments under contracts described in subsection
(b)(1).
SEC. 505. PROTECTION AGAINST DISCRIMINATORY TREATMENT.
Section 525 of title 11, the United States Code, is amended by
adding at the end the following:
``(d) A governmental unit that operates a mortgage loan program,
including a loan guarantee or subsidy program, may not deny the
benefits of such program to a disabled veteran (as defined in section
3741(1) of title 38) because he or she is or has been a debtor under
this title, has been insolvent before the commencement of a case under
this title or during the pendency of the case but before being granted
or denied a discharge, or has not paid a debt that is dischargeable in
the case under this title.''.
In the matter proposed to be inserted by the amendment of the
Senate to the text of the bill, strike titles VII, IX, and XI.
(2)In the matter proposed to be inserted by the Senate amendment to the
text of the bill, strike titles VI (relating to tax-related
provisions), VIII (relating to REIT investment diversification and
empowerment), and X (relating to clean energy tax stimulus) and add at
the end the following new title (and conform the table of contents
accordingly):
TITLE VI--REVENUE AND OTHER PROVISIONS
SEC. 600. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this title an
amendment or repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be considered to
be made to a section or other provision of the Internal Revenue Code of
1986.
Subtitle A--Housing Tax Incentives
PART 1--MULTI-FAMILY HOUSING
Subpart A--Low-Income Housing Tax Credit
SEC. 601. TEMPORARY INCREASE IN VOLUME CAP FOR LOW-INCOME HOUSING TAX
CREDIT.
Paragraph (3) of section 42(h) is amended by adding at the end the
following new subparagraph:
``(I) Increase in state housing credit ceiling for
2008 and 2009.--In the case of calendar years 2008 and
2009, the dollar amount in effect under subparagraph
(C)(ii)(I) for such calendar year (after any increase
under subparagraph (H)) shall be increased by $0.20.''.
SEC. 602. DETERMINATION OF CREDIT RATE.
(a) Elimination of Distinction Between New and Existing Buildings;
Minimum Credit Rate for Non-Federally Subsidized Buildings.--
(1) In general.--Subsection (b) section 42 is amended to
read as follows:
``(b) Applicable Percentage.--For purposes of this section--
``(1) In general.--The term `applicable percentage' means,
with respect to any building, the appropriate percentage
prescribed by the Secretary for the earlier of--
``(A) the month in which such building is placed in
service, or
``(B) at the election of the taxpayer--
``(i) the month in which the taxpayer and
the housing credit agency enter into an
agreement with respect to such building (which
is binding on such agency, the taxpayer, and
all successors in interest) as to the housing
credit dollar amount to be allocated to such
building, or
``(ii) in the case of any building to which
subsection (h)(4)(B) applies, the month in
which the tax-exempt obligations are issued.
A month may be elected under clause (ii) only if the election
is made not later than the 5th day after the close of such
month. Such an election, once made, shall be irrevocable.
``(2) Method of prescribing percentages.--
``(A) In general.--For purposes of paragraph (1),
the percentages prescribed by the Secretary for any
month shall be--
``(i) in the case of any building which is
not federally subsidized for the taxable year,
the greater of--
``(I) the average percentage
determined under subclause (II) for
months in the preceding calendar year,
or
``(II) the percentage which will
yield over a 10-year period amounts of
credit under subsection (a) which have
a present value equal to 70 percent of
the qualified basis of such building,
and
``(ii) in the case of any other building,
the percentage which will yield over a 10-year
period amounts of credit under subsection (a)
which have a present value equal to 30 percent
of the qualified basis of such building.
``(B) Method of discounting.--The present value
under subparagraph (A) shall be determined--
``(i) as of the last day of the 1st year of
the 10-year period referred to in subparagraph
(A),
``(ii) by using a discount rate equal to 72
percent of the average of the annual Federal
mid-term rate and the annual Federal long-term
rate applicable under section 1274(d)(1) to the
month applicable under subparagraph (A) and
compounded annually, and
``(iii) by assuming that the credit
allowable under this section for any year is
received on the last day of such year.
``(3) Cross references.--
``(A) For treatment of certain rehabilitation
expenditures as separate buildings, see subsection (e).
``(B) For determination of applicable percentage
for increases in qualified basis after the 1st year of
the credit period, see subsection (f)(3).
``(C) For authority of housing credit agency to
limit applicable percentage and qualified basis which
may be taken into account under this section with
respect to any building, see subsection (h)(7).''.
(2) Conforming amendments.--
(A) Subparagraph (B) of section 42(e)(3) is amended
by striking ``subsection (b)(2)(B)(ii)'' and inserting
``subsection (b)(2)(A)(ii)''.
(B) Subparagraph (A) of section 42(i)(2) is amended
by striking ``new building'' and inserting
``building''.
(b) Modifications to Definition of Federally Subsidized Building.--
(1) In general.--Subparagraph (A) of section 42(i)(2) is
amended by striking ``, or any below market Federal loan,''.
(2) Conforming amendments.--
(A) Subparagraph (B) of section 42(i)(2) is
amended--
(i) by striking ``balance of loan or'' in
the heading thereof,
(ii) by striking ``loan or'' in the matter
preceding clause (i), and
(iii) by striking ``subsection (d)--'' and
all that follows and inserting ``subsection (d)
the proceeds of such obligation.''.
(B) Subparagraph (C) of section 42(i)(2) is
amended--
(i) by striking ``or below market Federal
loan'' in the matter preceding clause (i),
(ii) in clause (i)--
(I) by striking ``or loan (when
issued or made)'' and inserting ``(when
issued)'', and
(II) by striking ``the proceeds of
such obligation or loan'' and inserting
``the proceeds of such obligation'',
and
(iii) by striking ``, and such loan is
repaid,'' in clause (ii).
(C) Paragraph (2) of section 42(i) is amended by
striking subparagraphs (D) and (E).
(c) Effective Date.--The amendments made by this subsection shall
apply to buildings placed in service after the date of the enactment of
this Act.
SEC. 603. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS.
(a) Increase in Credit for Certain State Designated Buildings.--
Subparagraph (C) of section 42(d)(5) (relating to increase in credit
for buildings in high cost areas), before redesignation under
subsection (f), is amended by adding at the end the following new
clause:
``(v) Buildings designated by state housing
credit agency.--Any building which is
designated by the State housing credit agency
as requiring the increase in credit under this
subparagraph in order for such building to be
financially feasible as part of a qualified
low-income housing project shall be treated for
purposes of this subparagraph as located in a
difficult development area which is designated
for purposes of this subparagraph. The
preceding sentence shall not apply to any
building if paragraph (1) of subsection (h)
does not apply to any portion of the eligible
basis of such building by reason of paragraph
(4) of such subsection.''.
(b) Modification to Rehabilitation Requirements.--
(1) In general.--Clause (ii) of section 42(e)(3)(A) is
amended--
(A) by striking ``10 percent'' in subclause (I) and
inserting ``20 percent'', and
(B) by striking ``$3,000'' in subclause (II) and
inserting ``$6,000''.
(2) Inflation adjustment.--Paragraph (3) of section 42(e)
is amended by adding at the end the following new subparagraph:
``(D) Inflation adjustment.--In the case of any
expenditures which are treated under paragraph (4) as
placed in service during any calendar year after 2009,
the $6,000 amount in subparagraph (A)(ii)(II) shall be
increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for such
calendar year by substituting `calendar year
2008' for `calendar year 1992' in subparagraph
(B) thereof.
Any increase under the preceding sentence which is not
a multiple of $100 shall be rounded to the nearest
multiple of $100.''.
(3) Conforming amendment.--Subclause (II) of section
42(f)(5)(B)(ii) is amended by striking ``if subsection
(e)(3)(A)(ii)(II)'' and all that follows and inserting ``if the
dollar amount in effect under subsection (e)(3)(A)(ii)(II) were
two-thirds of such amount.''.
(c) Increase in Allowable Community Service Facility Space for
Small Projects.--Clause (ii) of section 42(d)(4)(C) (relating to
limitation) is amended by striking ``10 percent of the eligible basis
of the qualified low-income housing project of which it is a part. For
purposes of'' and inserting ``the sum of--
``(I) 15 percent of so much of the
eligible basis of the qualified low-
income housing project of which it is a
part as does not exceed $5,000,000,
plus
``(II) 10 percent of so much of the
eligible basis of such project as is
not taken into account under subclause
(I).
For purposes of''.
(d) Clarification of Treatment of Federal Grants.--Subparagraph (A)
of section 42(d)(5) is amended to read as follows:
``(A) Federal grants not taken into account in
determining eligible basis.--The eligible basis of a
building shall not include any costs financed with the
proceeds of a Federally funded grant.''.
(e) Simplification of Related Party Rules.--Clause (iii) of section
42(d)(2)(D), before redesignation under subsection (f)(2), is amended--
(1) by striking all that precedes subclause (II),
(2) by redesignating subclause (II) as clause (iii) and
moving such clause two ems to the left, and
(3) by striking the last sentence thereof.
(f) Repeal of Deadwood.--
(1) Clause (ii) of section 42(d)(2)(B) is amended by
striking ``the later of--'' and all that follows and inserting
``the date the building was last placed in service,''.
(2) Subparagraph (D) of section 42(d)(2) is amended by
striking clause (i) and by redesignating clauses (ii) and (iii)
as clauses (i) and (ii), respectively.
(3) Paragraph (5) of section 42(d) is amended by striking
subparagraph (B) and by redesignating subparagraph (C) as
subparagraph (B).
(g) Effective Date.--The amendments made by this subsection shall
apply to buildings placed in service after the date of the enactment of
this Act.
SEC. 604. OTHER SIMPLIFICATION AND REFORM OF LOW-INCOME HOUSING TAX
INCENTIVES.
(a) Repeal Prohibition on Moderate Rehabilitation Assistance.--
Paragraph (2) of section 42(c) (defining qualified low-income building)
is amended by striking the flush sentence at the end.
(b) Modification of Time Limit for Incurring 10 Percent of
Project's Cost.--Clause (ii) of section 42(h)(1)(E) is amended by
striking ``(as of the later of the date which is 6 months after the
date that the allocation was made or the close of the calendar year in
which the allocation is made)'' and inserting ``(as of the date which
is 1 year after the date that the allocation was made)''.
(c) Repeal of Bonding Requirement on Disposition of Building.--
Paragraph (6) of section 42(j) (relating to no recapture on disposition
of building (or interest therein) where bond posted) is amended to read
as follows:
``(6) No recapture on disposition of building which
continues in qualified use.--
``(A) In general.--The increase in tax under this
subsection shall not apply solely by reason of the
disposition of a building (or an interest therein) if
it is reasonably expected that such building will
continue to be operated as a qualified low-income
building for the remaining compliance period with
respect to such building.
``(B) Statute of limitations.--If a building (or an
interest therein) is disposed of during any taxable
year and there is any reduction in the qualified basis
of such building which results in an increase in tax
under this subsection for such taxable or any
subsequent taxable year, then--
``(i) the statutory period for the
assessment of any deficiency with respect to
such increase in tax shall not expire before
the expiration of 3 years from the date the
Secretary is notified by the taxpayer (in such
manner as the Secretary may prescribe) of such
reduction in qualified basis, and
``(ii) such deficiency may be assessed
before the expiration of such 3-year period
notwithstanding the provisions of any other law
or rule of law which would otherwise prevent
such assessment.''.
(d) Energy Efficiency and Historic Nature Taken Into Account in
Making Allocations.--Subparagraph (C) of section 42(m)(1) (relating to
plans for allocation of credit among projects) is amended by striking
``and'' at the end of clause (vii), by striking the period at the end
of clause (viii) and inserting a comma, and by adding at the end the
following new clauses:
``(ix) the energy efficiency of the
project, and
``(x) the historic nature of the
project.''.
(e) Continued Eligibility for Students Who Received Foster Care
Assistance.--Clause (i) of section 42(i)(3)(D) is amended by striking
``or'' at the end of subclause (I), by redesignating subclause (II) as
subclause (III), and by inserting after subclause (I) the following new
subclause:
``(II) a student who was previously
under the care and placement
responsibility of the State agency
responsible for administering a plan
under part B or part E of title IV of
the Social Security Act, or''.
(f) Treatment of Rural Projects.--Section 42(i) (relating to
definitions and special rules) is amended by adding at the end the
following new paragraph:
``(8) Treatment of rural projects.--For purposes of this
section, in the case of any project for residential rental
property located in a rural area (as defined in section 520 of
the Housing Act of 1949), any income limitation measured by
reference to area median gross income shall be measured by
reference to the greater of area median gross income or
national non-metropolitan median income. The preceding sentence
shall not apply with respect to any building if paragraph (1)
of section 42(h) does not apply by reason of paragraph (4)
thereof to any portion of the credit determined under this
section with respect to such building.''.
(g) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
buildings placed in service after the date of the enactment of
this Act.
(2) Repeal of bonding requirement on disposition of
building.--The amendment made by subsection (c) shall apply
to--
(A) interests in buildings disposed after the date
of the enactment of this Act, and
(B) interests in buildings disposed of on or before
such date if--
(i) it is reasonably expected that such
building will continue to be operated as a
qualified low-income building (within the
meaning of section 42 of the Internal Revenue
Code of 1986) for the remaining compliance
period (within the meaning of such section)
with respect to such building, and
(ii) the taxpayer elects the application of
this subparagraph with respect to such
disposition.
Notwithstanding the preceding sentence, the amendments made by
subsection (c) shall not apply to any disposition after the
date 5 years after the date of the enactment of this Act.
(3) Energy efficiency and historic nature taken into
account in making allocations.--The amendments made by
subsection (d) shall apply to allocations made after December
31, 2008.
(4) Continued eligibility for students who received foster
care assistance.--The amendments made by subsection (e) shall
apply to determinations made after the date of the enactment of
this Act.
(5) Treatment of rural projects.--The amendment made by
subsection (f) shall apply to determinations made after the
date of the enactment of this Act.
Subpart B--Modifications to Tax-Exempt Housing Bond Rules
SEC. 606. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING RESIDENTIAL RENTAL
PROJECTS.
(a) In General.--Subsection (i) of section 146 (relating to
treatment of refunding issues) is amended by adding at the end the
following new paragraph:
``(6) Treatment of certain residential rental project bonds
as refunding bonds irrespective of obligor.--
``(A) In general.--If, during the 6-month period
beginning on the date of a repayment of a loan financed
by an issue 95 percent or more of the net proceeds of
which are used to provide projects described in section
142(d), such repayment is used to provide a new loan
for any project so described, any bond which is issued
to refinance such issue shall be treated as a refunding
issue to the extent the principal amount of such
refunding issue does not exceed the principal amount of
the bonds refunded.
``(B) Limitations.--Subparagraph (A) shall apply to
only one refunding of the original issue and only if--
``(i) the refunding issue is issued not
later than 4 years after the date on which the
original issue was issued,
``(ii) the latest maturity date of any bond
of the refunding issue is not later than 34
years after the date on which the refunded bond
was issued, and
``(iii) the refunding issue is approved in
accordance with section 147(f) before the
issuance of the refunding issue.''.
(b) Low-Income Housing Credit.--Clause (ii) of section 42(h)(4)(A)
is amended by inserting ``or such financing is refunded as described in
section 146(i)(6)'' before the period at the end.
(c) Effective Date.--The amendments made by this section shall
apply to repayments of loans received after the date of the enactment
of this Act.
SEC. 607. COORDINATION OF CERTAIN RULES APPLICABLE TO LOW-INCOME
HOUSING CREDIT AND QUALIFIED RESIDENTIAL RENTAL PROJECT
EXEMPT FACILITY BONDS.
(a) Determination of Next Available Unit.--Paragraph (3) of section
142(d) (relating to current income determinations) is amended by adding
at the end the following new subparagraph:
``(C) Exception for projects with respect to which
affordable housing credit is allowed.--In the case of a
project with respect to which credit is allowed under
section 42, the second sentence of subparagraph (B)
shall be applied by substituting `building (within the
meaning of section 42)' for `project'.''.
(b) Students.--Paragraph (2) of section 142(d) (relating to
definitions and special rules) is amended by adding at the end the
following new subparagraph:
``(C) Students.--Rules similar to the rules of
42(i)(3)(D) shall apply for purposes of this
subsection.''.
(c) Single-Room Occupancy Units.--Paragraph (2) of section 142(d)
(relating to definitions and special rules), as amended by subsection
(b), is further amended by adding at the end the following new
subparagraph:
``(D) Single-room occupancy units.--A unit shall
not fail to be treated as a residential unit merely
because such unit is a single-room occupancy unit
(within the meaning of section 42).''.
(d) Effective Date.--The amendments made by this section shall
apply to determinations of the status of qualified residential rental
projects for periods beginning after the date of the enactment of this
Act, with respect to bonds issued before, on, or after such date.
Subpart C--Reforms Related to the Low-Income Housing Credit and Tax-
Exempt Housing Bonds
SEC. 609. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS INCOME.
(a) In General.--Paragraph (2) of section 142(d), as amended by
section 607, is further amended by adding at the end the following new
subparagraph:
``(E) Hold harmless for reductions in area median
gross income.--
``(i) In general.--Any determination of
area median gross income under subparagraph (B)
with respect to any project for any calendar
year after 2008 shall not be less than the area
median gross income determined under such
subparagraph with respect to such project for
the calendar year preceding the calendar year
for which such determination is made.
``(ii) Special rule for certain census
changes.--In the case of a HUD hold harmless
impacted project, the area median gross income
with respect to such project for any calendar
year after 2008 (hereafter in this clause
referred to as the current calendar year) shall
be the greater of the amount determined without
regard to this clause or the sum of--
``(I) the area median gross income
determined under the HUD hold harmless
policy with respect to such project for
calendar year 2008, plus
``(II) any increase in the area
median gross income determined under
subparagraph (B) (determined without
regard to the HUD hold harmless policy
and this subparagraph) with respect to
such project for the current calendar
year over the area median gross income
(as so determined) with respect to such
project for calendar year 2008.
``(iii) HUD hold harmless policy.--The term
`HUD hold harmless policy' means the
regulations under which a policy similar to the
rules of clause (i) applied to prevent a change
in the method of determining area median gross
income from resulting in a reduction in the
area median gross income determined with
respect to certain projects in calendar years
2007 and 2008.
``(iv) HUD hold harmless impacted
project.--The term `HUD hold harmless impacted
project' means any project with respect to
which area median gross income was determined
under subparagraph (B) for calendar year 2007
or 2008 if such determination would have been
less but for the HUD hold harmless policy.''.
(b) Effective Date.--The amendment made by this section shall apply
to determinations of area median gross income for calendar years after
2008.
SEC. 610. EXCEPTION TO ANNUAL CURRENT INCOME DETERMINATION REQUIREMENT
WHERE DETERMINATION NOT RELEVANT.
(a) In General.--Subparagraph (A) of section 142(d)(3) is amended
by adding at the end the following new sentence: ``The preceding
sentence shall not apply with respect to any project for any year if
during such year no residential unit in the project is occupied by a
new resident whose income exceeds the applicable income limit.''.
(b) Effective Date.--The amendment made by this section shall apply
to years ending after the date of the enactment of this Act.
PART 2--SINGLE FAMILY HOUSING
SEC. 612. FIRST-TIME HOMEBUYER CREDIT.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
is amended by redesignating section 36 as section 37 and by inserting
after section 35 the following new section:
``SEC. 36. FIRST-TIME HOMEBUYER CREDIT.
``(a) Allowance of Credit.--In the case of an individual who is a
first-time homebuyer of a principal residence in the United States
during a taxable year, there shall be allowed as a credit against the
tax imposed by this subtitle for such taxable year an amount equal to
10 percent of the purchase price of the residence.
``(b) Limitations.--
``(1) Dollar limitation.--
``(A) In general.--Except as otherwise provided in
this paragraph, the credit allowed under subsection (a)
shall not exceed $7,500.
``(B) Married individuals filing separately.--In
the case of a married individual filing a separate
return, subparagraph (A) shall be applied by
substituting `$3,750' for `$7,500'.
``(C) Other individuals.--If two or more
individuals who are not married purchase a principal
residence, the amount of the credit allowed under
subsection (a) shall be allocated among such
individuals in such manner as the Secretary may
prescribe, except that the total amount of the credits
allowed to all such individuals shall not exceed
$7,500.
``(2) Limitation based on modified adjusted gross income.--
``(A) In general.--The amount allowable as a credit
under subsection (a) (determined without regard to this
paragraph) for the taxable year shall be reduced (but
not below zero) by the amount which bears the same
ratio to the amount which is so allowable as--
``(i) the excess (if any) of--
``(I) the taxpayer's modified
adjusted gross income for such taxable
year, over
``(II) $70,000 ($140,000 in the
case of a joint return), bears to
``(ii) $20,000.
``(B) Modified adjusted gross income.--For purposes
of subparagraph (A), the term `modified adjusted gross
income' means the adjusted gross income of the taxpayer
for the taxable year increased by any amount excluded
from gross income under section 911, 931, or 933.
``(c) Definitions.--For purposes of this section--
``(1) First-time homebuyer.--The term `first-time
homebuyer' means any individual if such individual (and if
married, such individual's spouse) had no present ownership
interest in a principal residence during the 3-year period
ending on the date of the purchase of the principal residence
to which this section applies.
``(2) Principal residence.--The term `principal residence'
has the same meaning as when used in section 121.
``(3) Purchase.--
``(A) In general.--The term `purchase' means any
acquisition, but only if--
``(i) the property is not acquired from a
person related to the person acquiring it, and
``(ii) the basis of the property in the
hands of the person acquiring it is not
determined--
``(I) in whole or in part by
reference to the adjusted basis of such
property in the hands of the person
from whom acquired, or
``(II) under section 1014(a)
(relating to property acquired from a
decedent).
``(B) Construction.--A residence which is
constructed by the taxpayer shall be treated as
purchased by the taxpayer on the date the taxpayer
first occupies such residence.
``(4) Purchase price.--The term `purchase price' means the
adjusted basis of the principal residence on the date such
residence is purchased.
``(5) Related persons.--A person shall be treated as
related to another person if the relationship between such
persons would result in the disallowance of losses under
section 267 or 707(b) (but, in applying section 267(b) and (c)
for purposes of this section, paragraph (4) of section 267(c)
shall be treated as providing that the family of an individual
shall include only his spouse, ancestors, and lineal
descendants).
``(d) Exceptions.--No credit under subsection (a) shall be allowed
to any taxpayer for any taxable year with respect to the purchase of a
residence if--
``(1) a credit under section 1400C (relating to first-time
homebuyer in the District of Columbia) is allowable to the
taxpayer (or the taxpayer's spouse) for such taxable year or
any prior taxable year,
``(2) the residence is financed by the proceeds of a
qualified mortgage issue the interest on which is exempt from
tax under section 103,
``(3) the taxpayer is a nonresident alien, or
``(4) the taxpayer disposes of such residence (or such
residence ceases to be the principal residence of the taxpayer
(and, if married, the taxpayer's spouse)) before the close of
such taxable year.
``(e) Reporting.--If the Secretary requires information reporting
under section 6045 by a person described in subsection (e)(2) thereof
to verify the eligibility of taxpayers for the credit allowable by this
section, the exception provided by section 6045(e) shall not apply.
``(f) Recapture of Credit.--
``(1) In general.--Except as otherwise provided in this
subsection, if a credit under subsection (a) is allowed to a
taxpayer, the tax imposed by this chapter shall be increased by
6\2/3\ percent of the amount of such credit for each taxable
year in the recapture period.
``(2) Acceleration of recapture.--If a taxpayer disposes of
the principal residence with respect to which a credit was
allowed under subsection (a) (or such residence ceases to be
the principal residence of the taxpayer (and, if married, the
taxpayer's spouse)) before the end of the recapture period--
``(A) the tax imposed by this chapter for the
taxable year of such disposition or cessation, shall be
increased by the excess of the amount of the credit
allowed over the amounts of tax imposed by paragraph
(1) for preceding taxable years, and
``(B) paragraph (1) shall not apply with respect to
such credit for such taxable year or any subsequent
taxable year.
``(3) Limitation based on gain.--In the case of the sale of
the principal residence to a person who is not related to the
taxpayer, the increase in tax determined under paragraph (2)
shall not exceed the amount of gain (if any) on such sale.
Solely for purposes of the preceding sentence, the adjusted
basis of such residence shall be reduced by the amount of the
credit allowed under subsection (a) to the extent not
previously recaptured under paragraph (1).
``(4) Exceptions.--
``(A) Death of taxpayer.--Paragraphs (1) and (2)
shall not apply to any taxable year ending after the
date of the taxpayer's death.
``(B) Involuntary conversion.--Paragraph (2) shall
not apply in the case of a residence which is
compulsorily or involuntarily converted (within the
meaning of section 1033(a)) if the taxpayer acquires a
new principal residence during the 2-year period
beginning on the date of the disposition or cessation
referred to in paragraph (2). Paragraph (2) shall apply
to such new principal residence during the recapture
period in the same manner as if such new principal
residence were the converted residence.
``(C) Transfers between spouses or incident to
divorce.--In the case of a transfer of a residence to
which section 1041(a) applies--
``(i) paragraph (2) shall not apply to such
transfer, and
``(ii) in the case of taxable years ending
after such transfer, paragraphs (1) and (2)
shall apply to the transferee in the same
manner as if such transferee were the
transferor (and shall not apply to the
transferor).
``(5) Joint returns.--In the case of a credit allowed under
subsection (a) with respect to a joint return, half of such
credit shall be treated as having been allowed to each
individual filing such return for purposes of this subsection.
``(6) Recapture period.--For purposes of this subsection,
the term `recapture period' means the 15 taxable years
beginning with the second taxable year following the taxable
year in which the purchase of the principal residence for which
a credit is allowed under subsection (a) was made.
``(g) Application of Section.--This section shall only apply to a
principal residence purchased by the taxpayer on or after April 9,
2008, and before April 1, 2009.''.
(b) Conforming Amendments.--
(1) Section 26(b)(2) is amended by striking ``and'' at the
end of subparagraph (U), by striking the period and inserting
``, and'' and the end of subparagraph (V), and by inserting
after subparagraph (V) the following new subparagraph:
``(W) section 36(f) (relating to recapture of
homebuyer credit).''.
(2) Section 6211(b)(4)(A) is amended by striking ``34,''
and all that follows through ``6428'' and inserting ``34, 35,
36, 53(e), and 6428''.
(3) Section 1324(b)(2) of title 31, United States Code, is
amended by inserting ``, 36,'' after ``section 35''.
(4) The table of sections for subpart C of part IV of
subchapter A of chapter 1 is amended by redesignating the item
relating to section 36 as an item relating to section 37 and by
inserting before such item the following new item:
``Sec. 36. First-time homebuyer credit.''.
(c) Effective Date.--The amendments made by this section shall
apply to residences purchased on or after April 9, 2008, in taxable
years ending on or after such date.
SEC. 613. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY TAXES FOR
NONITEMIZERS.
(a) In General.--Section 63(c)(1) (defining standard deduction) is
amended by striking ``and'' at the end of subparagraph (A), by striking
the period at the end of subparagraph (B) and inserting ``, and'', and
by adding at the end the following new subparagraph:
``(C) in the case of any taxable year beginning in
2008, the real property tax deduction.''.
(b) Definition.--Section 63(c) is amended by adding at the end the
following new paragraph:
``(7) Real property tax deduction.--For purposes of
paragraph (1), the real property tax deduction is the lesser
of--
``(A) the amount allowable as a deduction under
this chapter for State and local taxes described in
section 164(a)(1), or
``(B) $350 ($700 in the case of a joint return).
Any taxes taken into account under section 62(a) shall not be
taken into account under this paragraph.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2007.
PART 3--GENERAL PROVISIONS
SEC. 615. TEMPORARY LIBERALIZATION OF TAX-EXEMPT HOUSING BOND RULES.
(a) Temporary Increase in Volume Cap.--
(1) In general.--Subsection (d) of section 146 is amended
by adding at the end the following new paragraph:
``(5) Increase and set aside for housing bonds for 2008.--
``(A) Increase for 2008.--In the case of calendar
year 2008, the State ceiling for each State shall be
increased by an amount equal to $10,000,000,000
multiplied by a fraction--
``(i) the numerator of which is the
population of such State, and
``(ii) the denominator of which is the
total population of all States.
``(B) Set aside.--
``(i) In general.--Any amount of the State
ceiling for any State which is attributable to
an increase under this paragraph shall be
allocated solely for one or more qualified
housing issues.
``(ii) Qualified housing issue.--For
purposes of this paragraph, the term `qualified
housing issue' means--
``(I) an issue described in section
142(a)(7) (relating to qualified
residential rental projects), or
``(II) a qualified mortgage issue
(determined by substituting `12-month
period' for `42-month period' each
place it appears in section
143(a)(2)(D)(i)).''.
(2) Carryforward of unused limitations.--Subsection (f) of
section 146 is amended by adding at the end the following new
paragraph:
``(6) Special rules for increased volume cap under
subsection (d)(5).--No amount which is attributable to the
increase under subsection (d)(5) may be used--
``(A) for any issue other than a qualified housing
issue (as defined in subsection (d)(5)), or
``(B) to issue any bond after calendar year
2010.''.
(b) Temporary Rule for Use of Qualified Mortgage Bonds Proceeds for
Subprime Refinancing Loans.--
(1) In general.--Section 143(k) (relating to other
definitions and special rules) is amended by adding at the end
the following new paragraph:
``(12) Special rules for subprime refinancings.--
``(A) In general.--Notwithstanding the requirements
of subsection (i)(1), the proceeds of a qualified
mortgage issue may be used to refinance a mortgage on a
residence which was originally financed by the
mortgagor through a qualified subprime loan.
``(B) Special rules.--In applying subparagraph (A)
to any refinancing--
``(i) subsection (a)(2)(D)(i) shall be
applied by substituting `12-month period' for
`42-month period' each place it appears,
``(ii) subsection (d) (relating to 3-year
requirement) shall not apply, and
``(iii) subsection (e) (relating to
purchase price requirement) shall be applied by
using the market value of the residence at the
time of refinancing in lieu of the acquisition
cost.
``(C) Qualified subprime loan.--The term `qualified
subprime loan' means an adjustable rate single-family
residential mortgage loan made after December 31, 2001,
and before January 1, 2008, that the bond issuer
determines would be reasonably likely to cause
financial hardship to the borrower if not refinanced.
``(D) Termination.--This paragraph shall not apply
to any bonds issued after December 31, 2010.''.
(c) Effective Date.--The amendments made by this section shall
apply to bonds issued after the date of the enactment of this Act.
SEC. 616. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON TAX-EXEMPT
HOUSING BONDS, LOW-INCOME HOUSING TAX CREDIT, AND
REHABILITATION CREDIT.
(a) Tax-Exempt Interest on Certain Housing Bonds Exempted From
Alternative Minimum Tax.--
(1) In general.--Subparagraph (C) of section 57(a)(5)
(relating to specified private activity bonds) is amended by
redesignating clauses (iii) and (iv) as clauses (iv) and (v),
respectively, and by inserting after clause (ii) the following
new clause:
``(iii) Exception for certain housing
bonds.--For purposes of clause (i), the term
`private activity bond' shall not include any
bond issued after the date of the enactment of
this clause if such bond is--
``(I) an exempt facility bond
issued as part of an issue 95 percent
or more of the net proceeds of which
are to be used to provide qualified
residential rental projects (as defined
in section 142(d)),
``(II) a qualified mortgage bond
(as defined in section 143(a)), or
``(III) a qualified veterans'
mortgage bond (as defined in section
143(b)).
The preceding sentence shall not apply to any
refunding bond unless such preceding sentence
applied to the refunded bond (or in the case of
a series of refundings, the original bond).''.
(2) No adjustment to adjusted current earnings.--
Subparagraph (B) of section 56(g)(4) is amended by adding at
the end the following new clause:
``(iii) Tax exempt interest on certain
housing bonds.--Clause (i) shall not apply in
the case of any interest on a bond to which
section 57(a)(5)(C)(iii) applies.''.
(b) Allowance of Low-Income Housing Credit Against Alternative
Minimum Tax.--Subparagraph (B) of section 38(c)(4) (relating to
specified credits) is amended by redesignating clauses (ii) through
(iv) as clauses (iii) through (v) and inserting after clause (i) the
following new clause:
``(ii) the credit determined under section
42 to the extent attributable to buildings
placed in service after December 31, 2007,''.
(c) Allowance of Rehabilitation Credit Against Alternative Minimum
Tax.--Subparagraph (B) of section 38(c)(4), as amended by subsection
(b), is amended by striking ``and'' at the end of clause (iv), by
redesignating clause (v) as clause (vi), and by inserting after clause
(iv) the following new clause:
``(v) the credit determined under section
47 to the extent attributable to qualified
rehabilitation expenditures properly taken into
account for periods after December 31, 2007,
and''.
(d) Effective Date.--
(1) Housing bonds.--The amendments made by subsection (a)
shall apply to bonds issued after the date of the enactment of
this Act.
(2) Low income housing credit.--The amendments made by
subsection (b) shall apply to credits determined under section
42 of the Internal Revenue Code of 1986 to the extent
attributable to buildings placed in service after December 31,
2007.
(3) Rehabilitation credit.--The amendments made by
subsection (c) shall apply to credits determined under section
47 of the Internal Revenue Code of 1986 to the extent
attributable to qualified rehabilitation expenditures properly
taken into account for periods after December 31, 2007.
SEC. 617. BONDS GUARANTEED BY FEDERAL HOME LOAN BANKS ELIGIBLE FOR
TREATMENT AS TAX-EXEMPT BONDS.
(a) In General.--Subparagraph (A) of section 149(b)(3) (relating to
exceptions for certain insurance programs) is amended by striking
``or'' at the end of clause (ii), by striking the period at the end of
clause (iii) and inserting ``, or'' and by adding at the end the
following new clause:
``(iv) any guarantee by a Federal home loan
bank made in connection with the original
issuance of a bond during the period beginning
on the date of the enactment of this Act and
ending on December 31, 2010 (or a renewal or
extension of a guarantee so made).''.
(b) Safety and Soundness Requirements.--Paragraph (3) of section
149(b) is amended by adding at the end the following new subparagraph:
``(E) Safety and soundness requirements for federal
home loan banks.--Clause (iv) of subparagraph (A) shall
not apply to any guarantee by a Federal home loan bank
unless such bank meets safety and soundness collateral
requirements for such guarantees which are at least as
stringent as such requirements which apply under
regulations applicable to such guarantees by Federal
home loan banks as in effect on April 9, 2008.''.
(c) Effective Date.--The amendments made by this section shall
apply to guarantees made after the date of the enactment of this Act.
SEC. 618. MODIFICATION OF RULES PERTAINING TO FIRPTA NONFOREIGN
AFFIDAVITS.
(a) In General.--Subsection (b) of section 1445 (relating to
exemptions) is amended by adding at the end the following:
``(9) Alternative procedure for furnishing nonforeign
affidavit.--For purposes of paragraphs (2) and (7)--
``(A) In general.--Paragraph (2) shall be treated
as applying to a transaction if, in connection with a
disposition of a United States real property interest--
``(i) the affidavit specified in paragraph
(2) is furnished to a qualified substitute, and
``(ii) the qualified substitute furnishes a
statement to the transferee stating, under
penalty of perjury, that the qualified
substitute has such affidavit in his
possession.
``(B) Regulations.--The Secretary shall prescribe
such regulations as may be necessary or appropriate to
carry out this paragraph.''.
(b) Qualified Substitute.--Subsection (f) of section 1445 (relating
to definitions) is amended by adding at the end the following new
paragraph:
``(6) Qualified substitute.--The term `qualified
substitute' means, with respect to a disposition of a United
States real property interest--
``(A) the person (including any attorney or title
company) responsible for closing the transaction, other
than the transferor's agent, and
``(B) the transferee's agent.''.
(c) Exemption Not To Apply if Knowledge or Notice That Affidavit or
Statement Is False.--
(1) In general.--Paragraph (7) of section 1445(b) (relating
to special rules for paragraphs (2) and (3)) is amended to read
as follows:
``(7) Special rules for paragraphs (2), (3), and (9).--
Paragraph (2), (3), or (9) (as the case may be) shall not apply
to any disposition--
``(A) if--
``(i) the transferee or qualified
substitute has actual knowledge that the
affidavit referred to in such paragraph, or the
statement referred to in paragraph (9)(A)(ii),
is false, or
``(ii) the transferee or qualified
substitute receives a notice (as described in
subsection (d)) from a transferor's agent,
transferee's agent, or qualified substitute
that such affidavit or statement is false, or
``(B) if the Secretary by regulations requires the
transferee or qualified substitute to furnish a copy of
such affidavit or statement to the Secretary and the
transferee or qualified substitute fails to furnish a
copy of such affidavit or statement to the Secretary at
such time and in such manner as required by such
regulations.''.
(2) Liability.--
(A) Notice.--Paragraph (1) of section 1445(d)
(relating to notice of false affidavit; foreign
corporations) is amended to read as follows:
``(1) Notice of false affidavit; foreign corporations.--
If--
``(A) the transferor furnishes the transferee or
qualified substitute an affidavit described in
paragraph (2) of subsection (b) or a domestic
corporation furnishes the transferee an affidavit
described in paragraph (3) of subsection (b), and
``(B) in the case of--
``(i) any transferor's agent--
``(I) such agent has actual
knowledge that such affidavit is false,
or
``(II) in the case of an affidavit
described in subsection (b)(2)
furnished by a corporation, such
corporation is a foreign corporation,
or
``(ii) any transferee's agent or qualified
substitute, such agent or substitute has actual
knowledge that such affidavit is false,
such agent or qualified substitute shall so notify the
transferee at such time and in such manner as the
Secretary shall require by regulations.''.
(B) Failure to furnish notice.--Paragraph (2) of
section 1445(d) (relating to failure to furnish notice)
is amended to read as follows:
``(2) Failure to furnish notice.--
``(A) In general.--If any transferor's agent,
transferee's agent, or qualified substitute is required
by paragraph (1) to furnish notice, but fails to
furnish such notice at such time or times and in such
manner as may be required by regulations, such agent or
substitute shall have the same duty to deduct and
withhold that the transferee would have had if such
agent or substitute had complied with paragraph (1).
``(B) Liability limited to amount of
compensation.--An agent's or substitute's liability
under subparagraph (A) shall be limited to the amount
of compensation the agent or substitute derives from
the transaction.''.
(C) Conforming amendment.--The heading for section
1445(d) is amended by striking ``or Transferee's
Agents'' and inserting ``, Transferee's Agents, or
Qualified Substitutes''.
(d) Effective Date.--The amendments made by this section shall
apply to dispositions of United States real property interests after
the date of the enactment of this Act.
SEC. 619. MODIFICATION OF DEFINITION OF TAX-EXEMPT USE PROPERTY FOR
PURPOSES OF THE REHABILITATION CREDIT.
(a) In General.--Subclause (I) of section 47(c)(2)(B)(v) is amended
by striking ``section 168(h)'' and inserting ``section 168(h), except
that `50 percent' shall be substituted for `35 percent' in paragraph
(1)(B)(iii) thereof''.
(b) Effective Date.--The amendments made by this section shall
apply to expenditures properly taken into account for periods after
December 31, 2007.
Subtitle B--Reforms Related to Real Estate Investment Trusts
PART 1--FOREIGN CURRENCY AND OTHER QUALIFIED ACTIVITIES
SEC. 621. REVISIONS TO REIT INCOME TESTS.
(a) Addition of Permissible Income Categories.--Section 856(c)
(relating to limitations) is amended--
(1) by striking ``and'' at the end of paragraph (2)(G) and
by inserting after paragraph (2)(H) the following new
subparagraphs:
``(I) passive foreign exchange gains; and
``(J) any other item of income or gain as
determined by the Secretary;'', and
(2) by striking ``and'' at the end of paragraphs (3)(H) and
(3)(I) and by inserting after paragraph (3)(I) the following
new subparagraphs:
``(J) real estate foreign exchange gains; and
``(K) any other item of income or gain as
determined by the Secretary; and''.
(b) Rules Regarding Foreign Currency Transactions.--Section 856
(defining real estate investment trust) is amended by adding at the end
the following new subsection:
``(n) Rules Regarding Foreign Currency Transactions.--With respect
to any taxable year--
``(1) Real estate foreign exchange gains.--For purposes of
subsection (c)(3)(J), the term `real estate foreign exchange
gains' means--
``(A) foreign currency gains (as defined in section
988(b)(1)) which are attributable to--
``(i) any item described in subsection
(c)(3) (other than in subparagraph (J)
thereof),
``(ii) the acquisition or ownership of
obligations secured by mortgages on real
property or on interests in real property
(other than foreign currency gains attributable
to any item described in clause (i)), or
``(iii) becoming or being the obligor under
obligations secured by mortgages on real
property or on interests in real property
(other than foreign currency gains attributable
to any item described in clause (i)),
``(B) gains described in section 987 attributable
to a qualified business unit (as defined by section
989) of the real estate investment trust, but only if
such qualified business unit meets the requirements
under--
``(i) subsection (c)(3) (without regard to
subparagraph (J) thereof) for the taxable year,
and
``(ii) subsection (c)(4)(A) at the close of
each quarter that the real estate investment
trust has directly or indirectly held the
qualified business unit, and
``(C) any other foreign currency gains as
determined by the Secretary.
``(2) Passive foreign exchange gains.--For purposes of
subsection (c)(2)(I), the term `passive foreign exchange gains'
means--
``(A) real estate foreign exchange gains,
``(B) foreign currency gains (as defined in section
988(b)(1)) which are not described in subparagraph (A)
and which are attributable to any item described in
subsection (c)(2) (other than in subparagraph (I)
thereof), and
``(C) any other foreign currency gains as
determined by the Secretary.''.
(c) Addition to REIT Hedging Rule.--Subparagraph (G) of section
856(c)(5) is amended to read as follows:
``(G) Treatment of certain hedging instruments.--
Except to the extent as determined by the Secretary--
``(i) any income of a real estate
investment trust from a hedging transaction (as
defined in clause (ii) or (iii) of section
1221(b)(2)(A)) which is clearly identified
pursuant to section 1221(a)(7), including gain
from the sale or disposition of such a
transaction, shall not constitute gross income
under paragraphs (2) and (3) to the extent that
the transaction hedges any indebtedness
incurred or to be incurred by the trust to
acquire or carry real estate assets, and
``(ii) any income of a real estate
investment trust from a transaction entered
into by the trust primarily to manage risk of
currency fluctuations with respect to any item
described in paragraph (2) or (3), including
gain from the termination of such a
transaction, shall not constitute gross income
under paragraphs (2) and (3), but only if such
transaction is clearly identified as such
before the close of the day on which it was
acquired, originated, or entered into (or such
other time as the Secretary may prescribe).''.
(d) Authority to Exclude Items of Income From REIT Income Tests.--
Section 856(c)(5) is amended by adding at the end the following new
subparagraph:
``(H) Secretarial authority to exclude other items
of income.--The Secretary is authorized to determine
whether any item of income or gain which does not
otherwise qualify under paragraph (2) or (3) may be
considered as not constituting gross income solely for
purposes of this part.''.
SEC. 622. REVISIONS TO REIT ASSET TESTS.
(a) Clarification of Valuation Test.--The first sentence in the
matter following section 856(c)(4)(B)(iii)(III) is amended by inserting
``(including a discrepancy caused solely by the change in the foreign
currency exchange rate used to value a foreign asset)'' after ``such
requirements''.
(b) Clarification of Permissible Asset Category.--Section
856(c)(5), as amended by section 621(d), is amended by adding at the
end the following new subparagraph:
``(I) Cash.--The term `cash' includes foreign
currency if the real estate investment trust or its
qualified business unit (as defined in section 989)
uses such foreign currency as its functional currency
(as defined in section 985(b)).''.
SEC. 623. CONFORMING FOREIGN CURRENCY REVISIONS.
(a) Net Income From Foreclosure Property.--Clause (i) of section
857(b)(4)(B) is amended to read as follows:
``(i) gain (including any foreign currency
gain, as defined in section 988(b)(1)) from the
sale or other disposition of foreclosure
property described in section 1221(a)(1) and
the gross income for the taxable year derived
from foreclosure property (as defined in
section 856(e)), but only to the extent such
gross income is not described in (or, in the
case of foreign currency gain, not attributable
to gross income described in) section 856(c)(3)
other than subparagraph (F) thereof, over''.
(b) Net Income From Prohibited Transactions.--Clause (i) of section
857(b)(6)(B) is amended to read as follows:
``(i) the term `net income derived from
prohibited transactions' means the excess of
the gain (including any foreign currency gain,
as defined in section 988(b)(1)) from
prohibited transactions over the deductions
(including any foreign currency loss, as
defined in section 988(b)(2)) allowed by this
chapter which are directly connected with
prohibited transactions;''.
PART 2--TAXABLE REIT SUBSIDIARIES
SEC. 625. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.
Section 856(c)(4)(B)(ii) is amended by striking ``20 percent'' and
inserting ``25 percent''.
PART 3--DEALER SALES
SEC. 627. HOLDING PERIOD UNDER SAFE HARBOR.
Section 857(b)(6) (relating to income from prohibited transactions)
is amended--
(1) by striking ``4 years'' in subparagraphs (C)(i),
(C)(iv), and (D)(i) and inserting ``2 years'',
(2) by striking ``4-year period'' in subparagraphs (C)(ii),
(D)(ii), and (D)(iii) and inserting ``2-year period'', and
(3) by striking ``real estate asset''and all that follows
through ``if'' in the matter preceding clause (i) of
subparagraphs (C) and (D), respectively, and inserting ``real
estate asset (as defined in section 856(c)(5)(B)) and which is
described in section 1221(a)(1) if''.
SEC. 628. DETERMINING VALUE OF SALES UNDER SAFE HARBOR.
Section 857(b)(6) is amended--
(1) by striking the semicolon at the end of subparagraph
(C)(iii) and inserting ``, or (III) the fair market value of
property (other than sales of foreclosure property or sales to
which section 1033 applies) sold during the taxable year does
not exceed 10 percent of the fair market value of all of the
assets of the trust as of the beginning of the taxable year;'',
and
(2) by adding ``or'' at the end of subclause (II) of
subparagraph (D)(iv) and by adding at the end of such
subparagraph the following new subclause:
``(III) the fair market value of property
(other than sales of foreclosure property or
sales to which section 1033 applies) sold
during the taxable year does not exceed 10
percent of the fair market value of all of the
assets of the trust as of the beginning of the
taxable year,''.
PART 4--HEALTH CARE REITS
SEC. 630. CONFORMITY FOR HEALTH CARE FACILITIES.
(a) Related Party Rentals.--Subparagraph (B) of section 856(d)(8)
(relating to special rule for taxable REIT subsidiaries) is amended to
read as follows:
``(B) Exception for certain lodging facilities and
health care property.--The requirements of this
subparagraph are met with respect to an interest in
real property which is a qualified lodging facility or
a qualified health care property (as defined in
subsection (e)(6)(D)(i)) leased by the trust to a
taxable REIT subsidiary of the trust if the property is
operated on behalf of such subsidiary by a person who
is an eligible independent contractor. For purposes of
this section, a taxable REIT subsidiary is not
considered to be operating or managing a qualified
health care property or qualified lodging facility
solely because it directly or indirectly possesses a
license, permit or similar instrument enabling it to do
so.''.
(b) Eligible Independent Contractor.--Subparagraphs (A) and (B) of
section 856(d)(9) (relating to eligible independent contractor) are
amended to read as follows:
``(A) In general.--The term `eligible independent
contractor' means, with respect to any qualified
lodging facility or qualified health care property (as
defined in subsection (e)(6)(D)(i)), any independent
contractor if, at the time such contractor enters into
a management agreement or other similar service
contract with the taxable REIT subsidiary to operate
such qualified lodging facility or qualified health
care property, such contractor (or any related person)
is actively engaged in the trade or business of
operating qualified lodging facilities or qualified
health care properties, respectively, for any person
who is not a related person with respect to the real
estate investment trust or the taxable REIT subsidiary.
``(B) Special rules.--Solely for purposes of this
paragraph and paragraph (8)(B), a person shall not fail
to be treated as an independent contractor with respect
to any qualified lodging facility or qualified health
care property (as so defined) by reason of the
following:
``(i) The taxable REIT subsidiary bears the
expenses for the operation of such qualified
lodging facility or qualified health care
property pursuant to the management agreement
or other similar service contract.
``(ii) The taxable REIT subsidiary receives
the revenues from the operation of such
qualified lodging facility or qualified health
care property, net of expenses for such
operation and fees payable to the operator
pursuant to such agreement or contract.
``(iii) The real estate investment trust
receives income from such person with respect
to another property that is attributable to a
lease of such other property to such person
that was in effect as of the later of--
``(I) January 1, 1999, or
``(II) the earliest date that any
taxable REIT subsidiary of such trust
entered into a management agreement or
other similar service contract with
such person with respect to such
qualified lodging facility or qualified
health care property.''.
(c) Taxable Reit Subsidiaries.--The last sentence of section
856(l)(3) is amended--
(1) by inserting ``or a health care facility'' after ``a
lodging facility'', and
(2) by inserting ``or health care facility'' after ``such
lodging facility''.
PART 5--EFFECTIVE DATES
SEC. 632. EFFECTIVE DATES.
(a) In General.--Except as otherwise provided in this section, the
amendments made by this subtitle shall apply to taxable years beginning
after the date of the enactment of this Act.
(b) REIT Income Tests.--
(1) The amendment made by section 621(a) and (b) shall
apply to gains and items of income recognized after the date of
the enactment of this Act.
(2) The amendment made by section 621(c) shall apply to
transactions entered into after the date of the enactment of
this Act.
(3) The amendment made by section 621(d) shall apply after
the date of the enactment of this Act.
(c) Conforming Foreign Currency Revisions.--
(1) The amendment made by section 623(a) shall apply to
gains recognized after the date of the enactment of this Act.
(2) The amendment made by section 623(b) shall apply to
gains and deductions recognized after the date of the enactment
of this Act.
(d) Dealer Sales.--The amendments made by part 3 shall apply to
sales made after the date of the enactment of this Act.
Subtitle C--Revenue Provisions
SEC. 641. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES
TRANSACTIONS.
(a) In General.--
(1) Broker reporting for securities transactions.--Section
6045 (relating to returns of brokers) is amended by adding at
the end the following new subsection:
``(g) Additional Information Required in the Case of Securities
Transactions, etc.--
``(1) In general.--If a broker is otherwise required to
make a return under subsection (a) with respect to the gross
proceeds of the sale of a covered security, the broker shall
include in such return the information described in paragraph
(2).
``(2) Additional information required.--
``(A) In general.--The information required under
paragraph (1) to be shown on a return with respect to a
covered security of a customer shall include the
customer's adjusted basis in such security and whether
any gain or loss with respect to such security is long-
term or short-term (within the meaning of section
1222).
``(B) Determination of adjusted basis.--For
purposes of subparagraph (A)--
``(i) In general.--The customer's adjusted
basis shall be determined--
``(I) in the case of any security
(other than any stock for which an
average basis method is permissible
under section 1012), in accordance with
the first-in first-out method unless
the customer notifies the broker by
means of making an adequate
identification of the stock sold or
transferred, and
``(II) in the case of any stock for
which an average basis method is
permissible under section 1012, in
accordance with the broker's default
method unless the customer notifies the
broker that he elects another
acceptable method under section 1012
with respect to the account in which
such stock is held.
``(ii) Exception for wash sales.--Except as
otherwise provided by the Secretary, the
customer's adjusted basis shall be determined
without regard to section 1091 (relating to
loss from wash sales of stock or securities)
unless the transactions occur in the same
account with respect to identical securities.
``(3) Covered security.--For purposes of this subsection--
``(A) In general.--The term `covered security'
means any specified security acquired on or after the
applicable date if such security--
``(i) was acquired through a transaction in
the account in which such security is held, or
``(ii) was transferred to such account from
an account in which such security was a covered
security, but only if the broker received a
statement under section 6045A with respect to
the transfer.
``(B) Specified security.--The term `specified
security' means--
``(i) any share of stock in a corporation,
``(ii) any note, bond, debenture, or other
evidence of indebtedness,
``(iii) any commodity, or contract or
derivative with respect to such commodity, if
the Secretary determines that adjusted basis
reporting is appropriate for purposes of this
subsection, and
``(iv) any other financial instrument with
respect to which the Secretary determines that
adjusted basis reporting is appropriate for
purposes of this subsection.
``(C) Applicable date.--The term `applicable date'
means--
``(i) January 1, 2010, in the case of any
specified security which is stock in a
corporation (other than any stock described in
clause (ii)),
``(ii) January 1, 2011, in the case of any
stock for which an average basis method is
permissible under section 1012, and
``(iii) January 1, 2012, or such later date
determined by the Secretary in the case of any
other specified security.
``(4) Treatment of s corporations.--In the case of the sale
of a covered security acquired by an S corporation (other than
a financial institution) after December 31, 2011, such S
corporation shall be treated in the same manner as a
partnership for purposes of this section.
``(5) Special rules for short sales.--In the case of a
short sale, reporting under this section shall be made for the
year in which such sale is closed.''.
(2) Broker information required with respect to options.--
Section 6045, as amended by subsection (a), is amended by
adding at the end the following new subsection:
``(h) Application to Options on Securities.--
``(1) Exercise of option.--For purposes of this section, if
a covered security is acquired or disposed of pursuant to the
exercise of an option that was granted or acquired in the same
account as the covered security, the amount received with
respect to the grant or paid with respect to the acquisition of
such option shall be treated as an adjustment to gross proceeds
or as an adjustment to basis, as the case may be.
``(2) Lapse or closing transaction.--In the case of the
lapse (or closing transaction (as defined in section
1234(b)(2)(A))) of an option on a specified security or the
exercise of a cash-settled option on a specified security,
reporting under subsections (a) and (g) with respect to such
option shall be made for the calendar year which includes the
date of such lapse, closing transaction, or exercise.
``(3) Prospective application.--Paragraphs (1) and (2)
shall not apply to any option which is granted or acquired
before January 1, 2012.
``(4) Definitions.--For purposes of this subsection, the
terms `covered security' and `specified security' shall have
the meanings given such terms in subsection (g)(3).''.
(3) Extension of period for statements sent to customers.--
(A) In general.--Subsection (b) of section 6045 is
amended by striking ``January 31'' and inserting
``February 15''.
(B) Statements related to substitute payments.--
Subsection (d) of section 6045 is amended--
(i) by striking ``at such time and'', and
(ii) by inserting after ``other item.'' the
following new sentence: ``The written statement
required under the preceding sentence shall be
furnished on or before February 15 of the year
following the calendar year in which the
payment was made.''.
(C) Other statements.--Subsection (b) of section
6045 is amended by adding at the end the following:
``In the case of a consolidated reporting statement (as
defined in regulations) with respect to any account,
any statement which would otherwise be required to be
furnished on or before January 31 of a calendar year
with respect to any item reportable to the taxpayer
shall instead be required to be furnished on or before
February 15 of such calendar year if furnished with
such consolidated reporting statement.''.
(b) Determination of Basis of Certain Securities on Account by
Account or Average Basis Method.--Section 1012 (relating to basis of
property-cost) is amended--
(1) by striking ``The basis of property'' and inserting the
following:
``(a) In General.--The basis of property'',
(2) by striking ``The cost of real property'' and inserting
the following:
``(b) Special Rule for Apportioned Real Estate Taxes.--The cost of
real property'', and
(3) by adding at the end the following new subsections:
``(c) Determinations by Account.--
``(1) In general.--In the case of the sale, exchange, or
other disposition of a specified security on or after the
applicable date, the conventions prescribed by regulations
under this section shall be applied on an account by account
basis.
``(2) Application to open-end funds.--
``(A) In general.--Except as provided in
subparagraph (B), any stock in an open-end fund
acquired before January 1, 2011, shall be treated as a
separate account from any such stock acquired on or
after such date.
``(B) Election by open-end fund for treatment as
single account.--If an open-end fund elects to have
this subparagraph apply with respect to one or more of
its stockholders--
``(i) subparagraph (A) shall not apply with
respect to any stock in such fund held by such
stockholders, and
``(ii) all stock in such fund which is held
by such stockholders shall be treated as
covered securities described in section
6045(g)(3) without regard to the date of the
acquisition of such stock.
A rule similar to the rule of the preceding sentence
shall apply with respect to a broker holding stock in
an open-end fund as a nominee.
``(3) Definitions.--For purposes of this section--
``(A) Open-end fund.--The term `open-end fund'
means a regulated investment company (as defined in
section 851) which is offering for sale or has
outstanding any redeemable security of which it is the
issuer. Any stock which is traded on an established
securities exchange shall not be treated as stock in an
open-end fund.
``(B) Specified security; applicable date.--The
terms `specified security' and `applicable date' shall
have the meaning given such terms in section 6045(g).
``(d) Average Basis for Stock Acquired Pursuant to a Dividend
Reinvestment Plan.--
``(1) In general.--In the case of any stock acquired after
December 31, 2010, in connection with a dividend reinvestment
plan, the basis of such stock while held as part of such plan
shall be determined using one of the methods which may be used
for determining the basis of stock in an open-end fund.
``(2) Treatment after transfer.--In the case of the
transfer to another account of stock to which paragraph (1)
applies, such stock shall have a cost basis in such other
account equal to its basis in the dividend reinvestment plan
immediately before such transfer (properly adjusted for any
fees or other charges taken into account in connection with
such transfer).
``(3) Separate accounts; election for treatment as single
account.--Rules similar to the rules of subsection (c)(2) shall
apply for purposes of this subsection.
``(4) Dividend reinvestment plan.--For purposes of this
subsection--
``(A) In general.--The term `dividend reinvestment
plan' means any arrangement under which dividends on
any stock are reinvested in stock identical to the
stock with respect to which the dividends are paid.
``(B) Initial stock acquisition treated as acquired
in connection with plan.--Stock shall be treated as
acquired in connection with a dividend reinvestment
plan if such stock is acquired pursuant to such plan or
if the dividends paid on such stock are subject to such
plan.''.
(c) Information by Transferors To Aid Brokers.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 is amended by inserting after section 6045 the
following new section:
``SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH TRANSFERS OF
COVERED SECURITIES TO BROKERS.
``(a) Furnishing of Information.--Every applicable person which
transfers to a broker (as defined in section 6045(c)(1)) a security
which is a covered security (as defined in section 6045(g)(3)) in the
hands of such applicable person shall furnish to such broker a written
statement in such manner and setting forth such information as the
Secretary may by regulations prescribe for purposes of enabling such
broker to meet the requirements of section 6045(g).
``(b) Applicable Person.--For purposes of subsection (a), the term
`applicable person' means--
``(1) any broker (as defined in section 6045(c)(1)), and
``(2) any other person as provided by the Secretary in
regulations.
``(c) Time for Furnishing Statement.--Except as otherwise provided
by the Secretary, any statement required by subsection (a) shall be
furnished not later than 15 days after the date of the transfer
described in such subsection.''.
(2) Assessable penalties.--Paragraph (2) of section 6724(d)
(defining payee statement) is amended by redesignating
subparagraphs (I) through (CC) as subparagraphs (J) through
(DD), respectively, and by inserting after subparagraph (H) the
following new subparagraph:
``(I) section 6045A (relating to information
required in connection with transfers of covered
securities to brokers),''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61 is amended by
inserting after the item relating to section 6045 the following
new item:
``Sec. 6045A. Information required in connection with transfers of
covered securities to brokers.''.
(d) Additional Issuer Information To Aid Brokers.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61, as amended by subsection (b), is amended by
inserting after section 6045A the following new section:
``SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF SPECIFIED
SECURITIES.
``(a) In General.--According to the forms or regulations prescribed
by the Secretary, any issuer of a specified security shall make a
return setting forth--
``(1) a description of any organizational action which
affects the basis of such specified security of such issuer,
``(2) the quantitative effect on the basis of such
specified security resulting from such action, and
``(3) such other information as the Secretary may
prescribe.
``(b) Time for Filing Return.--Any return required by subsection
(a) shall be filed not later than the earlier of--
``(1) 45 days after the date of the action described in
subsection (a), or
``(2) January 15 of the year following the calendar year
during which such action occurred.
``(c) Statements To Be Furnished to Holders of Specified Securities
or Their Nominees.--According to the forms or regulations prescribed by
the Secretary, every person required to make a return under subsection
(a) with respect to a specified security shall furnish to the nominee
with respect to the specified security (or certificate holder if there
is no nominee) a written statement showing--
``(1) the name, address, and phone number of the
information contact of the person required to make such return,
``(2) the information required to be shown on such return
with respect to such security, and
``(3) such other information as the Secretary may
prescribe.
The written statement required under the preceding sentence shall be
furnished to the holder on or before January 15 of the year following
the calendar year during which the action described in subsection (a)
occurred.
``(d) Specified Security.--For purposes of this section, the term
`specified security' has the meaning given such term by section
6045(g)(3)(B). No return shall be required under this section with
respect to actions described in subsection (a) with respect to a
specified security which occur before the applicable date (as defined
in section 6045(g)(3)(C)) with respect to such security.
``(e) Public Reporting in Lieu of Return.--The Secretary may waive
the requirements under subsections (a) and (c) with respect to a
specified security, if the person required to make the return under
subsection (a) makes publicly available, in such form and manner as the
Secretary determines necessary to carry out the purposes of this
section--
``(1) the name, address, phone number, and email address of
the information contact of such person, and
``(2) the information described in paragraphs (1), (2), and
(3) of subsection (a).''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1) of such
Code (defining information return) is amended by
redesignating clause (iv) and each of the clauses which
follow as clauses (v) through (xxii), respectively, and
by inserting after clause (iii) the following new
clause:
``(iv) section 6045B(a) (relating to
returns relating to actions affecting basis of
specified securities),''.
(B) Paragraph (2) of section 6724(d) of such Code
(defining payee statement), as amended by subsection
(c)(2), is amended by redesignating subparagraphs (J)
through (DD) as subparagraphs (K) through (EE),
respectively, and by inserting after subparagraph (I)
the following new subparagraph:
``(J) subsections (c) and (e) of section 6045B
(relating to returns relating to actions affecting
basis of specified securities),''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61 of such Code, as
amended by subsection (b)(3), is amended by inserting after the
item relating to section 6045A the following new item:
``Sec. 6045B. Returns relating to actions affecting basis of specified
securities.''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on January 1, 2010.
(2) Extension of period for statements sent to customers.--
The amendments made by subsection (a)(3) shall apply to
statements required to be furnished after December 31, 2008.
SEC. 642. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.
(a) In General.--Paragraphs (5)(D) and (6) of section 864(f) are
each amended by striking ``December 31, 2008'' and inserting ``December
31, 2009''.
(b) Transitional Rule.--Subsection (f) of section 864 is amended by
adding at the end the following new paragraph:
``(7) Transition.--In the case of the first taxable year to
which this subsection applies, the increase (if any) in the
amount of the interest expense allocable to sources within the
United States by reason of the application of this subsection
shall be 78 percent of the amount of such increase determined
without regard to this paragraph.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
SEC. 643. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
(a) Repeal of Adjustment for 2012.--Subparagraph (B) of section
401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 is
amended by striking the percentage contained therein and inserting
``100 percent''.
(b) Modification of Adjustment for 2013.--The percentage under
subparagraph (C) of section 401(1) of the Tax Increase Prevention and
Reconciliation Act of 2005 in effect on the date of the enactment of
this Act is increased by 13 percentage points.
Subtitle D--Coordination of Federal Housing Programs and Tax Incentives
for Housing
SEC. 651. SHORT TITLE.
This subtitle may be cited as the ``Housing Tax Credit Coordination
Act of 2008''.
SEC. 652. APPROVALS BY DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.
(a) Administrative and Procedural Changes.--
(1) In general.--The Secretary of Housing and Urban
Development (in this section referred to as the ``Secretary'')
shall, not later than the expiration of the 6-month period
beginning upon after the date of the enactment of this Act,
implement administrative and procedural changes to expedite
approval of multifamily housing projects under the jurisdiction
of the Department of Housing and Urban Development that meet
the requirements of the Secretary for such approvals.
(2) Projects.--The multifamily housing projects referred to
in paragraph (1) shall include--
(A) projects for which assistance is provided by
such Department in conjunction with any low-income
housing tax credits under section 42 of the Internal
Revenue Code of 1986 or tax-exempt housing bonds; and
(B) existing public housing projects and assisted
housing projects, for which approval of the Secretary
is necessary for transactions, in conjunction with any
such low-income housing tax credits or tax-exempt
housing bonds, involving the preservation or
rehabilitation of the project.
(3) Changes.--The administrative and procedural changes
referred to in paragraph (1) shall include all actions
necessary to carry out paragraph (1), which may include--
(A) improving the efficiency of approval
procedures;
(B) simplifying approval requirements,
(C) establishing time deadlines or target deadlines
for required approvals;
(D) modifying division of approval authority
between field and national offices;
(E) improving outreach to project sponsors
regarding information that is required to be submitted
for such approvals;
(F) requesting additional funding for increasing
staff, if necessary; and
(G) any other actions which would expedite
approvals.
Any such changes shall be made in a manner that provides for
full compliance with any existing requirements under law or
regulation that are designed to protect families receiving
public and assisted housing assistance, including income
targeting, rent, and fair housing provisions, and shall also
comply with requirements regarding environmental review and
protection and wages paid to laborers.
(b) Consultation.--The Secretary shall consult with the
Commissioner of the Internal Revenue Service and take such actions as
are appropriate in conjunction with such consultation to simplify the
coordination of rules, regulations, forms, and approval requirements
for multifamily housing projects projects for which assistance is
provided by such Department in conjunction with any low-income housing
tax credits under section 42 of the Internal Revenue Code of 1986 or
tax-exempt housing bonds.
(c) Recommendations.--In implementing the changes required under
this section, the Secretary shall solicit recommendations regarding
such changes from project owners and sponsors, investors and
stakeholders in housing tax credits, State and local housing finance
agencies, public housing agencies, tenant advocates, and other
stakeholders in such projects.
(d) Report.--Not later than the expiration of the 9-month period
beginning on the date of the enactment of this Act, the Secretary shall
submit a report to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban
Affairs of the Senate that--
(1) identifies the actions taken by the Secretary to comply
with this section;
(2) includes information regarding any resulting
improvements in the expedited approval for multifamily housing
projects;
(3) identifies recommendations made pursuant to subsection
(c);
(4) identifies actions taken by the Secretary to implement
the provisions in the amendments made by sections 4 and 5 of
this Act; and
(5) makes recommendations for any legislative changes that
are needed to facilitate prompt approval of assistance for such
projects.
SEC. 653. PROJECT APPROVALS BY RURAL HOUSING SERVICE.
Section 515(h) of the Housing Act of 1949 (42 U.S.C. 1485) is
amended--
(1) by inserting ``(1) Condition.--'' after ``(h)''; and
(2) by adding at the end the following new paragraphs:
``(2) Actions to Expedite Project Approvals.--
``(A) In general.--The Secretary shall take actions to
facilitate timely approval of requests to transfer ownership or
control, for the purpose of rehabilitation or preservation, of
multifamily housing projects for which assistance is provided
by the Secretary of Agriculture in conjunction with any low-
income housing tax credits under section 42 of the Internal
Revenue Code of 1986 or tax-exempt housing bonds.
``(B) Consultation.--The Secretary of Agriculture shall
consult with the Commissioner of the Internal Revenue Service
and take such actions as are appropriate in conjunction with
such consultation to simplify the coordination of rules,
regulations, forms (including applications forms for project
transfers), and approval requirements multifamily housing
projects for which assistance is provided by the Secretary of
Agriculture in conjunction with any low-income housing tax
credits under section 42 of the Internal Revenue Code of 1986
or tax-exempt housing bonds.
``(C) Existing requirements.--Any actions taken pursuant to
this paragraph shall be taken in a manner that provides for
full compliance with any existing requirements under law or
regulation that are designed to protect families receiving
Federal housing assistance, including income targeting, rent,
and fair housing provisions, and shall also comply with
requirements regarding environmental review and protection and
wages paid to laborers.
``(D) Recommendations.--In implementing the changes
required under this paragraph, the Secretary shall solicit
recommendations regarding such changes from project owners and
sponsors, investors and stakeholders in housing tax credits,
State and local housing finance agencies, tenant advocates, and
other stakeholders in such projects.''.
SEC. 654. USE OF FHA LOANS WITH HOUSING TAX CREDITS.
(a) Subsidy Layering Requirements.--Subsection (d) of section 102
of the Department of Housing and Urban Development Reform Act of 1989
(42 U.S.C. 3545(d)) is amended--
(1) in the first sentence, by inserting after ``assistance
within the jurisdiction of the Department'' the following: ``,
as such term is defined in subsection (m), except that for
purposes of this subsection such term shall not include any
mortgage insurance provided pursuant to title II of the
National Housing Act (12 U.S.C. 1707 et seq.)''; and
(2) in the second sentence, by inserting ``such'' before
``assistance''.
(b) Cost Certification.--Section 227 of National Housing Act (12
U.S.C. 1715r) is amended--
(1) in the matter preceding paragraph (a) (relating to a
definition of ``new or rehabilitated multifamily housing'')--
(A) in the first sentence--
(i) by striking ``Notwithstanding'' and
inserting ``Except as provided in subsection
(b) and notwithstanding''; and
(ii) by redesignating clauses (a) and (b)
as clauses (A) and (B), respectively; and
(B) by striking ``As used in this section--'';
(2) in paragraph (c) (relating to a definition of ``actual
cost'')--
(A) in clause (i), by redesignating clauses (1) and
(2) as clauses (I) and (II), respectively; and
(B) in clause (ii), by redesignating clauses (1)
and (2) as clauses (I) and (II), respectively;
(3) by redesignating paragraphs (a), (b), and (c) as
paragraphs (1), (2), and (3), respectively;
(4) by inserting before paragraph (1) (as so redesignated
by paragraph (3) of this subsection) the following:
``(b) Exemption for Certain Projects Assisted With Low-Income
Housing Tax Credit.--In the case of any mortgage insured under any
provision of this title that is executed in connection with the
construction, rehabilitation, purchase, or refinancing of a multifamily
housing project for which equity provided through any low-income
housing tax credit pursuant to Section 42 of the Internal Revenue Code
of 1986 (26 U.S.C. 42), if the Secretary determines at the time of
issuance of the firm commitment for insurance that the ratio of the
loan proceeds to the actual cost of the project is less than 80
percent, subsection (a) of this section shall not apply.
``(c) Definitions.--For purposes of this section, the following
definitions shall apply:''; and
(5) by inserting ``(a) Requirement.--'' after ``227.''.
(c) Other Provisions Regarding Treatment of Mortgages Covering Tax
Credit Projects.--Title II of the National Housing Act is amended by
inserting after section 227 (12 U.S.C. 1715r) the following new
section:
``SEC. 228. TREATMENT OF MORTGAGES COVERING TAX CREDIT PROJECTS.
``(a) Definition.--For purposes of this section, the term `insured
mortgage covering a tax credit project' means a mortgage insured under
any provision of this title that is executed in connection with the
construction, rehabilitation, purchase, or refinancing of a multifamily
housing project for which equity provided through any low-income
housing tax credit pursuant to section 42 of the Internal Revenue Code
of 1986 (26 U.S.C. 42).
``(b) Acceptance of Letters of Credit.--In the case of an insured
mortgage covering a tax credit project, the Secretary may not require
the escrowing of equity provided by the sale of any low-income housing
tax credits for the project pursuant to Section 42 of the Internal
Revenue Code of 1986, or any other form of security, such as a letter
of credit.
``(c) Asset Management Requirements.--In the case of an insured
mortgage covering a tax credit project for which project the applicable
tax credit allocating agency is causing to be performed periodic
inspections in compliance with the requirements of section 42 of the
Internal Revenue Code of 1986, such project shall be exempt from
requirements imposed by the Secretary regarding periodic inspections of
the property by the mortgagee. To the extent that other compliance
monitoring is being performed with respect to such a project by such an
allocating agency pursuant to such section 42, the Secretary shall, to
the extent that the Secretary determines such monitoring is sufficient
to ensure compliance with any requirements established by the
Secretary, accept such agency's evidence of compliance for purposes of
determining compliance with the Secretary's requirements.
``(d) Streamlined Processing Pilot Program.--
``(1) In general.--The Secretary shall establish a pilot
program to demonstrate the effectiveness of streamlining the
review process, which shall include all applications for
mortgage insurance under any provision of this title for
mortgages executed in connection with the construction,
rehabilitation, purchase, or refinancing of a multifamily
housing project for which equity provided through any low-
income housing tax credit pursuant to section 42 of the
Internal Revenue Code of 1986. The Secretary shall issue
instructions for implementing the pilot program under this
subsection not later than the expiration of the 180-day period
beginning upon the date of the enactment of the Housing Tax
Credit Coordination Act of 2008.
``(2) Requirements.--Such pilot program shall provide for--
``(A) the Secretary to appoint designated
underwriters, who shall be responsible for reviewing
such mortgage insurance applications and making
determinations regarding the eligibility of such
applications for such mortgage insurance in lieu of the
processing functions regarding such applications that
are otherwise performed by other employees of the
Department of Housing and Urban Development;
``(B) submission of applications for such mortgage
insurance by mortgagees who have previously been
expressly approved by the Secretary; and
``(C) determinations regarding the eligibility of
such applications for such mortgage insurance to be
made by the chief underwriter pursuant to requirements
prescribed by the Secretary, which shall include
requiring submission of reports regarding applications
of proposed mortgagees by third-party entities
expressly approved by the chief underwriter.''.
SEC. 655. OTHER HUD PROGRAMS.
(a) Section 8 Assistance.--
(1) PHA project-based assistance.--Section 8(o)(13) of the
United States Housing Act of 1937 (42 U.S.C. 1437f(o)(13)) is
amended--
(A) in subparagraph (D)(i)--
(i) by striking ``building'' and inserting
``project''; and
(ii) by adding at the end the following:
``For purposes of this subparagraph, the term
`project' means a single building, multiple
contiguous buildings, or multiple buildings on
contiguous parcels of land.'';
(B) in the first sentence of subparagraph (F), by
striking ``10 years'' and inserting ``15 years'';
(C) In subparagraph (G)--
(i) by inserting after the period at the
end of the first sentence the following: ``Such
contract may, at the election of the public
housing agency and the owner of the structure,
specify that such contract shall be extended
for renewal terms of up to 15 years each, if
the agency makes the determination required by
this subparagraph and the owner is in
compliance with the terms of the contract.'';
and
(ii) by adding at the end the following:
``A public housing agency may agree to enter
into such a contract at the time it enters into
the initial agreement for a housing assistance
payment contract or at any time thereafter that
is before the expiration of the housing
assistance payment contract.'';
(D) in subparagraph (H), by inserting before the
period at the end of the first sentence the following:
``, except that in the case of a contract unit that has
been allocated low-income housing tax credits and for
which the rent limitation pursuant to such section 42
is less than the amount that would otherwise be
permitted under this subparagraph, the rent for such
unit may, in the sole discretion of a public housing
agency, be established at the higher section 8 rent,
subject only to paragraph (10)(A)'';
(E) in subparagraph (I)(i), by inserting before the
semicolon the following: ``, except that the contract
may provide that the maximum rent permitted for a
dwelling unit shall not be less than the initial rent
for the dwelling unit under the initial housing
assistance payments contract covering the unit''; and
(F) by adding at the end the following new
subparagraphs:
``(L) Use in cooperative housing and elevator
buildings.--A public housing agency may enter into a
housing assistance payments contract under this
paragraph with respect to--
``(i) dwelling units in cooperative
housing; and
``(ii) notwithstanding subsection (c),
dwelling units in a high-rise elevator project,
including such a project that is occupied by
families with children, without review and
approval of the contract by the Secretary.
``(M) Reviews.--
``(i) Subsidy layering.--A subsidy layering
review in accordance with section 102(d) of the
Department of Housing and Urban Development
Reform Act of 1989 (42 U.S.C. 3545(d)) shall
not be required for assistance under this
paragraph in the case of a housing assistance
payments contract for an existing structure, or
if a subsidy layering review has been conducted
by the applicable State or local agency.
``(ii) Environmental review.--A public
housing agency shall not be required to
undertake any environmental review before
entering into a housing assistance payments
contract under this paragraph for an existing
structure, except to the extent such a review
is otherwise required by law or regulation.''.
(2) Voucher program rent reasonableness.--Section 8(o)(10)
of the United States Housing Act of 1937 (42 U.S.C.
1437f(o)(10)) is amended by adding at the end the following new
subparagraph;
``(F) Tax credit projects.--In the case of a
dwelling unit receiving tax credits pursuant to section
42 of the Internal Revenue Code of 1986 or for which
assistance is provided under subtitle A of title II of
the Cranston Gonzalez National Affordable Housing Act
of 1990, for which a housing assistance contract not
subject to paragraph (13) of this subsection is
established, rent reasonableness shall be determined as
otherwise provided by this paragraph, except that--
``(i) comparison with rent for units in the
private, unassisted local market shall not be
required if the rent is equal to or less than
the rent for other comparable units receiving
such tax credits or assistance in the project
that are not occupied by families assisted with
tenant-based assistance under this subsection;
and
``(ii) the rent shall not be considered
reasonable for purposes of this paragraph if it
exceeds the greater of--
``(I) the rents charged for other
comparable units receiving such tax
credits or assistance in the project
that are not occupied by families
assisted with tenant-based assistance
under this subsection; and
``(II) the payment standard
established by the public housing
agency for a unit of the size
involved.''.
(b) Section 202 Housing for Elderly Persons.--Subsection (f) of
section 202 of the Housing Act of 1959 (12 U.S.C. 1701q(f)) is
amended--
(1) by striking ``Selection Criteria.--'' and inserting
``Initial Selection Criteria and Processing.--(1) Selection
criteria.--'';
(2) by redesignating paragraphs (1) through (7) as
subparagraphs (A) through (G), respectively; and
(3) by adding at the end the following new paragraph:
``(2) Delegated Processing.--
``(A) In issuing a capital advance under this subsection
for any project for which financing for the purposes described
in the last two sentences of subsection (b) is provided by a
combination of a capital advance under subsection (c)(1) and
sources other than this section, within 30 days of award of the
capital advance, the Secretary shall delegate review and
processing of such projects to a State or local housing agency
that--
``(i) is in geographic proximity to the property;
``(ii) has demonstrated experience in and capacity
for underwriting multifamily housing loans that provide
housing and supportive services;
``(iii) may or may not be providing low-income
housing tax credits in combination with the capital
advance under this section, and
``(iv) agrees to issue a firm commitment within 12
months of delegation.
``(B) The Secretary shall retain the authority to process
capital advances in cases in which no State or local housing
agency has applied to provide delegated processing pursuant to
this paragraph or no such agency has entered into an agreement
with the Secretary to serve as a delegated processing agency.
``(C) An agency to which review and processing is delegated
pursuant to subparagraph (A) may assess a reasonable fee which
shall be included in the capital advance amounts and may
recommend project rental assistance amounts in excess of those
initially awarded by the Secretary. The Secretary shall develop
a schedule for reasonable fees under this subparagraph to be
paid to delegated processing agencies, which shall take into
consideration any other fees to be paid to the agency for other
funding provided to the project by the agency, including bonds,
tax credits, and other gap funding.
``(D) Under such delegated system, the Secretary shall
retain the authority to approve rents and development costs and
to execute a capital advance within 60 days of receipt of the
commitment from the State or local agency. The Secretary shall
provide to such agency and the project sponsor, in writing, the
reasons for any reduction in capital advance amounts or project
rental assistance and such reductions shall be subject to
appeal.''.
(c) McKinney-Vento Act Homeless Assistance Under Shelter Plus Care
Program.--
(1) Term of contracts with owner or lessor.--Part I of
subtitle F of the McKinney-Vento Homeless Assistance Act is
amended--
(A) by redesignating sections 462 and 463 (42
U.S.C. 11403g, 11403h) as sections 463 and 464,
respectively;
(B) by striking ``section 463'' each place such
term appears in sections 471, 476, 481, 486, and 488
(42 U.S.C. 11404, 11405, 11406, 11407, and 11407b) and
inserting ``section 464''; and
(C) by inserting after section 461 (42 U.S.C.
11403f) the following new section:
``SEC. 462. TERM OF CONTRACT WITH OWNER OR LESSOR.
``An applicant under this subtitle may enter into a contract with
the owner or lessor of a property that receives rental assistance under
this subtitle having a term of not more than 15 years, subject to the
availability of sufficient funds provided in appropriation Acts for the
purpose of renewing expiring contracts for assistance payments. Such
contract may, at the election of the applicant and owner or lessor,
specify that such contract shall be extended for renewal terms of not
more than 15 years each, subject to the availability of sufficient such
appropriated funds.''.
(2) Project-based rental assistance contracts.--Section
478(a) of the McKinney-Vento Homeless Assistance Act (42 U.S.C.
11405a(a)) is amended by inserting before the period at the end
the following: ``; except that, in the case of any project for
which equity is provided through any low-income housing tax
credit pursuant to section 42 of the Internal Revenue Code of
1986 (26 U.S.C. 42), if an expenditure of such amount for each
unit (including the prorated share of such work) is required to
make the structure decent, safe, and sanitary, and the owner
agrees to reach initial closing on permanent financing from
such other sources within two years and agrees to carry out the
rehabilitation with resources other than assistance under this
subtitle within 60 months of notification of grant approval,
the contract shall be for a term of 10 years (except that such
period may be extended by up to 1 year by the Secretary, which
extension shall be granted unless the Secretary determines that
the sponsor is primarily responsible for the failure to meet
such deadline)''.
(d) Data Collection on Tenants of Housing Tax Credit Projects.--
Title I of the United States Housing Act of 1937 (42 U.S.C. 1437 et
seq.) is amended by adding at the end the following new section:
``SEC. 36. COLLECTION OF INFORMATION ON TENANTS IN TAX CREDIT PROJECTS.
``(a) In General.--Each State agency administering tax credits
under section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42)
shall furnish to the Secretary of Housing and Urban Development, not
less than annually, information concerning the race, ethnicity, family
composition, age, income, use of rental assistance under section 8(o)
of the United States Housing Act of 1937 or other similar assistance,
disability status, and monthly rental payments of households residing
in each property receiving such credits through such agency. Such State
agencies shall, to the extent feasible, collect such information
through existing reporting processes and in a manner that minimizes
burdens on property owners. In the case of any household that continues
to reside in the same dwelling unit, information provided by the
household in a previous year may be used if the information is of a
category that is not subject to change or if information for the
current year is not readily available to the owner of the property.
``(b) Standards.--The Secretary shall establish standards and
definitions for the information collected under subsection (a), provide
States with technical assistance in establishing systems to compile and
submit such information, and, in coordination with other Federal
agencies administering housing programs, establish procedures to
minimize duplicative reporting requirements for properties assisted
under multiple housing programs.
``(c) Public Availability.--The Secretary shall, not less than
annually, compile and make publicly available the information submitted
to the Secretary pursuant to subsection (a).
``(d) Authorization of Appropriations.--There is authorized to be
appropriated for the cost of activities required under subsections (b)
and (c) $2,500,000 for fiscal year 2009 and $900,000 for each of fiscal
years 2010 through 2013.''.
Subtitle E--Limitation on Sale, Foreclosure, or Seizure of Property
Owned by Servicemembers
SEC. 661. LIMITATION ON SALE, FORECLOSURE, OR SEIZURE OF PROPERTY OWNED
BY SERVICEMEMBERS DURING ONE-YEAR PERIOD FOLLOWING PERIOD
OF MILITARY SERVICE.
(a) Limitation.--Section 303(c) of the Servicemembers Civil Relief
Act is amended by striking ``90 days'' and inserting ``one year''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply with respect to any sale, foreclosure, or seizure of property on
or after the date of the enactment of this Act.
SEC. 662. PROVISION OF FINANCIAL DISCLOSURE TO SERVICEMEMBERS WHO
DEFAULT ON CERTAIN OBLIGATIONS.
(a) Provision of Disclosure Required.--Section 303 of the
Servicemembers Civil Relief Act (50 U.S.C. App. 533) is amended by
adding at the end the following new subsection:
``(e) Provision of Financial Disclosure.--In the case of a
servicemember who defaults on an obligation described in subsection (a)
for two consecutive months, the mortgagor or loan servicer of the
obligation shall provide to the servicemember a written financial
disclosure describing the servicemember's liability with respect to the
obligation for the period during which a sale, foreclosure, or seizure
of the property is not valid under subsection (c).''.
(b) Effective Date.--Subsection (e) of section 303 of the
Servicemembers Civil Relief Act (50 U.S.C. App. 533), as added by
subsection (a), shall apply with respect to a servicemember who
defaults on an obligation on or after the date of the enactment of this
Act.
(3)At the appropriate place, insert the following new section:
SEC. __. RULE OF CONSTRUCTION.
(a) In General.--No provision of this Act, the Home Owners' Loan
Act, or title LXII of the Revised Statutes of the United States
(commonly referred to as the ``National Bank Act'') may be construed as
preempting the application, to any entity, of any State law regulating
the foreclosure of residential real property in that State or the
treatment of foreclosed property.
(b) No Negative Implication.--This section shall not be construed
as affecting in any way the applicability of any other type of State
law to any Federal depository institution (as defined in section
3(c)(4) of the Federal Deposit Insurance Act) or to any agent or
subsidiary of any such depository institution.
Attest:
Clerk.
110th CONGRESS
2d Session
H.R. 3221
_______________________________________________________________________
HOUSE AMENDMENTS TO SENATE AMENDMENTS