[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3221 Engrossed Amendment Senate (EAS)]

  
  
  
  
  
  
  
  
  
  

                  In the Senate of the United States,

                                                         July 11, 2008.
    Resolved, That on June 25, 2008, the Senate concurs in the House 
amendment, striking section 1 through title V and inserting certain 
language, to the Senate amendment to 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.'', with an amendment

       SENATE AMENDMENT TO HOUSE AMENDMENTS TO SENATE AMENDMENT:

            In lieu of the matter proposed to be inserted, insert the 
      following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Housing and 
Economic Recovery Act of 2008''.
    (b) Table of Content.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

                   DIVISION A--HOUSING FINANCE REFORM

Sec. 1001. Short title.
Sec. 1002. Definitions.

              TITLE I--REFORM OF REGULATION OF ENTERPRISES

      Subtitle A--Improvement of Safety and Soundness Supervision

Sec. 1101. Establishment of the Federal Housing Finance Agency.
Sec. 1102. Duties and authorities of the Director.
Sec. 1103. Federal Housing Finance Oversight Board.
Sec. 1104. Authority to require reports by regulated entities.
Sec. 1105. Examiners and accountants; authority to contract for reviews 
                            of regulated entities; ombudsman.
Sec. 1106. Assessments.
Sec. 1107. Regulations and orders.
Sec. 1108. Prudential management and operations standards.
Sec. 1109. Review of and authority over enterprise assets and 
                            liabilities.
Sec. 1110. Risk-based capital requirements.
Sec. 1111. Minimum capital levels.
Sec. 1112. Registration under the securities laws.
Sec. 1113. Prohibition and withholding of executive compensation.
Sec. 1114. Limit on golden parachutes.
Sec. 1115. Reporting of fraudulent loans.

             Subtitle B--Improvement of Mission Supervision

Sec. 1121. Transfer of program approval and housing goal oversight.
Sec. 1122. Assumption by the Director of certain other HUD 
                            responsibilities.
Sec. 1123. Review of enterprise products.
Sec. 1124. Conforming loan limits.
Sec. 1125. Annual housing report.
Sec. 1126. Public use database.
Sec. 1127. Reporting of mortgage data.
Sec. 1128. Revision of housing goals.
Sec. 1129. Duty to serve underserved markets.
Sec. 1130. Monitoring and enforcing compliance with housing goals.
Sec. 1131. Affordable housing programs.
Sec. 1132. Financial education and counseling.
Sec. 1133. Transfer and rights of certain HUD employees.

                  Subtitle C--Prompt Corrective Action

Sec. 1141. Critical capital levels.
Sec. 1142. Capital classifications.
Sec. 1143. Supervisory actions applicable to undercapitalized regulated 
                            entities.
Sec. 1144. Supervisory actions applicable to significantly 
                            undercapitalized regulated entities.
Sec. 1145. Authority over critically undercapitalized regulated 
                            entities.

                    Subtitle D--Enforcement Actions

Sec. 1151. Cease and desist proceedings.
Sec. 1152. Temporary cease and desist proceedings.
Sec. 1153. Removal and prohibition authority.
Sec. 1154. Enforcement and jurisdiction.
Sec. 1155. Civil money penalties.
Sec. 1156. Criminal penalty.
Sec. 1157. Notice after separation from service.
Sec. 1158. Subpoena authority.

                     Subtitle E--General Provisions

Sec. 1161. Conforming and technical amendments.
Sec. 1162. Presidentially-appointed directors of enterprises.
Sec. 1163. Effective date.

                   TITLE II--FEDERAL HOME LOAN BANKS

Sec. 1201. Recognition of distinctions between the enterprises and the 
                            Federal Home Loan Banks.
Sec. 1202. Directors.
Sec. 1203. Definitions.
Sec. 1204. Agency oversight of Federal Home Loan Banks.
Sec. 1205. Housing goals.
Sec. 1206. Community development financial institutions.
Sec. 1207. Sharing of information among Federal Home Loan Banks.
Sec. 1208. Exclusion from certain requirements.
Sec. 1209. Voluntary mergers.
Sec. 1210. Authority to reduce districts.
Sec. 1211. Community financial institution members.
Sec. 1212. Public use database; reports to Congress.
Sec. 1213. Semiannual reports.
Sec. 1214. Liquidation or reorganization of a Federal Home Loan Bank.
Sec. 1215. Study and report to Congress on securitization of acquired 
                            member assets.
Sec. 1216. Technical and conforming amendments.
Sec. 1217. Study on Federal Home Loan Bank advances.
Sec. 1218. Federal Home Loan Bank refinancing authority for certain 
                            residential mortgage loans.

TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND 
                   THE FEDERAL HOUSING FINANCE BOARD

                           Subtitle A--OFHEO

Sec. 1301. Abolishment of OFHEO.
Sec. 1302. Continuation and coordination of certain actions.
Sec. 1303. Transfer and rights of employees of OFHEO.
Sec. 1304. Transfer of property and facilities.

               Subtitle B--Federal Housing Finance Board

Sec. 1311. Abolishment of the Federal Housing Finance Board.
Sec. 1312. Continuation and coordination of certain actions.
Sec. 1313. Transfer and rights of employees of the Federal Housing 
                            Finance Board.
Sec. 1314. Transfer of property and facilities.

                     TITLE IV--HOPE FOR HOMEOWNERS

Sec. 1401. Short title.
Sec. 1402. Establishment of HOPE for Homeowners Program.
Sec. 1403. Fiduciary duty of servicers of pooled residential mortgage 
                            loans.
Sec. 1404. Revised standards for FHA appraisers.

                TITLE V--S.A.F.E. MORTGAGE LICENSING ACT

Sec. 1501. Short title.
Sec. 1502. Purposes and methods for establishing a mortgage licensing 
                            system and registry.
Sec. 1503. Definitions.
Sec. 1504. License or registration required.
Sec. 1505. State license and registration application and issuance.
Sec. 1506. Standards for State license renewal.
Sec. 1507. System of registration administration by Federal agencies.
Sec. 1508. Secretary of Housing and Urban Development backup authority 
                            to establish a loan originator licensing 
                            system.
Sec. 1509. Backup authority to establish a nationwide mortgage 
                            licensing and registry system.
Sec. 1510. Fees.
Sec. 1511. Background checks of loan originators.
Sec. 1512. Confidentiality of information.
Sec. 1513. Liability provisions.
Sec. 1514. Enforcement under HUD backup licensing system.
Sec. 1515. State examination authority.
Sec. 1516. Reports and recommendations to Congress.
Sec. 1517. Study and reports on defaults and foreclosures.

                        TITLE VI--MISCELLANEOUS

Sec. 1601. Study and reports on guarantee fees.
Sec. 1602. Study and report on default risk evaluation.
Sec. 1603. Conversion of HUD contracts.
Sec. 1604. Bridge depository institutions.
Sec. 1605. Sense of the Senate.

                   DIVISION B--FORECLOSURE PREVENTION

Sec. 2001. Short title.
Sec. 2002. Emergency designation.

                 TITLE I--FHA MODERNIZATION ACT OF 2008

Sec. 2101. Short title.

              Subtitle A--Building American Homeownership

Sec. 2111. Short title.
Sec. 2112. Maximum principal loan obligation.
Sec. 2113. Cash investment requirement and prohibition of seller-funded 
                            down payment assistance.
Sec. 2114. Mortgage insurance premiums.
Sec. 2115. Rehabilitation loans.
Sec. 2116. Discretionary action.
Sec. 2117. Insurance of condominiums.
Sec. 2118. Mutual Mortgage Insurance Fund.
Sec. 2119. Hawaiian home lands and Indian reservations.
Sec. 2120. Conforming and technical amendments.
Sec. 2121. Insurance of mortgages.
Sec. 2122. Home equity conversion mortgages.
Sec. 2123. Energy efficient mortgages program.
Sec. 2124. Pilot program for automated process for borrowers without 
                            sufficient credit history.
Sec. 2125. Homeownership preservation.
Sec. 2126. Use of FHA savings for improvements in FHA technologies, 
                            procedures, processes, program performance, 
                            staffing, and salaries.
Sec. 2127. Post-purchase housing counseling eligibility improvements.
Sec. 2128. Pre-purchase homeownership counseling demonstration.
Sec. 2129. Fraud prevention.
Sec. 2130. Limitation on mortgage insurance premium increases.
Sec. 2131. Savings provision.
Sec. 2132. Implementation.
Sec. 2133. Moratorium on implementation of risk-based premiums.

          Subtitle B--Manufactured Housing Loan Modernization

Sec. 2141. Short title.
Sec. 2142. Purposes.
Sec. 2143. Exception to limitation on financial institution portfolio.
Sec. 2144. Insurance benefits.
Sec. 2145. Maximum loan limits.
Sec. 2146. Insurance premiums.
Sec. 2147. Technical corrections.
Sec. 2148. Revision of underwriting criteria.
Sec. 2149. Prohibition against kickbacks and unearned fees.
Sec. 2150. Leasehold requirements.

     TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

Sec. 2201. Temporary increase in maximum loan guaranty amount for 
                            certain housing loans guaranteed by the 
                            Secretary of Veterans Affairs.
Sec. 2202. Counseling on mortgage foreclosures for members of the Armed 
                            Forces returning from service abroad.
Sec. 2203. Enhancement of protections for servicemembers relating to 
                            mortgages and mortgage foreclosures.

TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND 
                            FORECLOSED HOMES

Sec. 2301. Emergency assistance for the redevelopment of abandoned and 
                            foreclosed homes.
Sec. 2302. Nationwide distribution of resources.
Sec. 2303. Limitation on use of funds with respect to eminent domain.
Sec. 2304. Limitation on distribution of funds.
Sec. 2305. Counseling intermediaries.

                 TITLE IV--HOUSING COUNSELING RESOURCES

Sec. 2401. Housing counseling resources.
Sec. 2402. Credit counseling.

              TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

Sec. 2501. Short title.
Sec. 2502. Enhanced mortgage loan disclosures.
Sec. 2503. Community development investment authority for depository 
                            institutions.

                   TITLE VI--VETERANS HOUSING MATTERS

Sec. 2601. Home improvements and structural alterations for totally 
                            disabled members of the Armed Forces before 
                            discharge or release from the Armed Forces.
Sec. 2602. Eligibility for specially adapted housing benefits and 
                            assistance for members of the Armed Forces 
                            with service-connected disabilities and 
                            individuals residing outside the United 
                            States.
Sec. 2603. Specially adapted housing assistance for individuals with 
                            severe burn injuries.
Sec. 2604. Extension of assistance for individuals residing temporarily 
                            in housing owned by a family member.
Sec. 2605. Increase in specially adapted housing benefits for disabled 
                            veterans.
Sec. 2606. Report on specially adapted housing for disabled 
                            individuals.
Sec. 2607. Report on specially adapted housing assistance for 
                            individuals who reside in housing owned by 
                            a family member on permanent basis.
Sec. 2608. Definition of annual income for purposes of section 8 and 
                            other public housing programs.
Sec. 2609. Payment of transportation of baggage and household effects 
                            for members of the Armed Forces who 
                            relocate due to foreclosure of leased 
                            housing.

  TITLE VII--SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK REDUCTION ACT

Sec. 2701. Short title.
Sec. 2702. Public housing agency plans for certain qualified public 
                            housing agencies.

            TITLE VIII--FORECLOSURE RESCUE FRAUD PROTECTION

Sec. 2801. Short title.
Sec. 2802. Definitions.
Sec. 2803. Mortgage rescue fraud protection.
Sec. 2804. Warnings to homeowners of foreclosure rescue scams.
Sec. 2805. Civil liability.
Sec. 2806. Administrative enforcement.
Sec. 2807. Limitation.
Sec. 2808. Preemption.

                   DIVISION C--TAX-RELATED PROVISIONS

Sec. 3000. Short title; etc.

                    TITLE I--HOUSING TAX INCENTIVES

                    Subtitle A--Multi-Family Housing

                 PART I--Low-Income Housing Tax Credit

Sec. 3001. Temporary increase in volume cap for low-income housing tax 
                            credit.
Sec. 3002. Determination of credit rate.
Sec. 3003. Modifications to definition of eligible basis.
Sec. 3004. Other simplification and reform of low-income housing tax 
                            incentives.
Sec. 3005. Treatment of military basic pay.

        PART II--Modifications to Tax-Exempt Housing Bond Rules

Sec. 3007. Recycling of tax-exempt debt for financing residential 
                            rental projects.
Sec. 3008. Coordination of certain rules applicable to low-income 
                            housing credit and qualified residential 
                            rental project exempt facility bonds.

  PART III--Reforms Related to the Low-Income Housing Credit and Tax-
                          Exempt Housing Bonds

Sec. 3009. Hold harmless for reductions in area median gross income.
Sec. 3010. Exception to annual current income determination requirement 
                            where determination not relevant.

                   Subtitle B--Single Family Housing

Sec. 3011. First-time homebuyer credit.
Sec. 3012. Additional standard deduction for real property taxes for 
                            nonitemizers.

                     Subtitle C--General Provisions

Sec. 3021. Temporary liberalization of tax-exempt housing bond rules.
Sec. 3022. Repeal of alternative minimum tax limitations on tax-exempt 
                            housing bonds, low-income housing tax 
                            credit, and rehabilitation credit.
Sec. 3023. Bonds guaranteed by Federal home loan banks eligible for 
                            treatment as tax-exempt bonds.
Sec. 3024. Modification of rules pertaining to FIRPTA nonforeign 
                            affidavits.
Sec. 3025. Modification of definition of tax-exempt use property for 
                            purposes of the rehabilitation credit.
Sec. 3026. Extension of special rule for mortgage revenue bonds for 
                            residences located in disaster areas.

       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

      Subtitle A--Foreign Currency and Other Qualified Activities

Sec. 3031. Revisions to REIT income tests.
Sec. 3032. Revisions to REIT asset tests.
Sec. 3033. Conforming foreign currency revisions.

                 Subtitle B--Taxable REIT Subsidiaries

Sec. 3041. Conforming taxable REIT subsidiary asset test.

                        Subtitle C--Dealer Sales

Sec. 3051. Holding period under safe harbor.
Sec. 3052. Determining value of sales under safe harbor.

                     Subtitle D--Health Care REITs

Sec. 3061. Conformity for health care facilities.

                      Subtitle E--Effective Dates

Sec. 3071. Effective dates.

                     TITLE III--REVENUE PROVISIONS

                     Subtitle A--General Provisions

Sec. 3081. Election to accelerate amt and r and d credits in lieu of 
                            bonus depreciation.
Sec. 3082. Certain GO Zone incentives.

                      Subtitle B--Revenue Offsets

Sec. 3091. Returns relating to payments made in settlement of payment 
                            card and third party network transactions.
Sec. 3092. Gain from sale of principal residence allocated to 
                            nonqualified use not excluded from income.
Sec. 3093. Increase in information return penalties.
Sec. 3094. Increase in penalty for failure to file S corporation 
                            returns.
Sec. 3095. Increase in penalty for failure to file partnership returns.
Sec. 3096. Increase in minimum penalty on failure to file a return of 
                            tax.

                   DIVISION A--HOUSING FINANCE REFORM

SEC. 1001. SHORT TITLE.

    This division may be cited as the ``Federal Housing Finance 
Regulatory Reform Act of 2008''.

SEC. 1002. DEFINITIONS.

    (a) Federal Safety and Soundness Act Definitions.--Section 1303 of 
the Federal Housing Enterprises Financial Safety and Soundness Act of 
1992 (12 U.S.C. 4502) is amended--
            (1) in each of paragraphs (8), (9), (10), and (19), by 
        striking ``Secretary'' each place that term appears and 
        inserting ``Director'';
            (2) by redesignating paragraphs (16) through (19) as 
        paragraphs (21) through (24), respectively;
            (3) by striking paragraphs (13) through (15) and inserting 
        the following:
            ``(19) Office of finance.--The term `Office of Finance' 
        means the Office of Finance of the Federal Home Loan Bank 
        System (or any successor thereto).
            ``(20) 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) any Federal Home Loan Bank.'';
            (4) by redesignating paragraphs (11) and (12) as paragraphs 
        (17) and (18), respectively;
            (5) by redesignating paragraph (7) as paragraph (12);
            (6) by redesignating paragraphs (8) through (10) as 
        paragraphs (14) through (16), respectively;
            (7) in paragraph (5)--
                    (A) by striking ``(5)'' and inserting ``(9)''; and
                    (B) by striking ``Office of Federal Housing 
                Enterprise Oversight of the Department of Housing and 
                Urban Development'' and inserting ``Federal Housing 
                Finance Agency'';
            (8) by redesignating paragraph (6) as paragraph (10);
            (9) by redesignating paragraphs (2) through (4) as 
        paragraphs (5) through (7), respectively;
            (10) by inserting after paragraph (7), as redesignated, the 
        following:
            ``(8) Default; in danger of default.--
                    ``(A) Default.--The term `default' means, with 
                respect to a regulated entity, any adjudication or 
                other official determination by any court of competent 
                jurisdiction, or the Agency, pursuant to which a 
                conservator, receiver, limited-life regulated entity, 
                or legal custodian is appointed for a regulated entity.
                    ``(B) In danger of default.--The term `in danger of 
                default' means a regulated entity with respect to 
                which, in the opinion of the Agency--
                            ``(i) the regulated entity is not likely to 
                        be able to pay the obligations of the regulated 
                        entity in the normal course of business; or
                            ``(ii) the regulated entity--
                                    ``(I) has incurred or is likely to 
                                incur losses that will deplete all or 
                                substantially all of its capital; and
                                    ``(II) there is no reasonable 
                                prospect that the capital of the 
                                regulated entity will be 
                                replenished.'';
            (11) by inserting after paragraph (1) the following:
            ``(2) Agency.--The term `Agency' means the Federal Housing 
        Finance Agency established under section 1311.
            ``(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 
        Finance Oversight Board established under section 1313A.'';
            (12) by inserting after paragraph (10), as redesignated by 
        this section, the following:
            ``(11) Entity-affiliated party.--The term `entity-
        affiliated party' means--
                    ``(A) any director, officer, employee, or 
                controlling stockholder of, or agent for, a regulated 
                entity;
                    ``(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, provided that a member of a Federal 
                Home Loan Bank shall not be deemed to have participated 
                in the affairs of that Bank solely by virtue of being a 
                shareholder of, and obtaining advances from, that Bank;
                    ``(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;
                    ``(D) any not-for-profit corporation that receives 
                its principal funding, on an ongoing basis, from any 
                regulated entity; and
                    ``(E) the Office of Finance.'';
            (13) by inserting after paragraph (12), as redesignated by 
        this section, the following:
            ``(13) Limited-life regulated entity.--The term `limited-
        life regulated entity' means an entity established by the 
        Agency under section 1367(i) with respect to a Federal Home 
        Loan Bank in default or in danger of default or with respect to 
        an enterprise in default or in danger of default.''; and
            (14) by adding at the end the following:
            ``(25) Violation.--The term `violation' includes any action 
        (alone or in combination with another or others) for or toward 
        causing, bringing about, participating in, counseling, or 
        aiding or abetting a violation.''.
    (b) References in This Act.--As used in this Act, unless otherwise 
specified--
            (1) the term ``Agency'' means the Federal Housing Finance 
        Agency;
            (2) the term ``Director'' means the Director of the Agency; 
        and
            (3) the terms ``enterprise'', ``regulated entity'', and 
        ``authorizing statutes'' have the same meanings as in section 
        1303 of the Federal Housing Enterprises Financial Safety and 
        Soundness Act of 1992, as amended by this Act.

              TITLE I--REFORM OF REGULATION OF ENTERPRISES

      Subtitle A--Improvement of Safety and Soundness Supervision

SEC. 1101. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.

    The Federal Housing Enterprises Financial Safety and Soundness 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, the federal 
        home loan banks, and the office of finance.--The Director shall 
        have general regulatory authority over each regulated entity 
        and the Office of Finance, and shall exercise such general 
        regulatory authority, including such duties and authorities set 
        forth under section 1313, to ensure that the purposes of this 
        Act, the authorizing statutes, and any other applicable law are 
        carried out.
    ``(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 under 
subsection (b).

``SEC. 1312. DIRECTOR.

    ``(a) Establishment of Position.--There is established the position 
of the Director of the 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.--The Director shall be appointed for a term of 
        5 years, unless removed before the end of such term for cause 
        by the President.
            ``(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), during the period beginning on the effective date 
        of the Federal Housing Finance Regulatory Reform Act of 2008, 
        and ending on the date on which the Director is appointed and 
        confirmed, the person serving as the Director of the Office of 
        Federal Housing Enterprise Oversight of the Department of 
        Housing and Urban Development on that effective date shall act 
        for all purposes as, and with the full powers of, the Director.
    ``(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 
        designated by the Director 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 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 designated by the Director 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 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 Mission and Goals.--
            ``(1) In general.--The Agency shall have a Deputy Director 
        for Housing Mission and Goals, who shall be designated 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.
            ``(2) Functions.--The Deputy Director for Housing Mission 
        and Goals 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.
            ``(3) Considerations.--In exercising such functions, 
        powers, and duties, the Deputy Director for Housing Mission and 
        Goals shall consider the differences between the enterprises 
        and the Federal Home Loan Banks, including those described in 
        section 1313(f).
    ``(f) Acting Director.--In the event of the death, resignation, 
sickness, or absence of the Director, the President shall designate 
either the Deputy Director of the Division of Enterprise Regulation, 
the Deputy Director of the Division of Federal Home Loan Bank 
Regulation, or the Deputy Director for Housing Mission and Goals, to 
serve as acting Director until the return of the Director, or the 
appointment of a successor pursuant to subsection (b).
    ``(g) Limitations.--The Director and each of the Deputy Directors 
may not--
            ``(1) have any direct or indirect financial interest in any 
        regulated entity or entity-affiliated party;
            ``(2) hold any office, position, or employment in any 
        regulated entity or entity-affiliated party; or
            ``(3) have served as an executive officer or director of 
        any regulated entity or entity-affiliated party at any time 
        during the 3-year period preceding the date of appointment or 
        designation of such individual as Director or Deputy Director, 
        as applicable.''.

SEC. 1102. DUTIES AND AUTHORITIES OF THE DIRECTOR.

    (a) In General.--Section 1313 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4513) is amended 
to read as follows:

``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.

    ``(a) Duties.--
            ``(1) Principal duties.--The principal duties of the 
        Director shall be--
                    ``(A) to oversee the prudential operations of each 
                regulated entity; 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 (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;
                            ``(iv) each regulated entity carries out 
                        its statutory mission only through activities 
                        that are authorized under and consistent with 
                        this title and the authorizing statutes; and
                            ``(v) the activities of each regulated 
                        entity and the manner in which such regulated 
                        entity is operated are consistent with the 
                        public interest.
            ``(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 a 
                regulated entity; 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 and employees of the Agency 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.
            ``(2) 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 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.''.
    (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. 1103. FEDERAL HOUSING FINANCE OVERSIGHT BOARD.

    (a) In General.--The Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by 
inserting after section 1313 the following:

``SEC. 1313A. FEDERAL HOUSING FINANCE OVERSIGHT BOARD.

    ``(a) In General.--There is established the Federal Housing Finance 
Oversight 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 4 members, of 
whom--
            ``(1) 1 member shall be the Secretary of the Treasury;
            ``(2) 1 member shall be the Secretary of Housing and Urban 
        Development;
            ``(3) 1 member shall be the Chairman of the Securities and 
        Exchange Commission; and
            ``(4) 1 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, the Secretary of Housing and Urban Development, or 
        the Chairman of the Securities and Exchange Commission 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 Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4521(a)) is amended--
            (1) by striking ``enterprise'' each place that term appears 
        and inserting ``regulated entity'';
            (2) by striking ``enterprises'' each place that term 
        appears and inserting ``regulated entities'';
            (3) in paragraph (3), by striking ``; and'' and inserting a 
        semicolon;
            (4) in paragraph (4), by striking ``1994.'' and inserting 
        ``1994; and''; and
            (5) by adding at the end the following:
            ``(5) the 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 respective 
                missions;
            ``(6) operations, resources, and performance of the Agency; 
        and
            ``(7) such other matters relating to the Agency and the 
        fulfillment of its mission.''.

SEC. 1104. AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTITIES.

    (a) In General.--Section 1314 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4514) is 
amended--
            (1) in the section heading, by striking ``enterprises'' and 
        inserting ``regulated entities'';
            (2) by striking ``an enterprise'' each place that term 
        appears and inserting ``a regulated entity'';
            (3) by striking ``the enterprise'' and inserting ``the 
        regulated entity'';
            (4) in subsection (a)--
                    (A) by striking the subsection heading and all that 
                follows through ``and operations'' in paragraph (1) and 
                inserting the following:
    ``(a) Regular and Special Reports.--
            ``(1) Regular reports.--The Director may require, by 
        general or specific orders, a regulated entity to submit 
        regular reports, including financial statements determined on a 
        fair value basis, on the condition (including financial 
        condition), management, activities, or operations of the 
        regulated entity, as the Director considers appropriate''; and
                    (B) in paragraph (2)--
                            (i) by inserting ``, by general or specific 
                        orders,'' after ``may also require''; and
                            (ii) by striking ``whenever'' and inserting 
                        ``on any of the topics specified in paragraph 
                        (1) or any other relevant topics, if''; and
            (5) by adding at the end the following:
    ``(c) Penalties for Failure To Make Reports.--
            ``(1) Violations.--It shall be a violation of this section 
        for any regulated entity--
                    ``(A) to fail to make, transmit, or publish any 
                report or obtain any information required by the 
                Director under this section, section 309(k) of the 
                Federal National Mortgage Association Charter Act, 
                section 307(c) of the Federal Home Loan Mortgage 
                Corporation Act, or section 20 of the Federal Home Loan 
                Bank Act, within the period of time specified in such 
                provision of law or otherwise by the Director; or
                    ``(B) to submit or publish any false or misleading 
                report or information under this section.
            ``(2) Penalties.--
                    ``(A) First tier.--
                            ``(i) In general.--A violation described in 
                        paragraph (1) shall be subject to a penalty of 
                        not more than $2,000 for each day during which 
                        such violation continues, in any case in 
                        which--
                                    ``(I) the subject regulated entity 
                                maintains procedures reasonably adapted 
                                to avoid any inadvertent error and the 
                                violation was unintentional and a 
                                result of such an error; or
                                    ``(II) the violation was an 
                                inadvertent transmittal or publication 
                                of any report which was minimally late.
                            ``(ii) Burden of proof.--For purposes of 
                        this subparagraph, the regulated entity shall 
                        have the burden of proving that the error was 
                        inadvertent or that a report was inadvertently 
                        transmitted or published late.
                    ``(B) Second tier.--A violation described in 
                paragraph (1) shall be subject to a penalty of not more 
                than $20,000 for each day during which such violation 
                continues or such false or misleading information is 
                not corrected, in any case that is not addressed in 
                subparagraph (A) or (C).
                    ``(C) Third tier.--A violation described in 
                paragraph (1) shall be subject to a penalty of not more 
                than $1,000,000 per day for each day during which such 
                violation continues or such false or misleading 
                information is not corrected, in any case in which the 
                subject regulated entity committed such violation 
                knowingly or with reckless disregard for the accuracy 
                of any such information or report.
            ``(3) Assessments.--Any penalty imposed under this 
        subsection shall be in lieu of a penalty under section 1376, 
        but shall be assessed and collected by the Director in the 
        manner provided in section 1376 for penalties imposed under 
        that section, and any such assessment (including the 
        determination of the amount of the penalty) shall be otherwise 
        subject to the provisions of section 1376.
            ``(4) Hearing.--A regulated entity against which a penalty 
        is assessed under this section shall be afforded an agency 
        hearing if the regulated entity submits a request for a hearing 
        not later than 20 days after the date of the issuance of the 
        notice of assessment. Section 1374 shall apply to any such 
        proceedings.''.
    (b) Conforming Amendment.--The Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 
amended by striking sections 1327 and 1328.

SEC. 1105. EXAMINERS AND ACCOUNTANTS; AUTHORITY TO CONTRACT FOR REVIEWS 
              OF REGULATED ENTITIES; OMBUDSMAN.

    (a) In General.--Section 1317 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4517) is 
amended--
            (1) in subsection (a), by striking ``enterprise'' each 
        place that term appears and inserting ``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'';
            (3) in subsection (c), in the second sentence, by inserting 
        before the period ``to conduct examinations under this 
        section'';
            (4) by redesignating subsections (d) through (f) as 
        subsections (e) through (g), respectively; and
            (5) by inserting after subsection (c) the following:
    ``(d) Inspector General.--There shall be within the Agency an 
Inspector General, who shall be appointed in accordance with section 
3(a) of the Inspector General Act of 1978.''.
    (b) Direct Hire Authority To Hire Accountants, Economists, and 
Examiners.--Section 1317 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4517) is amended by adding 
at the end the following:
    ``(h) Appointment of Accountants, Economists, and Examiners.--
            ``(1) Applicability.--This section shall apply with respect 
        to any position of examiner, accountant, economist, and 
        specialist in financial markets and in technology 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.''.
    (c) Amendments to Inspector General Act.--Section 11 of the 
Inspector General Act of 1978 (5 U.S.C. App.) is amended--
            (1) in paragraph (1), by inserting ``; the Director of the 
        Federal Housing Finance Agency'' after ``Social Security 
        Administration''; and
            (2) in paragraph (2), by inserting ``, the Federal Housing 
        Finance Agency'' after ``Social Security Administration''.
    (d) Authority To Contract for Reviews of Regulated Entities.--
Section 1319 of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (12 U.S.C. 4519) is amended--
            (1) in the section heading, by striking ``enterprises by 
        rating organization'' and inserting ``regulated entities''; and
            (2) by striking ``enterprises'' and inserting ``regulated 
        entities''.
    (e) Office of the Ombudsman.--Section 1317 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4517) 
is amended by adding at the end the following:
    ``(i) Ombudsman.--The Director shall establish, by regulation, an 
Office of the Ombudsman within the Agency, which shall be responsible 
for considering complaints and appeals, from any regulated entity and 
any person that has a business relationship with a regulated entity, 
regarding any matter relating to the regulation and supervision of such 
regulated entity by the Agency. The regulation issued by the Director 
under this subsection shall specify the authority and duties of the 
Office of the Ombudsman.''.

SEC. 1106. ASSESSMENTS.

    Section 1316 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4516) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(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 
(including administrative 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 windup of the affairs of the Office of Federal 
        Housing Enterprise Oversight and the Federal Housing Finance 
        Board under title III of the Federal Housing Finance Regulatory 
        Reform Act of 2008.'';
            (2) in subsection (b)--
                    (A) by realigning the margins of paragraph (2) two 
                ems from the left, so as to align the left margin of 
                such paragraph with the left margins of paragraph (1);
                    (B) by redesignating paragraphs (2) and (3) as 
                paragraphs (3) and (4), respectively; and
                    (C) by inserting after paragraph (1) the following:
            ``(2) Separate treatment of federal home loan bank and 
        enterprise assessments.--Assessments collected from the 
        enterprises shall not exceed the amounts sufficient to provide 
        for the costs and expenses described in subsection (a) relating 
        to the enterprises. Assessments collected from the Federal Home 
        Loan Banks shall not exceed the amounts sufficient to provide 
        for the costs and expenses described in subsection (a) relating 
        to the Federal Home Loan Banks.'';
            (3) by striking subsection (c) and inserting the following:
    ``(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:
    ``(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 
        of the United States (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 of the Federal Housing Finance Regulatory 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 
                amounts 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 the 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--
                    ``(A) assets and liabilities and surplus or 
                deficit;
                    ``(B) income and expenses; and
                    ``(C) sources and application of funds.
            ``(3) Financial management systems.--The Agency shall 
        implement and maintain financial management systems that--
                    ``(A) comply substantially with Federal financial 
                management systems requirements and applicable Federal 
                accounting standards; and
                    ``(B) use 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 of the United States 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 report, plan, forecast, 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 United States 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 3709 of the Revised Statutes of the 
        United States (41 U.S.C. 5), 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. 1107. REGULATIONS AND ORDERS.

    Section 1319G of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4526) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Authority.--The Director shall issue any regulations, 
guidelines, or orders necessary to carry out the duties of the Director 
under this title or the authorizing statutes, and to ensure that the 
purposes of this title and the authorizing statutes are 
accomplished.''; and
            (2) by striking subsection (c).

SEC. 1108. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

    The Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4501 et seq.) is amended by inserting after section 
1313A, as added by this Act, the following new section:

``SEC. 1313B. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

    ``(a) Standards.--The Director shall establish standards, by 
regulation or guideline, for each regulated entity relating to--
            ``(1) adequacy of internal controls and information systems 
        taking into account the nature and scale of business 
        operations;
            ``(2) independence and adequacy of internal audit systems;
            ``(3) management of interest rate risk exposure;
            ``(4) 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;
            ``(5) adequacy and maintenance of liquidity and reserves;
            ``(6) management of asset and investment portfolio growth;
            ``(7) investments and acquisitions of assets by a regulated 
        entity, to ensure that they are consistent with the purposes of 
        this title and the authorizing statutes;
            ``(8) 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;
            ``(9) 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;
            ``(10) 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; and
            ``(11) 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.''.

SEC. 1109. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND 
              LIABILITIES.

    (a) In General.--Subtitle B of the Federal Housing Enterprises 
Financial Safety and Soundness 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 
criteria governing the portfolio holdings of the enterprises, to ensure 
that the holdings are backed by sufficient capital and consistent with 
the mission and the safe and sound operations of the enterprises. In 
establishing such criteria, the Director shall consider the ability of 
the enterprises to provide a liquid secondary market through 
securitization activities, the portfolio holdings in relation to the 
overall mortgage market, and adherence to the standards specified in 
section 1313B.
    ``(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 of this Act, the Director shall 
issue regulations pursuant to section 1369E(a) of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (as added by 
subsection (a) of this section) establishing the portfolio holdings 
standards under such section.

SEC. 1110. RISK-BASED CAPITAL REQUIREMENTS.

    (a) In General.--Section 1361 of the Federal Housing Enterprises 
Financial Safety and Soundness 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) 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:
                    ``(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. 1111. MINIMUM CAPITAL LEVELS.

    Section 1362 of the Federal Housing Enterprises Financial Safety 
and Soundness 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:
    ``(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.--
            ``(1) In general.--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, when the Director determines that such an increase is 
        necessary and consistent with the prudential regulation and the 
        safe and sound operations of a regulated entity.
            ``(2) Rescission.--The Director shall rescind any temporary 
        minimum capital level established under paragraph (1) when the 
        Director determines that the circumstances or facts no longer 
        justify the temporary minimum capital level.
            ``(3) Regulations required.--The Director shall issue 
        regulations establishing--
                    ``(A) standards for the imposition of a temporary 
                increase in minimum capital under paragraph (1);
                    ``(B) the standards and procedures that the 
                Director will use to make the determination referred to 
                in paragraph (2); and
                    ``(C) a reasonable time frame for periodic review 
                of any temporary increase in minimum capital for the 
                purpose of making the determination referred to in 
                paragraph (2).
    ``(e) Authority To Establish Additional Capital and Reserve 
Requirements for Particular Purposes.--The Director may, at any time by 
order or regulation, establish such capital or reserve requirements 
with respect to any product 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.''.

SEC. 1112. REGISTRATION UNDER THE SECURITIES LAWS.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by adding at the end the following:

``SEC. 38. FEDERAL NATIONAL MORTGAGE ASSOCIATION, FEDERAL HOME LOAN 
              MORTGAGE CORPORATION, FEDERAL HOME LOAN BANKS.

    ``(a) Federal National Mortgage Association and Federal Home Loan 
Mortgage Corporation.--No class of equity securities of the Federal 
National Mortgage Association or the Federal Home Loan Mortgage 
Corporation shall be treated as an exempted security for purposes of 
section 12, 13, 14, or 16.
    ``(b) Federal Home Loan Banks.--
            ``(1) Registration.--Each Federal Home Loan Bank shall 
        register a class of its common stock under section 12(g), not 
        later than 120 days after the date of enactment of the Federal 
        Housing Finance Regulatory Reform Act of 2008, and shall 
        thereafter maintain such registration and be treated for 
        purposes of this title as an `issuer', the securities of which 
        are required to be registered under section 12, regardless of 
        the number of members holding such stock at any given time.
            ``(2) Standards relating to audit committees.--Each Federal 
        Home Loan Bank shall comply with the rules issued by the 
        Commission under section 10A(m).
    ``(c) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Federal home loan bank; member.--The terms `Federal 
        Home Loan Bank' and `member', have the same meanings as in 
        section 2 of the Federal Home Loan Bank Act.
            ``(2) Federal national mortgage association.--The term 
        `Federal National Mortgage Association' means the corporation 
        created by the Federal National Mortgage Association Charter 
        Act.
            ``(3) Federal home loan mortgage corporation.--The term 
        `Federal Home Loan Mortgage Corporation' means the corporation 
        created by the Federal Home Loan Mortgage Corporation Act.''.

SEC. 1113. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.

    (a) In General.--Section 1318 of the Federal Housing Enterprises 
Financial Safety and Soundness 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:
    ``(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. 1114. LIMIT ON GOLDEN PARACHUTES.

    Section 1318 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4518) is amended by adding at the 
end the following:
    ``(e) Authority To Regulate or Prohibit Certain Forms of Benefits 
to Affiliated Parties.--
            ``(1) Golden parachutes and indemnification payments.--The 
        Director may prohibit or limit, by regulation or order, any 
        golden parachute payment or indemnification payment.
            ``(2) Factors to be taken into account.--The Director shall 
        prescribe, by regulation, the factors to be considered by the 
        Director in taking any action pursuant to paragraph (1), which 
        may include such factors as--
                    ``(A) whether there is a reasonable basis to 
                believe that the affiliated party has committed any 
                fraudulent act or omission, breach of trust or 
                fiduciary duty, or insider abuse with regard to the 
                regulated entity that has had a material effect on the 
                financial condition of the regulated entity;
                    ``(B) whether there is a reasonable basis to 
                believe that the affiliated party is substantially 
                responsible for the insolvency of the regulated entity, 
                the appointment of a conservator or receiver for the 
                regulated entity, or the troubled condition of the 
                regulated entity (as defined in regulations prescribed 
                by the Director);
                    ``(C) whether there is a reasonable basis to 
                believe that the affiliated party has materially 
                violated any applicable provision of Federal or State 
                law or regulation that has had a material effect on the 
                financial condition of the regulated entity;
                    ``(D) whether the affiliated party was in a 
                position of managerial or fiduciary responsibility; and
                    ``(E) the length of time that the party was 
                affiliated with the regulated entity, and the degree to 
                which--
                            ``(i) the payment reasonably reflects 
                        compensation earned over the period of 
                        employment; and
                            ``(ii) the compensation involved represents 
                        a reasonable payment for services rendered.
            ``(3) Certain payments prohibited.--No regulated entity may 
        prepay the salary or any liability or legal expense of any 
        affiliated party if such payment is made--
                    ``(A) in contemplation of the insolvency of such 
                regulated entity, or after the commission of an act of 
                insolvency; and
                    ``(B) with a view to, or having the result of--
                            ``(i) preventing the proper application of 
                        the assets of the regulated entity to 
                        creditors; or
                            ``(ii) preferring one creditor over 
                        another.
            ``(4) Golden parachute payment defined.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `golden parachute payment' means any payment 
                (or any agreement to make any payment) in the nature of 
                compensation by any regulated entity for the benefit of 
                any affiliated party pursuant to an obligation of such 
                regulated entity that--
                            ``(i) is contingent on the termination of 
                        such party's affiliation with the regulated 
                        entity; and
                            ``(ii) is received on or after the date on 
                        which--
                                    ``(I) the regulated entity became 
                                insolvent;
                                    ``(II) any conservator or receiver 
                                is appointed for such regulated entity; 
                                or
                                    ``(III) the Director determines 
                                that the regulated entity is in a 
                                troubled condition (as defined in the 
                                regulations of the Director).
                    ``(B) Certain payments in contemplation of an 
                event.--Any payment which would be a golden parachute 
                payment but for the fact that such payment was made 
                before the date referred to in subparagraph (A)(ii) 
                shall be treated as a golden parachute payment if the 
                payment was made in contemplation of the occurrence of 
                an event described in any subclause of such 
                subparagraph.
                    ``(C) Certain payments not included.--For purposes 
                of this subsection, the term `golden parachute payment' 
                shall not include--
                            ``(i) any payment made pursuant to a 
                        retirement plan which is qualified (or is 
                        intended to be qualified) under section 401 of 
                        the Internal Revenue Code of 1986, or other 
                        nondiscriminatory benefit plan;
                            ``(ii) any payment made pursuant to a bona 
                        fide deferred compensation plan or arrangement 
                        which the Director determines, by regulation or 
                        order, to be permissible; or
                            ``(iii) any payment made by reason of the 
                        death or disability of an affiliated party.
            ``(5) Other definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                    ``(A) Indemnification payment.--Subject to 
                paragraph (6), the term `indemnification payment' means 
                any payment (or any agreement to make any payment) by 
                any regulated entity for the benefit of any person who 
                is or was an affiliated party, to pay or reimburse such 
                person for any liability or legal expense with regard 
                to any administrative proceeding or civil action 
                instituted by the Agency which results in a final order 
                under which such person--
                            ``(i) is assessed a civil money penalty;
                            ``(ii) is removed or prohibited from 
                        participating in conduct of the affairs of the 
                        regulated entity; or
                            ``(iii) is required to take any affirmative 
                        action to correct certain conditions resulting 
                        from violations or practices, by order of the 
                        Director.
                    ``(B) Liability or legal expense.--The term 
                `liability or legal expense' means--
                            ``(i) any legal or other professional 
                        expense incurred in connection with any claim, 
                        proceeding, or action;
                            ``(ii) the amount of, and any cost incurred 
                        in connection with, any settlement of any 
                        claim, proceeding, or action; and
                            ``(iii) the amount of, and any cost 
                        incurred in connection with, any judgment or 
                        penalty imposed with respect to any claim, 
                        proceeding, or action.
                    ``(C) Payment.--The term `payment' includes--
                            ``(i) any direct or indirect transfer of 
                        any funds or any asset; and
                            ``(ii) any segregation of any funds or 
                        assets for the purpose of making, or pursuant 
                        to an agreement to make, any payment after the 
                        date on which such funds or assets are 
                        segregated, without regard to whether the 
                        obligation to make such payment is contingent 
                        on--
                                    ``(I) the determination, after such 
                                date, of the liability for the payment 
                                of such amount; or
                                    ``(II) the liquidation, after such 
                                date, of the amount of such payment.
            ``(6) Certain commercial insurance coverage not treated as 
        covered benefit payment.--No provision of this subsection shall 
        be construed as prohibiting any regulated entity from 
        purchasing any commercial insurance policy or fidelity bond, 
        except that, subject to any requirement described in paragraph 
        (5)(A)(iii), such insurance policy or bond shall not cover any 
        legal or liability expense of the regulated entity which is 
        described in paragraph (5)(A).''.

SEC. 1115. REPORTING OF FRAUDULENT LOANS.

    Part 1 of subtitle C of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4631 et seq.), as amended 
by this Act, is amended by adding at the end the following:

``SEC. 1379E. REPORTING OF FRAUDULENT LOANS.

    ``(a) 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 the purchase or sale of any loan or financial instrument. 
The Director shall require each regulated entity to establish and 
maintain procedures designed to discover any such transactions.
    ``(b) Protection From Liability for Reports.--Any regulated entity 
that, in good faith, makes a report pursuant to subsection (a), and any 
entity-affiliated party, that, in good faith, makes or requires another 
to make any such report, shall not be liable to any person under any 
provision of law or regulation, 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 
persons identified in the report.''.

             Subtitle B--Improvement of Mission Supervision

SEC. 1121. TRANSFER OF PROGRAM APPROVAL AND HOUSING GOAL OVERSIGHT.

    Part 2 of subtitle A of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4541 et seq.) is amended--
            (1) by striking the heading for the part and inserting the 
        following:

          ``PART 2--ADDITIONAL AUTHORITIES OF THE DIRECTOR'';

            and
            (2) by striking sections 1321 and 1322.

SEC. 1122. ASSUMPTION BY THE DIRECTOR OF CERTAIN OTHER HUD 
              RESPONSIBILITIES.

    (a) In General.--Part 2 of subtitle A of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 
et seq.) is amended--
            (1) by striking ``Secretary'' each place that term appears 
        and inserting ``Director'' in each of sections 1323, 1326, 
        1327, 1328, and 1336; and
            (2) by striking sections 1338 and 1349 (12 U.S.C. 4562 note 
        and 4589).
    (b) Retention of Fair Housing Responsibilities.--Section 1325 of 
the Federal Housing Enterprises Financial Safety and Soundness Act of 
1992 (12 U.S.C. 4545) is amended in the matter preceding paragraph (1), 
by inserting ``of Housing and Urban Development'' after ``The 
Secretary''.

SEC. 1123. REVIEW OF ENTERPRISE PRODUCTS.

    Part 2 of subtitle A of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4541 et seq.) is amended by 
inserting before section 1323 the following:

``SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS.

    ``(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 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 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; and
            ``(4) the product is consistent with the safety and 
        soundness of the enterprise or 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), 
                then the enterprise may offer the product.
                    ``(C) Temporary approval.--The Director may, 
                subject to the rules of the Director, provide for 
                temporary approval of the offering of a product without 
                a public comment period, if the Director finds that the 
                existence of exigent circumstances makes such delay 
                contrary to the public interest.
    ``(d) Conditional Approval.--If the Director approves the offering 
of any product by an enterprise, the Director may establish terms, 
conditions, or limitations with respect to such product with which the 
enterprise must comply in order to offer such product.
    ``(e) Exclusions.--
            ``(1) In general.--The requirements of subsections (a) 
        through (d) do not apply with respect to--
                    ``(A) the automated loan underwriting system of an 
                enterprise in existence as of the date of enactment of 
                the Federal Housing Finance Regulatory Reform Act of 
                2008, including any upgrade to the technology, 
                operating system, or software to operate the 
                underwriting system;
                    ``(B) 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
                    ``(C) any other activity that is substantially 
                similar, as determined by rule of the Director to--
                            ``(i) the activities described in 
                        subparagraphs (A) and (B); and
                            ``(ii) other activities that have been 
                        approved by the Director in accordance with 
                        this section.
            ``(2) Expedited review.--
                    ``(A) Enterprise notice.--For any new activity that 
                an enterprise considers not to be a product, the 
                enterprise shall provide written notice to the Director 
                of such activity, and may not commence such activity 
                until the date of receipt of a notice under 
                subparagraph (B) or the expiration of the period 
                described in subparagraph (C). The Director shall 
                establish, by regulation, the form and content of such 
                written notice.
                    ``(B) Director determination.--Not later than 15 
                days after the date of receipt of a notice under 
                subparagraph (A), the Director shall determine whether 
                such activity is a product subject to approval under 
                this section. The Director shall, immediately upon so 
                determining, notify the enterprise.
                    ``(C) Failure to act.--If the Director fails to 
                determine whether such activity is a product within the 
                15-day period described in subparagraph (B), the 
                enterprise may commence the new activity in accordance 
                with subparagraph (A).
    ``(f) No Limitation.--Nothing in this section may be construed 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 an 
        enterprise.''.

SEC. 1124. CONFORMING LOAN LIMITS.

    (a) Fannie Mae.--
            (1) General limit.--Section 302(b)(2) of the Federal 
        National Mortgage Association Charter Act (12 U.S.C. 
        1717(b)(2)) is amended by striking the 7th and 8th sentences 
        and inserting the following new sentences: ``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 after the 
        effective date of Federal Housing Finance Regulatory Reform Act 
        of 2008, subject to the limitations in this paragraph. Each 
        adjustment shall be made by adding to each such amount (as it 
        may have been previously adjusted) a percentage thereof equal 
        to the percentage increase, during the most recent 12-month or 
        4th-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 Federal Housing Enterprises Financial 
        Safety and Soundness Act of 1992 (12 U.S.C. 4541)). If the 
        change in such house price index during the most recent 12-
        month or 4th-quarter period ending before the time of 
        determining such annual adjustment is a decrease, then no 
        adjustment shall be made for the next year, and the next 
        adjustment shall take into account prior declines in the house 
        price index, so that any adjustment shall reflect the net 
        change in the house price index since the last adjustment. 
        Declines in the house price index shall be accumulated and then 
        reduce increases until subsequent increases exceed prior 
        declines.''.
            (2) High-cost area limit.--Section 302(b)(2) of the Federal 
        National Mortgage Association Charter Act (12 U.S.C. 
        1717(b)(2)) is amended by adding after the period at the end 
        the following: ``Such foregoing limitations shall also be 
        increased with respect to properties of a particular size 
        located in any area for which the median price for such size 
        residence exceeds the foregoing limitation for such size 
        residence, to the lesser of 150 percent of such foregoing 
        limitation for such size residence or the amount that is equal 
        to the median price in such area for such size residence.''.
            (3) Effective date.--The amendments made by paragraphs (1) 
        and (2) of this subsection shall take effect upon the 
        expiration of the date described in section 201(a) of the 
        Economic Stimulus Act of 2008 (Public Law 110-185).
    (b) Freddie Mac.--
            (1) General limit.--Section 305(a)(2) of the Federal Home 
        Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is amended 
        by striking the 6th and 7th sentences and inserting the 
        following new sentences: ``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 after the effective date of 
        the Federal Housing Finance Regulatory Reform Act of 2008, 
        subject to the limitations in this paragraph. Each adjustment 
        shall be made by adding to each such amount (as it may have 
        been previously adjusted) a percentage thereof equal to the 
        percentage increase, during the most recent 12-month or fourth-
        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 Federal Housing Enterprises Financial 
        Safety and Soundness Act of 1992 (12 U.S.C. 4541)). If the 
        change in such house price index during the most recent 12-
        month or 4th-quarter period ending before the time of 
        determining such annual adjustment is a decrease, then no 
        adjustment shall be made for the next year, and the next 
        adjustment shall take into account prior declines in the house 
        price index, so that any adjustment shall reflect the net 
        change in the house price index since the last adjustment. 
        Declines in the house price index shall be accumulated and then 
        reduce increases until subsequent increases exceed prior 
        declines.''.
            (2) High-cost area limit.--Section 305(a)(2) of the Federal 
        Home Loan Mortgage Corporation Act is amended by adding after 
        the period at the end the following: ``Such foregoing 
        limitations shall also be increased with respect to properties 
        of a particular size located in any area for which the median 
        price for such size residence exceeds the foregoing limitation 
        for such size residence, to the lesser of 150 percent of such 
        foregoing limitation for such size residence or the amount that 
        is equal to the median price in such area for such size 
        residence.''.
            (3) Effective date.--The amendments made by paragraphs (1) 
        and (2) of this subsection shall take effect upon the 
        expiration of the date described in section 201(a) of the 
        Economic Stimulus Act of 2008 (Public Law 110-185).
    (c) 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 under this Act.
    (d) Housing Price Index.--Part 2 of subtitle A of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4541 et seq.) is amended by inserting after section 1321 (as 
added by section 1123 of this Act) the following new section:

``SEC. 1322. HOUSING PRICE INDEX.

    ``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 of the Federal Housing Finance Regulatory 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.''.

SEC. 1125. ANNUAL HOUSING REPORT.

    (a) Repeal.--Section 1324 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4544) is hereby 
repealed.
    (b) Annual Housing Report.--The Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 is amended by inserting 
after section 1323 the following:

``SEC. 1324. ANNUAL HOUSING REPORT.

    ``(a) In General.--After reviewing and analyzing the reports 
submitted under section 309(n) of the Federal National Mortgage 
Association Charter Act and section 307(f) of the Federal Home Loan 
Mortgage Corporation Act, the Director shall submit a report, not later 
than October 30 of each year, to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee on Financial Services of 
the House of Representatives, on the activities of each enterprise.
    ``(b) Contents.--The report required under subsection (a) shall--
            ``(1) discuss--
                    ``(A) the extent to and manner in which--
                            ``(i) each enterprise is achieving the 
                        annual housing goals established under subpart 
                        B;
                            ``(ii) each enterprise is complying with 
                        its duty to serve underserved markets, as 
                        established under section 1335;
                            ``(iii) each enterprise is complying with 
                        section 1337;
                            ``(iv) each enterprise received credit 
                        towards achieving each of its goals resulting 
                        from a transaction or activity pursuant to 
                        section 1331(b)(2); and
                            ``(v) each enterprise is achieving the 
                        purposes of the enterprise established by law; 
                        and
                    ``(B) the actions that each enterprise could 
                undertake to promote and expand the purposes of the 
                enterprise;
            ``(2) aggregate and analyze relevant data on income to 
        assess the compliance of 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) identify the extent to which each enterprise is 
        involved in mortgage purchases and secondary market activities 
        involving subprime and nontraditional loans;
            ``(5) compare the characteristics of subprime and 
        nontraditional loans both purchased and securitized by each 
        enterprise to other loans purchased and securitized by each 
        enterprise; and
            ``(6) compare the characteristics of high-cost loans 
        purchased and securitized, where such securities are not held 
        on portfolio to loans purchased and securitized, where such 
        securities are either retained on portfolio or repurchased by 
        the enterprise, including such characteristics as--
                    ``(A) the purchase price of the property that 
                secures the mortgage;
                    ``(B) the loan-to-value ratio of the mortgage, 
                which shall reflect any secondary liens on the relevant 
                property;
                    ``(C) the terms of the mortgage;
                    ``(D) the creditworthiness of the borrower; and
                    ``(E) any other relevant data, as determined by the 
                Director.
    ``(c) Data Collection and Reporting.--
            ``(1) In general.--To assist the Director in analyzing the 
        matters described in subsection (b), 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;
                    ``(B) the characteristics of individual subprime 
                and nontraditional mortgages that are eligible for 
                purchase by the enterprises and the characteristics of 
                borrowers under such mortgages, including the 
                creditworthiness of such borrowers and determination 
                whether such borrowers would qualify for prime lending; 
                and
                    ``(C) 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--
                    ``(A) is not released in an identifiable form; and
                    ``(B) is not otherwise obtainable from other 
                publicly available data sets.
            ``(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.''.

SEC. 1126. PUBLIC USE DATABASE.

    Section 1323 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (42 U.S.C. 4543) is amended--
            (1) in subsection (a)--
                    (A) by striking ``(a) In General.--The Secretary'' 
                and inserting the following:
    ``(a) Availability.--
            ``(1) In general.--The Director''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(2) Census tract level reporting.--Such data shall 
        include the data elements required to be reported under the 
        Home Mortgage Disclosure Act of 1975, at the census tract 
        level.'';
            (2) in subsection (b)(2), by inserting before the period at 
        the end the following: ``or with subsection (a)(2)''; and
            (3) by adding at the end the following new subsection:
    ``(d) Timing.--Data submitted under this section by an enterprise 
in connection with a provision referred to in subsection (a) shall be 
made publicly available in accordance with this section not later than 
September 30 of the year following the year to which the data 
relates.''.

SEC. 1127. REPORTING OF MORTGAGE DATA.

    Section 1326 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4546) is amended--
            (1) in subsection (a), by striking ``The Director'' and 
        inserting ``Subject to subsection (d), the Director''; and
            (2) by adding at the end the following:
    ``(d) Mortgage Information.--Subject to privacy considerations, as 
described in section 304(j) of the Home Mortgage Disclosure Act of 1975 
(12 U.S.C. 2803(j)), the Director shall, by regulation or order, 
provide that certain information relating to single family mortgage 
data of the enterprises shall be disclosed to the public, in order to 
make available to the public--
            ``(1) the same data from the enterprises that is required 
        of insured depository institutions under the Home Mortgage 
        Disclosure Act of 1975; and
            ``(2) information collected by the Director under section 
        1324(b)(6).''.

SEC. 1128. REVISION OF HOUSING GOALS.

    (a) Repeal.--Sections 1331 through 1334 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4561 
through 4564) are hereby repealed.
    (b) Housing Goal.--The Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 is amended by inserting before section 1335 
the following:

``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.

    ``(a) In General.--The Director shall, by regulation, establish 
effective for the first calendar year that begins after the date of 
enactment of the Federal Housing Finance Regulatory Reform Act of 2008, 
and each year thereafter, annual housing goals, as described under this 
subpart, with respect to the mortgage purchases by the enterprises.
    ``(b) Special Counting Requirements.--
            ``(1) In general.--The Director shall determine whether an 
        enterprise shall receive full, partial, or no credit for a 
        transaction toward achievement of any of the housing goals 
        established pursuant to this section or sections 1332 through 
        1334.
            ``(2) Considerations.--In making any determination under 
        paragraph (1), the Director shall consider whether a 
        transaction or activity of an enterprise is substantially 
        equivalent to a mortgage purchase and either (A) creates a new 
        market, or (B) adds liquidity to an existing market, provided 
        however that the terms and conditions of such mortgage purchase 
        is neither determined to be unacceptable, nor contrary to good 
        lending practices, and otherwise promotes sustainable 
        homeownership and further, that such mortgage purchase actually 
        fulfills the purposes of the enterprise and is in accordance 
        with the chartering Act of such enterprise.
    ``(c) Eliminating Interest Rate Disparities.--
            ``(1) In general.--In establishing and implementing the 
        housing goals under this subpart, the Director shall require 
        the enterprises to disclose appropriate information to allow 
        the Director to assess if there are any disparities in interest 
        rates charged on mortgages to borrowers who are minorities, as 
        compared with borrowers of similar creditworthiness who are not 
        minorities, as evidenced in reports pursuant to the Home 
        Mortgage Disclosure Act of 1975.
            ``(2) Report to congress on disparities.--Upon a finding by 
        the Director that a pattern of disparities in interest rates 
        exists pursuant to the information provided by an enterprise 
        under paragraph (1), the Director shall--
                    ``(A) forward to the Committee on Banking, Housing, 
                and Urban Affairs of the Senate and the Committee on 
                Financial Services of the House of Representatives a 
                report detailing the disparities; and
                    ``(B) forward the report prepared under 
                subparagraph (A) to any other appropriate regulatory or 
                enforcement agency.
            ``(3) Identity of individuals not disclosed.--In carrying 
        out this subsection, the Director shall ensure that no 
        personally identifiable financial information that would enable 
        an individual borrower to be reasonably identified shall be 
        made public.
    ``(d) Timing.--The Director shall establish an annual deadline for 
the establishment of housing goals described in subsection (a), 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 goals.

``SEC. 1331A. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS.

    ``(a) Authority.--
            ``(1) Review.--The Director shall review the 
        appropriateness of each goal established pursuant to this 
        subpart at least once during each year to assure that given 
        current market conditions that each such goal is feasible.
            ``(2) Petition to reduce.--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, section 301(3) of the Federal National Mortgage 
        Association Charter Act (12 U.S.C. 1716(3)), or section 
        301(b)(3) of the Federal Home Loan Mortgage Corporation Act (12 
        U.S.C. 1451 note), as applicable.
    ``(c) Determination.--
            ``(1) 30-day period.--If an enterprise submits a petition 
        for reduction to the Director under subsection (a)(2), the 
        Director shall make a determination regarding any proposed 
        reduction within 30 days of receipt of the petition.
            ``(2) Extension.--The Director may extend the period 
        described in paragraph (1) for a single additional 15-day 
        period, but only if the Director requests additional 
        information from the enterprise.

``SEC. 1332. SINGLE-FAMILY HOUSING GOALS.

    ``(a) Establishment of Goals.--
            ``(1) In general.--The Director shall establish annual 
        goals for the purchase by each enterprise of conventional, 
        conforming, single-family, owner-occupied, purchase money 
        mortgages financing housing for each of the following:
                    ``(A) Low-income families.
                    ``(B) Families that reside in low-income areas.
                    ``(C) Very low-income families.
            ``(2) Goals as percentage of total purchase money mortgage 
        purchases.--The goals established under paragraph (1) shall be 
        established as a percentage of the total number of single-
        family dwelling units financed by single-family purchase money 
        mortgage purchases of the enterprise.
    ``(b) Determination of Compliance.--
            ``(1) In general.--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.
            ``(2) Compliance requirements.--An enterprise shall be 
        considered to be in compliance with a goal described under 
        subsection (a) 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, purchase money mortgages purchased by the enterprise 
        in such year that serve such families, meets or exceeds the 
        target established under subsection (c) for the year for such 
        type of family.
    ``(c) Annual Targets.--
            ``(1) In general.--The Director shall establish annual 
        targets for each goal described in subsection (a).
            ``(2) Considerations.--In establishing annual targets under 
        paragraph (1), the Director shall consider--
                    ``(A) national housing needs;
                    ``(B) economic, housing, and demographic 
                conditions;
                    ``(C) the performance and effort of the enterprises 
                toward achieving the housing goals under this section 
                in previous years;
                    ``(D) the ability of the enterprise to lead the 
                industry in making mortgage credit available;
                    ``(E) recent information submitted in compliance 
                with the Home Mortgage Disclosure Act of 1975 and such 
                other reliable mortgage data as may be available;
                    ``(F) the size of the purchase money conventional 
                mortgage market serving each of the types of families 
                described in subsection (a), relative to the size of 
                the overall purchase money mortgage market; and
                    ``(G) the need to maintain the sound financial 
                condition of the enterprises.
            ``(3) High-cost loans and inappropriate lending 
        practices.--In establishing annual targets under paragraph (1), 
        the Director shall not consider segments of the market 
        determined to be unacceptable or contrary to good lending 
        practices pursuant to section 1331(b)(2).
    ``(d) Notice of Determination and Enterprise Comment.--
            ``(1) Notice.--Within 30 days of making a determination 
        under subsection (b) regarding compliance of an enterprise for 
        a year with the housing goals 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 (c).
            ``(2) Comment period.--The Director shall provide each 
        enterprise and the public an opportunity to comment on the 
        determination during the 30-day period beginning upon receipt 
        by the enterprise of the notice.
    ``(e) 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 the income of the 
mortgagor at the time of origination of the mortgage.
    ``(f) Consideration of Properties With Rental Units.--Mortgages 
financing 1-to-4 unit owner-occupied properties shall count toward the 
achievement of the single-family housing goal under this section, if 
such properties otherwise meet the requirements under this section 
notwithstanding the use of 1 or more units for rental purposes.

``SEC. 1333. SINGLE-FAMILY HOUSING REFINANCE GOALS.

    ``(a) Prepayment of Existing Loans.--
            ``(1) In general.--The Director shall establish annual 
        goals for the purchase by each enterprise of mortgages on 
        conventional, conforming, single-family, owner-occupied housing 
        given to pay off or prepay an existing loan served by the same 
        property for each of the following:
                    ``(A) Low-income families.
                    ``(B) Families that reside in low-income areas.
                    ``(C) Very low-income families.
            ``(2) Goals as percentage of total refinancing mortgage 
        purchases.--The goals described under paragraph (1) shall be 
        established as a percentage of the total number of single-
        family dwelling units refinanced by mortgage purchases of each 
        enterprise.
    ``(b) Determination of Compliance.--
            ``(1) In general.--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 refinance goals 
        established under this section for such year.
            ``(2) Compliance.--An enterprise shall be considered to be 
        in compliance with the goals of this section 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 refinancing 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 (c).
    ``(c) Annual Targets.--
            ``(1) In general.--The Director shall establish annual 
        targets for each goal described in subsection (a).
            ``(2) Considerations.--In establishing annual targets under 
        paragraph (1), the Director shall consider--
                    ``(A) national housing needs;
                    ``(B) economic, housing, and demographic 
                conditions;
                    ``(C) the performance and effort of the enterprises 
                toward achieving the housing goals under this section 
                in previous years;
                    ``(D) the ability of the enterprise to lead the 
                industry in making mortgage credit available;
                    ``(E) recent information submitted in compliance 
                with the Home Mortgage Disclosure Act of 1975 and such 
                other reliable mortgage data as may be available;
                    ``(F) the size of the purchase money conventional 
                mortgage market serving each of the types of families 
                described in subsection (a), relative to the size of 
                the overall purchase money mortgage market; and
                    ``(G) the need to maintain the sound financial 
                condition of the enterprises.
    ``(d) Notice of Determination and Enterprise Comment.--
            ``(1) Notice.--Within 30 days of making a determination 
        under subsection (b) regarding compliance of an enterprise for 
        a year with the housing goals 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 (c).
            ``(2) Comment period.--The Director shall provide each 
        enterprise and the public an opportunity to comment on the 
        determination during the 30-day period beginning upon receipt 
        by the enterprise of the notice.
    ``(e) 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 the income of the 
mortgagor at the time of origination of the mortgage.

``SEC. 1334. MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.

    ``(a) Establishment.--
            ``(1) In general.--The Director shall establish, by 
        regulation, by unit, dollar volume, or percentage of 
        multifamily activity, as determined by the Director, an annual 
        goal for the purchase by each enterprise of--
                    ``(A) mortgages that finance dwelling units 
                affordable to very low-income families; and
                    ``(B) 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 housing goal established 
        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 5 to 50 units (as 
        adjusted by the Director), or with mortgages of up to 
        $5,000,000 (as adjusted by the Director).
            ``(3) Factors.--The Director shall establish the goal and 
        additional requirements under this section taking into 
        consideration--
                    ``(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, 
                including the size of the small multifamily mortgage 
                market;
                    ``(D) the most recent information available for the 
                Residential Survey published by the Census Bureau, and 
                such other reliable data as may be available regarding 
                multifamily mortgages;
                    ``(E) the ability of the enterprise to lead the 
                industry in expanding mortgage credit availability at 
                favorable terms, especially for underserved markets, 
                such as for--
                            ``(i) small multifamily projects;
                            ``(ii) multifamily properties in need of 
                        preservation and rehabilitation; and
                            ``(iii) multifamily properties located in 
                        rural areas; and
                    ``(F) the need to maintain the sound financial 
                condition of the enterprise.
    ``(b) Units Financed by Housing Finance Agency Bonds.--The Director 
may 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 projects that otherwise 
qualify under such goal and that are 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 Rent Level.--
            ``(1) In general.--The Director shall monitor the 
        performance of each enterprise in meeting the goal established 
        under this section and shall evaluate such performance (for 
        purposes of section 1336) based on whether the rent levels are 
        affordable to low-income and very low-income families.
            ``(2) Rent level.--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.--
            ``(1) In general.--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).
            ``(2) Compliance.--An enterprise shall be considered to be 
        in compliance with the goal described under subsection (a) for 
        a year only if the multifamily mortgage purchases of the 
        enterprise meet or exceed the goal for the year established 
        under subsection (a).
    ``(e) Consideration of Units in Single-Family Rental Housing.--In 
establishing the goal under this section, the Director may take into 
consideration the number of housing units financed by any mortgage 
purchased by an enterprise on single-family rental housing that is not 
owner-occupied.
    ``(f) Removing Credit.--The Director shall subtract from the units 
or mortgages counted toward the goal established under this section in 
a current year any units or mortgages credited toward such goal in a 
prior year if an enterprise requires a lender to repurchase, or 
reimburse for losses, or indemnify the enterprise against potential 
losses on such units or mortgages.
    ``(g) Notice of Determination and Enterprise Comment.--
            ``(1) Notice.--Within 30 days of making a determination 
        under subsection (d) regarding compliance of an enterprise for 
        a year with the 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 goal for 
        the year under subsection (a).
            ``(2) Comment period.--The Director shall provide each 
        enterprise and the public an opportunity to comment on the 
        determination during the 30-day period beginning upon receipt 
        by the enterprise of the notice.''.
    (c) Conforming Amendments.--The Federal Housing Enterprises 
Financial Safety and Soundness 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''.
    (d) Definitions.--Section 1303 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4502) is 
amended--
            (1) by striking paragraph (24), as so designated by section 
        1002 of this Act, and inserting the following:
            ``(24) Very low-income.--
                    ``(A) In general.--The term `very low-income' 
                means--
                            ``(i) in the case of owner-occupied units, 
                        families having incomes not greater than 50 
                        percent of the area median income; and
                            ``(ii) in the case of rental units, 
                        families having incomes not greater than 50 
                        percent of the area median income, with 
                        adjustments for smaller and larger families, as 
                        determined by the Director.
                    ``(B) Rule of construction.--For purposes of 
                section 1338 and 1339, the term `very low-income' 
                means--
                            ``(i) in the case of owner-occupied units, 
                        income in excess of 30 percent but not greater 
                        than 50 percent of the area median income; and
                            ``(ii) in the case of rental units, income 
                        in excess of 30 percent but not greater than 50 
                        percent of the area median income, with 
                        adjustments for smaller and larger families, as 
                        determined by the Director.''; and
            (2) by adding at the end the following:
            ``(26) 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 applicable dollar limitation, in effect at the time of such 
        origination, under--
                    ``(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.
            ``(27) 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 Director.
            ``(28) 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.
            ``(29) Minority census tract.--The term `minority census 
        tract' means a census tract that has a minority population of 
        at least 30 percent and a median family income of less than 100 
        percent of the area family median income.
            ``(30) Shortage of standard rental units both affordable 
        and available to extremely low-income renter households.--
                    ``(A) In general.--The term `shortage of standard 
                rental units both affordable and available to extremely 
                low-income renter households' means the gap between--
                            ``(i) the number of units with complete 
                        plumbing and kitchen facilities with a rent 
                        that is 30 percent or less of 30 percent of the 
                        adjusted area median income as determined by 
                        the Director that are occupied by extremely 
                        low-income renter households or are vacant for 
                        rent; and
                            ``(ii) the number of extremely low-income 
                        renter households.
                    ``(B) Rule of construction.--If the number of units 
                described in subparagraph (A)(i) exceeds the number of 
                extremely low-income households as described in 
                subparagraph (A)(ii), there is no shortage.
            ``(31) Shortage of standard rental units both affordable 
        and available to very low-income renter households.--
                    ``(A) In general.--The term `shortage of standard 
                rental units both affordable and available to very low-
                income renter households' means the gap between--
                            ``(i) the number of units with complete 
                        plumbing and kitchen facilities with a rent 
                        that is 30 percent or less of 50 percent of the 
                        adjusted area median income as determined by 
                        the Director that are occupied by either 
                        extremely low- or very low-income renter 
                        households or are vacant for rent; and
                            ``(ii) the number of extremely low- and 
                        very low-income renter households.
                    ``(B) Rule of construction.--If the number of units 
                described in subparagraph (A)(i) exceeds the number of 
                extremely low- and very low-income households as 
                described in subparagraph (A)(ii), there is no 
                shortage.''.

SEC. 1129. DUTY TO SERVE UNDERSERVED MARKETS.

    (a) Establishment and Evaluation of Performance.--Section 1335 of 
the Federal Housing Enterprises Financial Safety and Soundness 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 by purchasing or 
        securitizing mortgage investments.
            ``(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 Director 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 of the Federal Housing Finance Regulatory 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. 1130. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.

    (a) In General.--Section 1336 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4566) is amended 
by striking subsections (b) and (c) and inserting the following:
    ``(b) Notice and Preliminary Determination of Failure To Meet 
Goals.--
            ``(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 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.
            ``(2) Response period.--
                    ``(A) In general.--During the 30-day period 
                beginning on the date on which an enterprise is 
                provided notice under paragraph (1), the enterprise may 
                submit to the Director any written information that the 
                enterprise considers appropriate for consideration by 
                the Director in finally determining whether such 
                failure has occurred or whether the achievement of such 
                goal was or is feasible.
                    ``(B) Extended period.--The Director may extend the 
                period under subparagraph (A) for good cause for not 
                more than 30 additional days.
                    ``(C) Shortened period.--The Director may shorten 
                the period under subparagraph (A) for good cause.
                    ``(D) Failure to respond.--The failure of an 
                enterprise to provide information during the 30-day 
                period under this paragraph (as extended or shortened) 
                shall waive any right of the enterprise to comment on 
                the proposed determination or action of the Director.
            ``(3) Consideration of information and final 
        determination.--
                    ``(A) In general.--After the expiration of the 
                response period under paragraph (2), or upon receipt of 
                information provided during such period by the 
                enterprise, whichever occurs earlier, the Director 
                shall issue a final determination on--
                            ``(i) whether the enterprise has failed, or 
                        there is a substantial probability that the 
                        enterprise will fail, to meet the housing goal; 
                        and
                            ``(ii) whether (taking into consideration 
                        market and economic conditions and the 
                        financial condition of the enterprise) the 
                        achievement of the housing goal was or is 
                        feasible.
                    ``(B) Considerations.--In making a final 
                determination under subparagraph (A), the Director 
                shall take into consideration any relevant information 
                submitted by the enterprise during the response period.
                    ``(C) Notice.--The Director shall provide written 
                notice, including a response to any information 
                submitted during the response period, to the 
                enterprise, the Committee on Banking, Housing, and 
                Urban Affairs of the Senate, and the Committee on 
                Financial Services of the House of Representatives, 
                of--
                            ``(i) each final determination under this 
                        paragraph that an enterprise has failed, or 
                        that there is a substantial probability that 
                        the enterprise will fail, to meet a housing 
                        goal;
                            ``(ii) each final determination that the 
                        achievement of a housing goal was or is 
                        feasible; and
                            ``(iii) the reasons for each such final 
                        determination.
    ``(c) Cease and Desist, 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).
            ``(2) Housing plan.--If the Director requires a housing 
        plan under this subsection, such a plan shall be--
                    ``(A) a feasible plan describing the specific 
                actions the enterprise will take--
                            ``(i) to achieve the goal for the next 
                        calendar year; and
                            ``(ii) if the Director determines that 
                        there is a substantial probability that the 
                        enterprise will fail to meet a goal in the 
                        current year, to make such improvements and 
                        changes in its operations as are reasonable in 
                        the remainder of such year; and
                    ``(B) sufficiently specific to enable the Director 
                to monitor compliance periodically.
            ``(3) Deadline for submission.--The Director shall 
        establish a deadline for an enterprise to comply with any 
        remedial action or submit a housing plan to the Director, which 
        may not be more than 45 days after the enterprise is provided 
        notice. The Director may extend the deadline to the extent that 
        the Director determines necessary. Any extension of the 
        deadline shall be in writing and for a time certain.
            ``(4) Approval.--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 it 
        necessary. The Director shall approve any plan that the 
        Director determines is likely to succeed, and conforms with the 
        Federal National Mortgage Association Charter Act or the 
        Federal Home Loan Mortgage Corporation Act (as applicable), 
        this title, and any other applicable provision of law.
            ``(5) Notice of approval and disapproval.--The Director 
        shall provide written notice to any enterprise submitting a 
        housing plan of the approval or disapproval of the plan (which 
        shall include the reasons for any disapproval of the plan) and 
        of any extension of the period for approval or disapproval.
            ``(6) Resubmission.--If the initial housing plan submitted 
        by an enterprise under this section is disapproved, the 
        enterprise shall submit an amended plan acceptable to the 
        Director not later than 15 days after such disapproval, or such 
        longer period that the Director determines is in the public 
        interest.
            ``(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--
                    ``(A) seek other actions when an enterprise fails 
                to meet a goal; and
                    ``(B) exercise appropriate enforcement authority 
                available to the Director under this Act.''.
    (b) Conforming Amendment.--The heading for subpart C of part 2 of 
subtitle A of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 is amended to read as follows:

                      ``Subpart C--Enforcement''.

    (c) Cease and Desist Proceedings .--
            (1) Repeal.--Section 1341 of the Federal Housing 
        Enterprises Financial Safety and Soundness Act of 1992 (12 
        U.S.C. 4581) is hereby repealed.
            (2) Cease and desist proceedings.--The Federal Housing 
        Enterprises Financial Safety and Soundness Act of 1992 is 
        amended by inserting before section 1342 the following:

``SEC. 1341. CEASE AND DESIST PROCEEDINGS.

    ``(a) Grounds for Issuance.--The Director may issue and serve a 
notice of charges under this section upon an enterprise if the Director 
determines that--
            ``(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 1327, 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, subsection 
        (e) or (f) of section 307 of the Federal Home Loan Mortgage 
        Corporation Act, or section 1337 of this title;
            ``(4) the enterprise has violated any provision of part 2 
        of this title or any order, rule, or regulation under part 2;
            ``(5) the enterprise has failed to submit a housing plan or 
        perform its responsibilities under a remedial order that 
        substantially 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).
    ``(b) Procedure.--
            ``(1) Notice of charges.--Each notice of charges issued 
        under this section shall contain a statement of the facts 
        constituting the alleged conduct and shall fix a time and place 
        at which a hearing will be held to determine on the record 
        whether an order to cease and desist from such conduct should 
        issue.
            ``(2) Issuance of order.--If the Director finds on the 
        record made at a hearing described in paragraph (1) that any 
        conduct specified in the notice of charges has been established 
        (or the enterprise consents pursuant to section 1342(a)(4)), 
        the Director may issue and serve upon the enterprise an order 
        requiring the enterprise to--
                    ``(A) comply with the goals;
                    ``(B) submit a report under section 1327;
                    ``(C) comply with any provision of part 2 of this 
                title or any order, rule, or regulation under part 2;
                    ``(D) submit a housing plan in compliance with 
                section 1336(c);
                    ``(E) comply with the housing plan in compliance 
                with 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.
    ``(c) Effective Date.--An order under this section shall become 
effective upon the expiration of the 30-day period beginning on the 
date of service of the order upon the enterprise (except in the case of 
an order issued upon consent, which shall become effective at the time 
specified therein), and shall remain effective and enforceable as 
provided in the order, except to the extent that the order is stayed, 
modified, terminated, or set aside by action of the Director or 
otherwise, as provided in this subpart.''.
    (d) Civil Money Penalties.--
            (1) Repeal.--Section 1345 of the Federal Housing 
        Enterprises Financial Safety and Soundness Act of 1992 (12 
        U.S.C. 4585) is hereby repealed.
            (2) Civil money penalties.--The Federal Housing Enterprises 
        Financial Safety and Soundness Act of 1992 is amended by 
        inserting after section 1344 the following:

``SEC. 1345. CIVIL MONEY PENALTIES.

    ``(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 1327, 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 part 2 of this title or 
        any order, rule, or regulation under part 2;
            ``(5) submit a housing plan or perform its responsibilities 
        under a remedial order issued 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 a penalty under this 
section, as determined by the Director, may not exceed--
            ``(1) for any failure described in paragraph (1), (5), or 
        (6) of subsection (a), $100,000 for each day that the failure 
        occurs; and
            ``(2) for any failure described in paragraph (2), (3), or 
        (4) of subsection (a), $50,000 for each day that the failure 
        occurs.
    ``(c) Procedures.--
            ``(1) Establishment.--The Director shall establish 
        standards and procedures governing the imposition of civil 
        money penalties under this section. Such standards and 
        procedures--
                    ``(A) shall provide for the Director to notify the 
                enterprise in writing of the determination of the 
                Director to impose the penalty, which shall be made on 
                the record;
                    ``(B) shall provide for the imposition of a penalty 
                only after the enterprise has been given an opportunity 
                for a hearing on the record pursuant to section 1342; 
                and
                    ``(C) may provide for review by the Director of any 
                determination or order, or interlocutory ruling, 
                arising from a hearing.
            ``(2) Factors in determining amount of penalty.--In 
        determining the amount of a penalty under this section, the 
        Director shall give consideration to factors including--
                    ``(A) the gravity of the offense;
                    ``(B) any history of prior offenses;
                    ``(C) ability to pay the penalty;
                    ``(D) injury to the public;
                    ``(E) benefits received;
                    ``(F) deterrence of future violations;
                    ``(G) the length of time that the enterprise should 
                reasonably take to achieve the goal; and
                    ``(H) such other factors as the Director may 
                determine, by regulation, to be appropriate.
    ``(d) Action To Collect Penalty.--If an enterprise fails to comply 
with an order by the Director imposing a civil money penalty under this 
section, after the order is no longer subject to review, as provided in 
sections 1342 and 1343, the Director may bring an action in the United 
States District Court for the District of Columbia to obtain a monetary 
judgment against the enterprise, and such other relief as may be 
available. The monetary judgment may, in the court's discretion, 
include the attorneys' fees and other expenses incurred by the United 
States in connection with the action. In an action under this 
subsection, the validity and appropriateness of the order imposing the 
penalty shall not be subject to review.
    ``(e) Settlement by Director.--The Director may compromise, modify, 
or remit any civil money penalty which may be, or has been, imposed 
under this section.
    ``(f) Deposit of Penalties.--The Director shall use any civil money 
penalties collected under this section to help fund the Housing Trust 
Fund established under section 1338.''.
    (e) Director Authority.--
            (1) Authority to bring a civil action.--Section 1344(a) of 
        the Federal Housing Enterprises Financial Safety and Soundness 
        Act of 1992 (12 U.S.C. 4584) is amended by striking ``The 
        Secretary may request the Attorney General of the United States 
        to bring a civil action'' and inserting ``The Director may 
        bring a civil action''.
            (2) Subpoena enforcement.--Section 1348(c) of the Federal 
        Housing Enterprises Financial Safety and Soundness Act of 1992 
        (12 U.S.C. 4588(c)) is amended by inserting ``may bring an 
        action or'' before ``may request''.
            (3) Conforming amendments.--Subpart C of part 2 of subtitle 
        A of the Federal Housing Enterprises Financial Safety and 
        Soundness Act of 1992 (12 U.S.C. 4581 et seq.) is amended by 
        striking ``Secretary'' each place that term appears and 
        inserting ``Director'' in each of--
                    (A) section 1342 (12 U.S.C. 4582);
                    (B) section 1343 (12 U.S.C. 4583);
                    (C) section 1346 (12 U.S.C. 4586);
                    (D) section 1347 (12 U.S.C. 4587); and
                    (E) section 1348 (12 U.S.C. 4588).

SEC. 1131. AFFORDABLE HOUSING PROGRAMS.

    (a) Repeal.--Section 1337 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4567) is hereby 
repealed.
    (b) Annual Housing Report.--The Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 1301 et seq.) is 
amended by inserting after section 1336 the following:

``SEC. 1337. AFFORDABLE HOUSING ALLOCATIONS.

    ``(a) Set Aside and Allocation of Amounts by Enterprises.--Subject 
to subsection (b), in each fiscal year--
            ``(1) the Federal Home Loan Mortgage Corporation shall--
                    ``(A) set aside an amount equal to 4.2 basis points 
                for each dollar of the unpaid principal balance of its 
                total new business purchases; and
                    ``(B) allocate or otherwise transfer--
                            ``(i) 65 percent of such amounts to the 
                        Secretary of Housing and Urban Development to 
                        fund the Housing Trust Fund established under 
                        section 1338; and
                            ``(ii) 35 percent of such amounts to fund 
                        the Capital Magnet Fund established pursuant to 
                        section 1339; and
            ``(2) the Federal National Mortgage Association shall--
                    ``(A) set aside an amount equal to 4.2 basis points 
                for each dollar of unpaid principal balance of its 
                total new business purchases; and
                    ``(B) allocate or otherwise transfer--
                            ``(i) 65 percent of such amounts to the 
                        Secretary of Housing and Urban Development to 
                        fund the Housing Trust Fund established under 
                        section 1338; and
                            ``(ii) 35 percent of such amounts to fund 
                        the Capital Magnet Fund established pursuant to 
                        section 1339.
    ``(b) Suspension of Contributions.--The Director shall temporarily 
suspend allocations under subsection (a) by an enterprise upon a 
finding by the Director that such allocations--
            ``(1) are contributing, or would contribute, to the 
        financial instability of the enterprise;
            ``(2) are causing, or would cause, the enterprise to be 
        classified as undercapitalized; or
            ``(3) are preventing, or would prevent, the enterprise from 
        successfully completing a capital restoration plan under 
        section 1369C.
    ``(c) Prohibition of Pass-Through of Cost of Allocations.--The 
Director shall, by regulation, prohibit each enterprise from 
redirecting the costs of any allocation required under this section, 
through increased charges or fees, or decreased premiums, or in any 
other manner, to the originators of mortgages purchased or securitized 
by the enterprise.
    ``(d) 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.
    ``(e) Required Amount for HOPE Reserve Fund.--Of the aggregate 
amount allocated under subsection (a), 25 percent shall be deposited 
into a fund established in the Treasury of the United States by the 
Secretary of the Treasury for such purpose.
    ``(f) Limitation.--No funds under this title may be used in 
conjunction with property taken by eminent domain, unless eminent 
domain is employed only for a public use, except that, for purposes of 
this section, public use shall not be construed to include economic 
development that primarily benefits any private entity.

``SEC. 1338. HOUSING TRUST FUND.

    ``(a) Establishment and Purpose.--The Secretary of Housing and 
Urban Development (in this section referred to as the `Secretary') 
shall establish and manage a Housing Trust Fund, which shall be funded 
with amounts allocated by the enterprises under section 1337 and any 
amounts as are or may be appropriated, transferred, or credited to such 
Housing Trust Fund under any other provisions of law. The purpose of 
the Housing Trust Fund under this section is to provide grants to 
States for use--
            ``(1) to increase and preserve the supply of rental housing 
        for extremely low- and very low-income families, including 
        homeless families; and
            ``(2) to increase homeownership for extremely low- and very 
        low-income families.
    ``(b) Allocations for HOPE Bond Payments.--
            ``(1) In general.--Notwithstanding subsection (c), to help 
        address the mortgage crisis, of the amounts allocated pursuant 
        to clauses (i) and (ii) of section 1337(a)(1)(B) and clauses 
        (i) and (ii) of section 1337(a)(2)(B) in excess of amounts 
        described in section 1337(e)--
                    ``(A) 100 percent of such excess shall be used to 
                reimburse the Treasury for payments made pursuant to 
                section 257(w)(1)(C) of the National Housing Act in 
                calendar year 2009;
                    ``(B) 50 percent of such excess shall be used to 
                reimburse the Treasury for such payments in calendar 
                year 2010; and
                    ``(C) 25 percent of such excess shall be used to 
                reimburse the Treasury for such payments in calendar 
                year 2011.
            ``(2) Excess funds.--At the termination of the HOPE for 
        Homeowners Program established under section 257 of the 
        National Housing Act, if amounts used to reimburse the Treasury 
        under paragraph (1) exceed the total net cost to the Government 
        of the HOPE for Homeowners Program, such amounts shall be used 
        for their original purpose, as described in paragraphs (1)(B) 
        and (2)(B) of section 1337(a).
            ``(3) Treasury fund.--The amounts referred to in 
        subparagraphs (A) through (C) of paragraph (1) shall be 
        deposited into a fund established in the Treasury of the United 
        States by the Secretary of the Treasury for such purpose.
    ``(c) Allocation for Housing Trust Fund in Fiscal Year 2010 and 
Subsequent Years.--
            ``(1) In general.--Except as provided in subsection (b), 
        the Secretary shall distribute the amounts allocated for the 
        Housing Trust Fund under this section to provide affordable 
        housing as described in this subsection.
            ``(2) Permissible designees.--A State receiving grant 
        amounts under this subsection 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 any other 
        qualified instrumentality of the State to receive such grant 
        amounts.
            ``(3) Distribution to states by needs-based formula.--
                    ``(A) In general.--The Secretary shall, by 
                regulation, establish a formula within 12 months of the 
                date of enactment of the Federal Housing Finance 
                Regulatory Reform Act of 2008, to distribute amounts 
                made available under this subsection to each State to 
                provide affordable housing to extremely low- and very 
                low-income households.
                    ``(B) Basis for formula.--The formula required 
                under subparagraph (A) shall include the following:
                            ``(i) The ratio of the shortage of standard 
                        rental units both affordable and available to 
                        extremely low-income renter households in the 
                        State to the aggregate shortage of standard 
                        rental units both affordable and available to 
                        extremely low-income renter households in all 
                        the States.
                            ``(ii) The ratio of the shortage of 
                        standard rental units both affordable and 
                        available to very low-income renter households 
                        in the State to the aggregate shortage of 
                        standard rental units both affordable and 
                        available to very low-income renter households 
                        in all the States.
                            ``(iii) The ratio of extremely low-income 
                        renter households in the State living with 
                        either (I) incomplete kitchen or plumbing 
                        facilities, (II) more than 1 person per room, 
                        or (III) paying more than 50 percent of income 
                        for housing costs, to the aggregate number of 
                        extremely low-income renter households living 
                        with either (IV) incomplete kitchen or plumbing 
                        facilities, (V) more than 1 person per room, or 
                        (VI) paying more than 50 percent of income for 
                        housing costs in all the States.
                            ``(iv) The ratio of very low-income renter 
                        households in the State paying more than 50 
                        percent of income on rent relative to the 
                        aggregate number of very low-income renter 
                        households paying more than 50 percent of 
                        income on rent in all the States.
                            ``(v) The resulting sum calculated from the 
                        factors described in clauses (i) through (iv) 
                        shall be multiplied by the relative cost of 
                        construction in the State. For purposes of this 
                        subclause, the term `cost of construction'--
                                    ``(I) means the cost of 
                                construction or building rehabilitation 
                                in the State relative to the national 
                                cost of construction or building 
                                rehabilitation; and
                                    ``(II) shall be calculated such 
                                that values higher than 1.0 indicate 
                                that the State's construction costs are 
                                higher than the national average, a 
                                value of 1.0 indicates that the State's 
                                construction costs are exactly the same 
                                as the national average, and values 
                                lower than 1.0 indicate that the 
                                State's cost of construction are lower 
                                than the national average.
                    ``(C) Priority.--The formula required under 
                subparagraph (A) shall give priority emphasis and 
                consideration to the factor described in subparagraph 
                (B)(i).
            ``(4) Allocation of grant amounts.--
                    ``(A) Notice.--Not later than 60 days after the 
                date that the Secretary determines the formula amounts 
                described in paragraph (3), the Secretary shall caused 
                to be published in the Federal Register a notice that 
                such amounts shall be so available.
                    ``(B) Grant amount.--In each fiscal year other than 
                fiscal year 2009, the Secretary shall make a grant to 
                each State in an amount that is equal to the formula 
                amount determined under paragraph (3) for that State.
                    ``(C) Minimum state allocations.--If the formula 
                amount determined under paragraph (3) for a fiscal year 
                would allocate less than $3,000,000 to any State, the 
                allocation for such State shall be $3,000,000, and the 
                increase shall be deducted pro rata from the 
                allocations made to all other States.
            ``(5) Allocation plans required.--
                    ``(A) In general.--For each year that a State or 
                State designated entity receives a grant under this 
                subsection, the State or State designated entity shall 
                establish an allocation plan. Such plan shall--
                            ``(i) set forth a plan for the distribution 
                        of grant amounts received by the State or State 
                        designated entity for such year;
                            ``(ii) be based on priority housing needs, 
                        as determined by the State or State designated 
                        entity in accordance with the regulations 
                        established under subsection (g)(2)(C);
                            ``(iii) comply with paragraph (6); and
                            ``(iv) include performance goals that 
                        comply with the requirements established by the 
                        Secretary pursuant to subsection (g)(2).
                    ``(B) Establishment.--In establishing an allocation 
                plan under this paragraph, a State or State designated 
                entity shall--
                            ``(i) notify the public of the 
                        establishment of the plan;
                            ``(ii) provide an opportunity for public 
                        comments regarding the plan;
                            ``(iii) consider any public comments 
                        received regarding the plan; and
                            ``(iv) make the completed plan available to 
                        the public.
                    ``(C) Contents.--An allocation plan of a State or 
                State designated entity under this paragraph shall set 
                forth the requirements for eligible recipients under 
                paragraph (8) to apply for such grant amounts, 
                including a requirement that each such application 
                include--
                            ``(i) a description of the eligible 
                        activities to be conducted using such 
                        assistance; and
                            ``(ii) 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.
            ``(6) Selection of activities funded using housing trust 
        fund grant amounts.--Grant amounts received by a State or State 
        designated entity under this subsection may be used, or 
        committed for use, only for activities that--
                    ``(A) are eligible under paragraph (7) for such 
                use;
                    ``(B) comply with the applicable allocation plan of 
                the State or State designated entity under paragraph 
                (5); and
                    ``(C) are selected for funding by the State or 
                State designated entity in accordance with the process 
                and criteria for such selection established pursuant to 
                subsection (g)(2)(C).
            ``(7) Eligible activities.--Grant amounts allocated to a 
        State or State designated entity under this subsection shall be 
        eligible for use, or for commitment for use, only for 
        assistance for--
                    ``(A) the production, preservation, and 
                rehabilitation of rental housing, including housing 
                under the programs identified in section 1335(a)(2)(B) 
                and for operating costs, except that not less than 75 
                percent of such grant amounts shall be used for the 
                benefit only of extremely low-income families and not 
                more than 25 percent for the benefit only of very low-
                income families; and
                    ``(B) the production, preservation, and 
                rehabilitation of housing for homeownership, including 
                such forms as down payment assistance, closing cost 
                assistance, and assistance for interest rate buy-downs, 
                that--
                            ``(i) 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 subsection be considered to refer 
                                to assistance from affordable housing 
                                fund grant amounts;
                            ``(ii) has an initial purchase price that 
                        meets the requirements of section 215(b)(1) of 
                        the Cranston-Gonzalez National Affordable 
                        Housing Act;
                            ``(iii) 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
                            ``(iv) is made available for purchase only 
                        by, or in the case of assistance under this 
                        subsection, is made available only to 
                        homebuyers who have, before purchase completed 
                        a program of independent financial education 
                        and counseling from an eligible organization 
                        that meets the requirements of section 132 of 
                        the Federal Housing Finance Regulatory Reform 
                        Act of 2008.
            ``(8) Eligible recipients.--Grant amounts allocated to a 
        State or State designated entity under this subsection may be 
        provided only to a recipient that is an organization, agency, 
        or other entity (including a for-profit entity or a nonprofit 
        entity) that--
                    ``(A) has demonstrated experience and capacity to 
                conduct an eligible activity under paragraph (7), as 
                evidenced by its ability to--
                            ``(i) own, construct or rehabilitate, 
                        manage, and operate an affordable multifamily 
                        rental housing development;
                            ``(ii) design, construct or rehabilitate, 
                        and market affordable housing for 
                        homeownership; or
                            ``(iii) provide forms of assistance, such 
                        as down payments, closing costs, or interest 
                        rate buy-downs for purchasers;
                    ``(B) demonstrates the ability and financial 
                capacity to undertake, comply, and manage the eligible 
                activity;
                    ``(C) demonstrates its familiarity 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
                    ``(D) makes such assurances to the State or State 
                designated entity as the Secretary shall, by 
                regulation, require to ensure that the recipient will 
                comply with the requirements of this subsection 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 paragraph (8) 
                that are engaged in by the recipient and funded with 
                such grant amounts.
            ``(9) Limitations on use.--
                    ``(A) Required amount for homeownership 
                activities.--Of the aggregate amount allocated to a 
                State or State designated entity under this subsection 
                not more than 10 percent shall be used for activities 
                under subparagraph (B) of paragraph (7).
                    ``(B) Deadline for commitment or use.--Grant 
                amounts allocated to a State or State designated entity 
                under this subsection shall be used or committed for 
                use within 2 years of the date that such grant amounts 
                are made available to the State or State designated 
                entity. The Secretary shall recapture any such amounts 
                not so used or committed for use and reallocate such 
                amounts under this subsection in the first year after 
                such recapture.
                    ``(C) Use of returns.--The Secretary shall, by 
                regulation, provide that any return on a loan or other 
                investment of any grant amount used by a State or State 
                designated entity to provide a loan under this 
                subsection shall be treated, for purposes of 
                availability to and use by the State or State 
                designated entity, as a grant amount authorized under 
                this subsection.
                    ``(D) Prohibited uses.--The Secretary shall, by 
                regulation--
                            ``(i) set forth prohibited uses of grant 
                        amounts allocated under this subsection, 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;
                            ``(ii) provide that, except as provided in 
                        clause (iii), grant amounts of a State or State 
                        designated entity may not be used for 
                        administrative, outreach, or other costs of--
                                    ``(I) the State or State designated 
                                entity; or
                                    ``(II) any other recipient of such 
                                grant amounts; and
                            ``(iii) limit the amount of any grant 
                        amounts for a year that may be used by the 
                        State or State designated entity for 
                        administrative costs of carrying out the 
                        program required under this subsection, 
                        including home ownership counseling, to a 
                        percentage of such grant amounts of the State 
                        or State designated entity for such year, which 
                        may not exceed 10 percent.
                    ``(E) 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 grant amounts 
                used under this section for eligible activities under 
                paragraph (7). 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 such grant amounts, but only to the extent 
                that such purchases by the enterprises are funded other 
                than with such grant amounts.
    ``(d) Reduction for Failure To Obtain Return of Misused Funds.--If 
in any year a State or State designated entity fails to obtain 
reimbursement or return of the full amount required under subsection 
(e)(1)(B) to be reimbursed or returned to the State or State designated 
entity during such year--
            ``(1) except as provided in paragraph (2)--
                    ``(A) the amount of the grant for the State or 
                State designated entity for the succeeding year, as 
                determined pursuant to this section, shall be reduced 
                by the amount by which such amounts required to be 
                reimbursed or returned exceed the amount actually 
                reimbursed or returned; and
                    ``(B) the amount of the grant for the succeeding 
                year for each other State or State designated entity 
                whose grant is not reduced pursuant to subparagraph (A) 
                shall be increased by the amount determined by applying 
                the formula established pursuant to this section to the 
                total amount of all reductions for all State or State 
                designated entities for such year pursuant to 
                subparagraph (A); or
            ``(2) 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 section will not be 
        made, the State or State designated entity shall pay to the 
        Secretary for reallocation among the other grantees an amount 
        equal to the amount of the reduction for the entity that would 
        otherwise apply under paragraph (1)(A).
    ``(e) Accountability of Recipients and Grantees.--
            ``(1) Recipients.--
                    ``(A) Tracking of funds.--The Secretary shall--
                            ``(i) require each State or State 
                        designated entity to develop and maintain a 
                        system to ensure that each recipient of 
                        assistance under this section 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 State or State 
                        designated entity and recipients, regarding 
                        assistance under this section, which shall 
                        include--
                                    ``(I) appropriate periodic 
                                financial and project reporting, record 
                                retention, and audit requirements for 
                                the duration of the assistance 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 Secretary determines are necessary 
                                to ensure appropriate administration 
                                and compliance.
                    ``(B) Misuse of funds.--
                            ``(i) Reimbursement requirement.--If any 
                        recipient of assistance under this section 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 State or State 
                        designated entity shall require that, within 12 
                        months after the determination of such misuse, 
                        the recipient shall reimburse the State or 
                        State designated entity for such misused 
                        amounts and return to the State or State 
                        designated entity any such amounts 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 made by the Secretary or made 
                        by the State or State designated entity, 
                        provided that--
                                    ``(I) the State or State designated 
                                entity provides notification of the 
                                determination to the Secretary for 
                                review, in the discretion of the 
                                Secretary, of the determination; and
                                    ``(II) the Secretary does not 
                                subsequently reverse the determination.
            ``(2) Grantees.--
                    ``(A) Report.--
                            ``(i) In general.--The Secretary shall 
                        require each State or State designated entity 
                        receiving grant amounts in any given year under 
                        this section to submit a report, for such year, 
                        to the Secretary that--
                                    ``(I) describes the activities 
                                funded under this section during such 
                                year with such grant amounts; and
                                    ``(II) the manner in which the 
                                State or State designated entity 
                                complied during such year with any 
                                allocation plan established pursuant to 
                                subsection (c).
                            ``(ii) Public availability.--The Secretary 
                        shall make such reports pursuant to this 
                        subparagraph publicly available.
                    ``(B) Misuse of funds.--If the Secretary 
                determines, after reasonable notice and opportunity for 
                hearing, that a State or State designated entity has 
                failed to comply substantially with any provision of 
                this section, and until the Secretary is satisfied that 
                there is no longer any such failure to comply, the 
                Secretary shall--
                            ``(i) reduce the amount of assistance under 
                        this section to the State or State designated 
                        entity by an amount equal to the amount of 
                        grant amounts which were not used in accordance 
                        with this section;
                            ``(ii) require the State or State 
                        designated entity to repay the Secretary any 
                        amount of the grant which was not used in 
                        accordance with this section;
                            ``(iii) limit the availability of 
                        assistance under this section to the State or 
                        State designated entity to activities or 
                        recipients not affected by such failure to 
                        comply; or
                            ``(iv) terminate any assistance under this 
                        section to the State or State designated 
                        entity.
    ``(f) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Extremely low-income renter household.--The term 
        `extremely low-income renter household' means a household whose 
        income is not in excess of 30 percent of the area median 
        income, with adjustments for smaller and larger families, as 
        determined by the Secretary.
            ``(2) Recipient.--The term `recipient' means an individual 
        or entity that receives assistance from a State or State 
        designated entity from amounts made available to the State or 
        State designated entity under this section.
            ``(3) Shortage of standard rental units both affordable and 
        available to extremely low-income renter households.--
                    ``(A) In general.--The term `shortage of standard 
                rental units both affordable and available to extremely 
                low-income renter households' means for any State or 
                other geographical area the gap between--
                            ``(i) the number of units with complete 
                        plumbing and kitchen facilities with a rent 
                        that is 30 percent or less of 30 percent of the 
                        adjusted area median income as determined by 
                        the Secretary that are occupied by extremely 
                        low-income renter households or are vacant for 
                        rent; and
                            ``(ii) the number of extremely low-income 
                        renter households.
                    ``(B) Rule of construction.--If the number of units 
                described in subparagraph (A)(i) exceeds the number of 
                extremely low-income households as described in 
                subparagraph (A)(ii), there is no shortage.
            ``(4) Shortage of standard rental units both affordable and 
        available to very low-income renter households.--
                    ``(A) In general.--The term `shortage of standard 
                rental units both affordable and available to very low-
                income renter households' means for any State or other 
                geographical area the gap between--
                            ``(i) the number of units with complete 
                        plumbing and kitchen facilities with a rent 
                        that is 30 percent or less of 50 percent of the 
                        adjusted area median income as determined by 
                        the Secretary that are occupied by very low-
                        income renter households or are vacant for 
                        rent; and
                            ``(ii) the number of very low-income renter 
                        households.
                    ``(B) Rule of construction.--If the number of units 
                described in subparagraph (A)(i) exceeds the number of 
                very low-income households as described in subparagraph 
                (A)(ii), there is no shortage.
            ``(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.
            ``(6) Very low-income renter households.--The term `very 
        low-income renter households' means a household whose income is 
        in excess of 30 percent but not greater than 50 percent of the 
        area median income, with adjustments for smaller and larger 
        families, as determined by the Secretary.
    ``(g) Regulations.--
            ``(1) In general.--The Secretary shall issue regulations to 
        carry out this section.
            ``(2) Required contents.--The regulations issued under this 
        subsection shall include--
                    ``(A) a requirement that the Secretary ensure that 
                the use of grant amounts under this section by States 
                or State designated entities is audited not less than 
                annually to ensure compliance with this section;
                    ``(B) authority for the Secretary to audit, provide 
                for an audit, or otherwise verify a State or State 
                designated entity's activities to ensure compliance 
                with this section;
                    ``(C) requirements for a process for application 
                to, and selection by, each State or State designated 
                entity for activities meeting the State or State 
                designated entity's priority housing needs to be funded 
                with grant amounts under this section, which shall 
                provide for priority in funding to be based upon--
                            ``(i) geographic diversity;
                            ``(ii) ability to obligate amounts and 
                        undertake activities so funded in a timely 
                        manner;
                            ``(iii) in the case of rental housing 
                        projects under subsection (c)(7)(A), the extent 
                        to which rents for units in the project funded 
                        are affordable, especially for extremely low-
                        income families;
                            ``(iv) in the case of rental housing 
                        projects under subsection (c)(7)(A), the extent 
                        of the duration for which such rents will 
                        remain affordable;
                            ``(v) the extent to which the application 
                        makes use of other funding sources; and
                            ``(vi) the merits of an applicant's 
                        proposed eligible activity;
                    ``(D) requirements to ensure that grant amounts 
                provided to a State or State designated entity under 
                this section that are used for rental housing under 
                subsection (c)(7)(A) are used only for the benefit of 
                extremely low- and very low-income families; and
                    ``(E) requirements and standards for establishment, 
                by a State or State designated entity, for use of grant 
                amounts in 2009 and subsequent years of performance 
                goals, benchmarks, and timetables for the production, 
                preservation, and rehabilitation of affordable rental 
                and homeownership housing with such grant amounts.
    ``(h) Affordable Housing Trust Fund.--If, after the date of 
enactment of the Federal Housing Finance Regulatory 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 (c), the Secretary shall in such subsequent year and 
any remaining years referred to in subsection (c) transfer to such 
affordable housing trust fund the aggregate amount allocated pursuant 
to subsection (c) in such year. 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 
(c)(9)(D).
    ``(i) Funding Accountability and Transparency.--Any grant under 
this section to a grantee by a State or State designated entity, any 
assistance provided to a recipient by a State or State designated 
entity, and any grant, award, or other assistance from an affordable 
housing trust fund referred to in subsection (h) 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 Secretary 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.

``SEC. 1339. CAPITAL MAGNET FUND.

    ``(a) Establishment.--There is established in the Treasury of the 
United States a trust fund to be known as the Capital Magnet Fund, 
which shall be a special account within the Community Development 
Financial Institutions Fund.
    ``(b) Deposits to Trust Fund.--The Capital Magnet Fund shall 
consist of--
            ``(1) any amounts transferred to the Fund pursuant to 
        section 1337; and
            ``(2) any amounts as are or may be appropriated, 
        transferred, or credited to such Fund under any other 
        provisions of law.
    ``(c) Expenditures From Trust Fund.--Amounts in the Capital Magnet 
Fund shall be available to the Secretary of the Treasury to carry out a 
competitive grant program to attract private capital for and increase 
investment in--
            ``(1) the development, preservation, rehabilitation, or 
        purchase of affordable housing for primarily extremely low-, 
        very low-, and low-income families; and
            ``(2) economic development activities or community service 
        facilities, such as day care centers, workforce development 
        centers, and health care clinics, which in conjunction with 
        affordable housing activities implement a concerted strategy to 
        stabilize or revitalize a low-income area or underserved rural 
        area.
    ``(d) Federal Assistance.--All assistance provided using amounts in 
the Capital Magnet Fund shall be considered to be Federal financial 
assistance.
    ``(e) Eligible Grantees.--A grant under this section may be made, 
pursuant to such requirements as the Secretary of the Treasury shall 
establish for experience and success in attracting private financing 
and carrying out the types of activities proposed under the application 
of the grantee, only to--
            ``(1) a Treasury certified community development financial 
        institution; or
            ``(2) a nonprofit organization having as 1 of its principal 
        purposes the development or management of affordable housing.
    ``(f) Eligible Uses.--Grant amounts awarded from the Capital Magnet 
Fund pursuant to this section may be used for the purposes described in 
paragraphs (1) and (2) of subsection (c), including for the following 
uses:
            ``(1) To provide loan loss reserves.
            ``(2) To capitalize a revolving loan fund.
            ``(3) To capitalize an affordable housing fund.
            ``(4) To capitalize a fund to support activities described 
        in subsection (c)(2).
            ``(5) For risk-sharing loans.
    ``(g) Applications.--
            ``(1) In general.--The Secretary of the Treasury shall 
        provide, in a competitive application process established by 
        regulation, for eligible grantees under subsection (e) to 
        submit applications for Capital Magnet Fund grants to the 
        Secretary at such time and in such manner as the Secretary 
        shall determine.
            ``(2) Content of application.--The application required 
        under paragraph (1) shall include a detailed description of--
                    ``(A) the types of affordable housing, economic, 
                and community revitalization projects that support or 
                sustain residents of an affordable housing project 
                funded by a grant under this section for which such 
                grant amounts would be used, including the proposed use 
                of eligible grants as authorized under this section;
                    ``(B) the types, sources, and amounts of other 
                funding for such projects; and
                    ``(C) the expected time frame of any grant used for 
                such project.
    ``(h) Grant Limitation.--
            ``(1) In general.--Any 1 eligible grantee and its 
        subsidiaries and affiliates may not be awarded more than 15 
        percent of the aggregate funds available for grants during any 
        year from the Capital Magnet Fund.
            ``(2) Geographic diversity.--
                    ``(A) Goal.--The Secretary of the Treasury shall 
                seek to fund activities in geographically diverse areas 
                of economic distress, including metropolitan and 
                underserved rural areas in every State.
                    ``(B) Diversity defined.--For purposes of this 
                paragraph, geographic diversity includes those areas 
                that meet objective criteria of economic distress 
                developed by the Secretary of the Treasury, which may 
                include--
                            ``(i) the percentage of low-income families 
                        or the extent of poverty;
                            ``(ii) the rate of unemployment or 
                        underemployment;
                            ``(iii) extent of blight and disinvestment;
                            ``(iv) projects that target extremely low-, 
                        very low-, and low-income families in or 
                        outside a designated economic distress area; or
                            ``(v) any other criteria designated by the 
                        Secretary of the Treasury.
            ``(3) Leverage of funds.--Each grant from the Capital 
        Magnet Fund awarded under this section shall be reasonably 
        expected to result in eligible housing, or economic and 
        community development projects that support or sustain an 
        affordable housing project funded by a grant under this section 
        whose aggregate costs total at least 10 times the grant amount.
            ``(4) Commitment for use deadline.--Amounts made available 
        for grants under this section shall be committed for use within 
        2 years of the date of such allocation. The Secretary of the 
        Treasury shall recapture into the Capital Magnet Fund any 
        amounts not so used or committed for use and allocate such 
        amounts in the first year after such recapture.
            ``(5) Lobbying restrictions.--No assistance or amounts made 
        available under this section may be expended by an eligible 
        grantee to pay any person to influence or attempt to influence 
        any agency, elected official, officer or employee of a State or 
        local government in connection with the making, award, 
        extension, continuation, renewal, amendment, or modification of 
        any State or local government contract, grant, loan, or 
        cooperative agreement as such terms are defined in section 1352 
        of title 31, United States Code.
            ``(6) Prohibition of consideration of use for meeting 
        housing goals or duty to serve.--In determining the compliance 
        of the enterprises with the housing goals under this section 
        and the duty to serve underserved markets under section 1335, 
        the Director of the Federal Housing Finance Agency may not 
        consider any Capital Magnet Fund amounts used under this 
        section for eligible activities under subsection (f). The 
        Director of the Federal Housing Finance Agency 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 
        Capital Magnet Fund grant amounts, but only to the extent that 
        such purchases by the enterprises are funded other than with 
        such grant amounts.
            ``(7) Accountability of recipients and grantees.--
                    ``(A) Tracking of funds.--The Secretary of the 
                Treasury shall--
                            ``(i) require each grantee to develop and 
                        maintain a system to ensure that each recipient 
                        of assistance from the Capital Magnet Fund 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 the Capital 
                        Magnet Fund, regarding assistance from the 
                        Capital Magnet Fund, which shall include--
                                    ``(I) appropriate periodic 
                                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 Secretary determines are necessary 
                                to ensure appropriate grant 
                                administration and compliance.
                    ``(B) Misuse of funds.--If the Secretary of the 
                Treasury 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 Secretary is satisfied that there is no 
                longer any such failure to comply, the Secretary 
                shall--
                            ``(i) reduce the amount of assistance under 
                        this section to the grantee by an amount equal 
                        to the amount of Capital Magnet Fund grant 
                        amounts which were not used in accordance with 
                        this section;
                            ``(ii) require the grantee to repay the 
                        Secretary any amount of the Capital Magnet 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.
    ``(i) Periodic Reports.--
            ``(1) In general.--The Secretary of the Treasury shall 
        submit a report, on a periodic basis, to the Committee on 
        Banking, Housing, and Urban Affairs of the Senate and the 
        Committee on Financial Services of the House of Representatives 
        describing the activities to be funded under this section.
            ``(2) Reports available to public.--The Secretary of the 
        Treasury shall make the reports required under paragraph (1) 
        publicly available.
    ``(j) Regulations.--
            ``(1) In general.--The Secretary of the Treasury shall 
        issue regulations to carry out this section.
            ``(2) Required contents.--The regulations issued under this 
        subsection shall include--
                    ``(A) authority for the Secretary to audit, provide 
                for an audit, or otherwise verify an enterprise's 
                activities, to ensure compliance with this section;
                    ``(B) a requirement that the Secretary ensure that 
                the allocation of each enterprise is audited not less 
                than annually to ensure compliance with this section; 
                and
                    ``(C) requirements for a process for application 
                to, and selection by, the Secretary for activities to 
                be funded with amounts from the Capital Magnet Fund, 
                which shall provide that--
                            ``(i) funds be fairly distributed to urban, 
                        suburban, and rural areas; and
                            ``(ii) selection shall be based upon 
                        specific criteria, including a prioritization 
                        of funding based upon--
                                    ``(I) the ability to use such funds 
                                to generate additional investments;
                                    ``(II) affordable housing need 
                                (taking into account the distinct needs 
                                of different regions of the country); 
                                and
                                    ``(III) ability to obligate amounts 
                                and undertake activities so funded in a 
                                timely manner.''.

SEC. 1132. FINANCIAL EDUCATION AND COUNSELING.

    (a) Goals.--Financial education and counseling under this section 
shall have the goal of--
            (1) increasing the financial knowledge and decision making 
        capabilities of prospective homebuyers;
            (2) assisting prospective homebuyers to develop monthly 
        budgets, build personal savings, finance or plan for major 
        purchases, reduce their debt, improve their financial 
        stability, and set and reach their financial goals;
            (3) helping prospective homebuyers to improve their credit 
        scores by understanding the relationship between their credit 
        histories and their credit scores; and
            (4) educating prospective homebuyers about the options 
        available to build savings for short- and long-term goals.
    (b) Grants.--
            (1) In general.--The Secretary of the Treasury (in this 
        section referred to as the ``Secretary'') shall make grants to 
        eligible organizations to enable such organizations to provide 
        a range of financial education and counseling services to 
        prospective homebuyers.
            (2) Selection.--The Secretary shall select eligible 
        organizations to receive assistance under this section based on 
        their experience and ability to provide financial education and 
        counseling services that result in documented positive 
        behavioral changes.
    (c) Eligible Organizations.--
            (1) In general.--For purposes of this section, the term 
        ``eligible organization'' means an organization that is--
                    (A) certified in accordance with section 106(e)(1) 
                of the Housing and Urban Development Act of 1968 (12 
                U.S.C. 1701x(e)); or
                    (B) certified by the Office of Financial Education 
                of the Department of the Treasury for purposes of this 
                section, in accordance with paragraph (2).
            (2) OFE certification.--To be certified by the Office of 
        Financial Education for purposes of this section, an eligible 
        organization shall be--
                    (A) a housing counseling agency certified by the 
                Secretary of Housing and Urban Development under 
                section 106(e) of the Housing and Urban Development Act 
                of 1968;
                    (B) a State, local, or tribal government agency;
                    (C) a community development financial institution 
                (as defined in section 103(5) of the Community 
                Development Banking and Financial Institutions Act of 
                1994 (12 U.S.C. 4702(5)) or a credit union; or
                    (D) any collaborative effort of entities described 
                in any of subparagraphs (A) through (C).
    (d) Authority for Pilot Projects.--
            (1) In general.--The Secretary of the Treasury shall 
        authorize not more than 5 pilot project grants to eligible 
        organizations under subsection (c) in order to--
                    (A) carry out the services under this section; and
                    (B) provide such other services that will improve 
                the financial stability and economic condition of low- 
                and moderate-income and low-wealth individuals.
            (2) Goal.--The goal of the pilot project grants under this 
        subsection is to--
                    (A) identify successful methods resulting in 
                positive behavioral change for financial empowerment; 
                and
                    (B) establish program models for organizations to 
                carry out effective counseling services.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary such sums as are necessary to carry out 
this section and for the provision of additional financial educational 
services.
    (f) Study and Report on Effectiveness and Impact.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study on the effectiveness and impact of 
        the grant program established under this section. Not later 
        than 3 years after the date of enactment of this Act, the 
        Comptroller General shall submit a report on the results of 
        such study to the Committee on Banking, Housing, and Urban 
        Affairs of the Senate and the Committee on Financial Services 
        of the House of Representatives.
            (2) Content of study.--The study required under paragraph 
        (1) shall include an evaluation of the following:
                    (A) The effectiveness of the grant program 
                established under this section in improving the 
                financial situation of homeowners and prospective 
                homebuyers served by the grant program.
                    (B) The extent to which financial education and 
                counseling services have resulted in positive 
                behavioral changes.
                    (C) The effectiveness and quality of the eligible 
                organizations providing financial education and 
                counseling services under the grant program.
    (g) Regulations.--The Secretary is authorized to promulgate such 
regulations as may be necessary to implement and administer the grant 
program authorized by this section.

SEC. 1133. TRANSFER AND RIGHTS OF CERTAIN HUD EMPLOYEES.

    (a) Transfer.--Each employee of the Department of Housing and Urban 
Development whose position responsibilities primarily involve the 
establishment and enforcement of the housing goals under subpart B of 
part 2 of subtitle A of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4561 et seq.) shall be 
transferred to the Federal Housing Finance Agency for employment, not 
later than the effective date of the Federal Housing Finance Regulatory 
Reform Act of 2008, and such transfer shall be deemed a transfer of 
function for purposes of section 3503 of title 5, United States Code.
    (b) Guaranteed Positions.--
            (1) In general.--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.
            (2) No involuntary separation or reduction.--An employee 
        transferred under subsection (a) holding a permanent position 
        on the day immediately preceding the transfer may not be 
        involuntarily separated or reduced in grade or compensation 
        during the 12-month period beginning on the date of transfer, 
        except for cause, or, in the case of a temporary employee, 
        separated in accordance with the terms of the appointment of 
        the employee.
    (c) Appointment Authority for Excepted and Senior Executive Service 
Employees.--
            (1) In general.--In the case of an employee occupying a 
        position 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 position shall be transferred, subject to paragraph (2).
            (2) Decline of transfer.--The Director may decline a 
        transfer of authority under paragraph (1) to the extent that 
        such authority relates to--
                    (A) a position excepted from the competitive 
                service because of its confidential, policymaking, 
                policy-determining, or policy-advocating character; or
                    (B) a noncareer position in the Senior Executive 
                Service (within the meaning of section 3132(a)(7) of 
                title 5, United States Code).
    (d) Reorganization.--If the Director determines, after the end of 
the 1-year period beginning on the effective date of the Federal 
Housing Finance Regulatory Reform Act of 2008, that a reorganization of 
the combined workforce is required, that reorganization shall be deemed 
a major reorganization for purposes of affording affected employee 
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 described under subsection 
        (a) accepting employment with the 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 Agency or the Department of 
        Housing and Urban Development, as applicable, including 
        insurance, to which such employee belongs on such effective 
        date, 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.--
                    (A) In general.--The difference in the costs 
                between the benefits which would have been provided by 
                the Department of Housing and Urban Development and 
                those provided by this section shall be paid by the 
                Director.
                    (B) Health insurance.--If any employee elects to 
                give up membership in a health insurance program or the 
                health insurance program is not continued by the 
                Director, the employee shall be permitted to select an 
                alternate Federal health insurance program not later 
                than 30 days after the date of such election or notice, 
                without regard to any other regularly scheduled open 
                season.

                  Subtitle C--Prompt Corrective Action

SEC. 1141. CRITICAL CAPITAL LEVELS.

    (a) In General.--Section 1363 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4613) is 
amended--
            (1) by striking ``For'' and inserting ``(a) Enterprises.--
        For''; and
            (2) 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.''.
    (b) Regulations.--Not later than the expiration of the 180-day 
period beginning on the date of enactment of this Act, the Director of 
the Federal Housing Finance Agency shall issue regulations pursuant to 
section 1363(b) of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (as added by this section) establishing the 
critical capital level under such section.

SEC. 1142. CAPITAL CLASSIFICATIONS.

    (a) In General.--Section 1364 of the Federal Housing Enterprises 
Financial Safety and Soundness 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:
    ``(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 the value of collateral pledged as 
                security has decreased significantly or that the value 
                of the property subject to any mortgage held by the 
                regulated entity (or securitized in the case of an 
                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 date of enactment of this Act, the Director of 
the Federal Housing Finance Agency shall issue regulations to carry out 
section 1364(b) of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (as added by this section), relating to capital 
classifications for the Federal Home Loan Banks.

SEC. 1143. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED REGULATED 
              ENTITIES.

    Section 1365 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4615) is amended--
            (1) by striking ``the enterprise'' each place that term 
        appears and inserting ``the regulated entity'';
            (2) by striking ``An enterprise'' each place that term 
        appears and inserting ``A regulated entity'';
            (3) by striking ``an enterprise'' each place that term 
        appears and inserting ``a regulated entity'';
            (4) in subsection (a)--
                    (A) by redesignating paragraphs (1) and (2) as 
                paragraphs (2) and (3), respectively;
                    (B) by inserting before paragraph (2), as 
                redesignated, the following:
            ``(1) Required monitoring.--The Director shall--
                    ``(A) closely monitor the condition of any 
                undercapitalized regulated entity;
                    ``(B) closely monitor compliance with the capital 
                restoration plan, restrictions, and requirements 
                imposed on an undercapitalized regulated entity under 
                this section; and
                    ``(C) periodically review the plan, restrictions, 
                and requirements applicable to an undercapitalized 
                regulated entity to determine whether the plan, 
                restrictions, and requirements are achieving the 
                purpose of this section.''; and
                    (C) by adding at the end the following:
            ``(4) Restriction of asset growth.--An undercapitalized 
        regulated entity shall not permit its average total assets 
        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 capital restoration plan; and
                    ``(C) the ratio of tangible equity to assets of the 
                regulated entity increases during the calendar quarter 
                at a rate sufficient to enable the regulated entity to 
                become adequately capitalized within a reasonable time.
            ``(5) Prior approval of acquisitions and new activities.--
        An undercapitalized regulated entity shall not, directly or 
        indirectly, acquire any interest in any entity or engage in any 
        new activity, unless--
                    ``(A) the Director has accepted the capital 
                restoration plan of the regulated entity, the regulated 
                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 subtitle.'';
            (5) in subsection (b)--
                    (A) in the subsection heading, by striking 
                ``Discretionary'';
                    (B) in the matter preceding paragraph (1), by 
                striking ``may'' and inserting ``shall''; and
                    (C) in paragraph (2)--
                            (i) by striking ``make, in good faith, 
                        reasonable efforts necessary to''; and
                            (ii) by striking the period at the end and 
                        inserting ``in any material respect.''; and
            (6) by striking subsection (c) and inserting the following:
    ``(c) Other Discretionary Safeguards.--The Director may take, with 
respect to an undercapitalized regulated entity, any of the actions 
authorized to be taken under section 1366 with respect to a 
significantly undercapitalized regulated entity, if the Director 
determines that such actions are necessary to carry out the purpose of 
this subtitle.''.

SEC. 1144. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
              UNDERCAPITALIZED REGULATED ENTITIES.

    Section 1366 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4616) is amended--
            (1) in subsection (a)(2), by striking ``undercapitalized 
        enterprise'' and inserting ``undercapitalized'';
            (2) by striking ``the enterprise'' each place that term 
        appears and inserting ``the regulated entity'';
            (3) by striking ``An enterprise'' each place that term 
        appears and inserting ``A regulated entity'';
            (4) by striking ``an enterprise'' each place that term 
        appears and inserting ``a regulated entity'';
            (5) in subsection (b)--
                    (A) in the subsection heading, by striking 
                ``Discretionary Supervisory'' and inserting 
                ``Specific'';
                    (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, 
                1 or more'';
                    (C) by striking paragraph (6);
                    (D) by redesignating paragraph (5) as paragraph 
                (6);
                    (E) by inserting after paragraph (4) the following:
            ``(5) Improvement of management.--Take 1 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 
                date on which the regulated entity became 
                undercapitalized. Dismissal under this subparagraph 
                shall not be construed to be a removal pursuant to the 
                enforcement powers of the Director under 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
                    (F) by adding at the end the following:
            ``(7) 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 other actions 
        specified in this subsection.''; and
            (6) by striking subsection (c) and inserting the following:
    ``(c) Restriction on Compensation of Executive Officers.--A 
regulated entity that is classified as significantly undercapitalized 
in accordance with section 1364 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 the average rate of compensation of that officer 
        (excluding bonuses, stock options, and profit sharing) during 
        the 12 calendar months preceding the calendar month in which 
        the regulated entity became significantly undercapitalized.''.

SEC. 1145. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED 
              ENTITIES.

    (a) In General.--Section 1367 of the Federal Housing Enterprises 
Financial Safety and Soundness 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 the Agency as Conservator or Receiver.--
            ``(1) In general.--Notwithstanding any other provision of 
        Federal or State law, the Director may appoint the Agency as 
        conservator or receiver for a regulated entity in the manner 
        provided under paragraph (2) or (4). All references to the 
        conservator or receiver under this section are references to 
        the Agency acting as conservator or receiver.
            ``(2) Discretionary appointment.--The Agency may, at the 
        discretion of the Director, be appointed conservator or 
        receiver for the purpose of reorganizing, rehabilitating, or 
        winding up the affairs of a regulated entity.
            ``(3) Grounds for discretionary appointment of conservator 
        or receiver.--The grounds for appointing conservator or 
        receiver for any regulated entity under paragraph (2) are as 
        follows:
                    ``(A) 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.
                    ``(B) Unsafe or unsound condition.--An unsafe or 
                unsound condition to transact business.
                    ``(C) Cease and desist orders.--Any willful 
                violation of a cease and desist order that has become 
                final.
                    ``(D) 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.
                    ``(E) 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.
                    ``(F) 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)).
                    ``(G) 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.
                    ``(H) Consent.--The regulated entity, by resolution 
                of its board of directors or its shareholders or 
                members, consents to the appointment.
                    ``(I) Undercapitalization.--The regulated entity is 
                undercapitalized or significantly undercapitalized (as 
                defined in section 1364(a)(3)), 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 a 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.
                    ``(J) Critical undercapitalization.--The regulated 
                entity is critically undercapitalized, as defined in 
                section 1364(a)(4).
                    ``(K) 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 60 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 60 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 undercapitalized 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) does 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 of the Agency as receiver of a regulated 
                entity under this section shall immediately terminate 
                any conservatorship established for the regulated 
                entity under this title.
            ``(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 
                home office 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;
                            ``(iv) preserve and conserve the assets and 
                        property of the regulated entity; and
                            ``(v) provide by contract for assistance in 
                        fulfilling any function, activity, action, or 
                        duty of the Agency as conservator or receiver.
                    ``(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.
                    ``(E) Additional powers as receiver.--In any case 
                in which the Agency is acting as receiver, the Agency 
                shall place the regulated entity in liquidation and 
                proceed to realize upon the assets of the regulated 
                entity in such manner as the Agency deems appropriate, 
                including through the sale of assets, the transfer of 
                assets to a limited-life regulated entity established 
                under subsection (i), or the exercise of any other 
                rights or privileges granted to the Agency under this 
                paragraph.
                    ``(F) Organization of new enterprise.--The Agency 
                shall, as receiver for an enterprise, organize a 
                successor enterprise that will operate pursuant to 
                subsection (i).
                    ``(G) Transfer or sale of assets and liabilities.--
                The Agency may, as conservator or receiver, transfer or 
                sell any asset or liability of the regulated entity in 
                default, and may do so without any approval, 
                assignment, or consent with respect to such transfer or 
                sale.
                    ``(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 that are due and 
                payable at the time of the appointment of the Agency as 
                conservator or receiver, in accordance with the 
                prescriptions and limitations of this section.
                    ``(I) Subpoena authority.--
                            ``(i) In general.--
                                    ``(I) Agency authority.--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 under this subparagraph, in the 
                                same manner as such provisions apply 
                                under that section.
                            ``(ii) Subpoena.--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 1379B.
                    ``(J) 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.
                    ``(K) Other provisions.--
                            ``(i) Shareholders and creditors of failed 
                        regulated entity.--Notwithstanding any other 
                        provision of law, the appointment of the Agency 
                        as receiver for a regulated entity pursuant to 
                        paragraph (2) or (4) of subsection (a) and its 
                        succession, by operation of law, to the rights, 
                        titles, powers, and privileges described in 
                        subsection (b)(2)(A) shall terminate all rights 
                        and claims that the stockholders and creditors 
                        of the regulated entity may have against the 
                        assets or charter of the regulated entity or 
                        the Agency arising as a result of their status 
                        as stockholders or creditors, except for their 
                        right to payment, resolution, or other 
                        satisfaction of their claims, as permitted 
                        under subsections (b)(9), (c), and (e).
                            ``(ii) Assets of regulated entity.--
                        Notwithstanding any other provision of law, for 
                        purposes of this section, the charter of a 
                        regulated entity shall not be considered an 
                        asset of the regulated entity.
            ``(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 
                        date of publication of such notice; and
                            ``(ii) republish such notice approximately 
                        1 month and 2 months, respectively, after the 
                        date of 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 
                        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) by the receiver from any claimant which is 
                proved to the satisfaction of the receiver.
                    ``(C) Disallowance of claims filed after 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--
                                    ``(I) any extension of credit from 
                                any Federal Reserve Bank, Federal Home 
                                Loan Bank, or the United States 
                                Treasury; or
                                    ``(II) any security interest in the 
                                assets of the regulated entity securing 
                                any such extension of credit.
                    ``(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.
                    ``(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 under this 
                        subparagraph, 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 on which 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 date of 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 on which 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 that 
                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 officer or representative 
                of the regulated entity.
                    ``(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 the regulated entity, 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 the 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--
                            ``(i) shall have all of 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) shall 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, or upon the charter, of a 
                regulated entity for which the Agency has been 
                appointed 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 or charter 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--
                            ``(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 on which 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 on which 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 clause (ii) 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 limitations applicable under State 
                law.
                    ``(B) Claims described.--A tort claim referred to 
                under clause (i) 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 on which 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 an 
                entity-affiliated party, or any person determined by 
                the conservator or receiver to be 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 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 conservator or receiver 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 conservator or receiver.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this subsection, any final and 
                unappealable judgment for monetary damages entered 
                against the conservator or receiver for the breach of 
                an agreement executed or approved in writing by the 
                conservator or receiver after the date of its 
                appointment, shall be paid as an administrative expense 
                of the conservator or receiver.
                    ``(B) No limitation of power.--Nothing in this 
                paragraph shall be construed to limit the power of the 
                conservator or receiver 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 the 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 any 
                        person other than the regulated entity shall 
                        not be available to satisfy the claims of 
                        creditors generally, except that nothing in 
                        this clause shall be construed to expand or 
                        otherwise affect the authority of any regulated 
                        entity.
                            ``(ii) Holding of mortgages.--Any mortgage, 
                        pool of mortgages, or interest in a pool of 
                        mortgages described in 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 
                        accordance with the terms of the agreement 
                        creating such trust, custodial, or other agency 
                        arrangement.
                            ``(iii) Liability of conservator or 
                        receiver.--The liability of the conservator or 
                        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 with 
                        the regulations of the Director.
    ``(c) Priority of Expenses and Unsecured Claims.--
            ``(1) In general.--Unsecured claims against a regulated 
        entity, or the receiver therefor, 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 (which is not a liability described 
                under subparagraph (C) or (D).
                    ``(C) Any obligation subordinated to general 
                creditors (which is not an obligation described under 
                subparagraph (D)).
                    ``(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 receiver may take any action 
        (including making payments) that does not comply with this 
        subsection, if--
                    ``(A) the Director determines that such action is 
                necessary to maximize the value of the assets of the 
                regulated entity, to maximize the present value return 
                from the sale or other disposition of the assets of the 
                regulated entity, or to minimize the amount of any loss 
                realized upon the sale or other disposition of the 
                assets of the regulated entity; and
                    ``(B) all creditors that are similarly situated 
                under paragraph (1) receive not less than the amount 
                provided in subsection (e)(2).
            ``(3) Definition.--As used in this subsection, the term 
        `administrative expenses of the receiver' includes--
                    ``(A) the actual, necessary costs and expenses 
                incurred by the receiver in preserving the assets of a 
                failed regulated entity or liquidating or otherwise 
                resolving the affairs of a failed regulated entity; and
                    ``(B) any obligations that the receiver 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 on 
                        which--
                                    ``(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 subparagraph 
                (A)--
                            ``(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 
                subparagraph (A)--
                            ``(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) 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 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 
                        on which 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 the 
                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 title (other than subsection 
                (b)(9)(B) of this section), any other Federal law, or 
                the law of any State, no person shall be stayed or 
                prohibited from exercising--
                            ``(i) any right of that person 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; 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.--
                Subsection (b)(10) 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 provision of 
                        Federal or State law 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 the following definitions shall apply:
                            ``(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 on which 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' (including 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 section 3 
                                of the Securities Exchange Act of 
                                1934), mortgage loans, interests in 
                                mortgage-related securities or mortgage 
                                loans, eligible bankers' acceptances, 
                                qualified foreign government securities 
                                (defined for purposes of this clause as 
                                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), 
                                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.
                            ``(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.
                            ``(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 equity of redemption of the regulated 
                        entity.
                    ``(E) Certain protections in event of appointment 
                of conservator.--Notwithstanding any other provision of 
                this section, any other Federal law, or the law of any 
                State (other than paragraph (10) of this subsection and 
                subsection (b)(9)(B)), 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 1 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), or to disaffirm or 
                repudiate any such contract in accordance with 
                subsection (d)(1).
                    ``(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 the status of such party 
                        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.--The conservator or receiver 
                shall notify any person that is a party to a contract 
                or transfer by 5:00 p.m. (Eastern Standard 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, 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) such transfer includes any qualified 
                        financial contract.
                    ``(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 under 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 
                                Standard 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 under 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 conservator or receiver 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 conservator or receiver 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, or the 
                exercise of rights or powers by, a conservator or 
                receiver, the conservator or receiver may enforce any 
                contract, other than a contract for liability insurance 
                for a director or officer, or a contract or a 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 liability insurance contract 
                for an officer or director, or regulated entity 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 subparagraph shall 
                        not--
                                    ``(I) apply to a contract for 
                                liability insurance for an officer or 
                                director;
                                    ``(II) apply to the rights of 
                                parties to certain qualified financial 
                                contracts under subsection (d)(8); and
                                    ``(III) 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 be not more 
        than the amount that such claimant would have received if the 
        Agency had liquidated the assets and liabilities of the 
        regulated entity without exercising the authority of the Agency 
        under subsection (i).
    ``(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 described in paragraph (2) brought by, on 
        behalf of, or at the request or direction of the Agency, and 
        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.
            ``(2) Actions addressed.--Paragraph (1) applies in any 
        civil action 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.
            ``(3) No limitation.--Nothing in this subsection 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.--The Agency, as receiver appointed 
                pursuant to subsection (a)--
                            ``(i) may, in the case of a Federal Home 
                        Loan Bank, organize a limited-life regulated 
                        entity with those powers and attributes of the 
                        Federal Home Loan Bank in default or in danger 
                        of default as the Director determines 
                        necessary, subject to the provisions of this 
                        subsection, and the Director shall grant a 
                        temporary charter to that limited-life 
                        regulated entity, and that limited-life 
                        regulated entity shall operate subject to that 
                        charter; and
                            ``(ii) shall, in the case of an enterprise, 
                        organize a limited-life regulated entity with 
                        respect to that enterprise in accordance with 
                        this subsection.
                    ``(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, except 
                        that the liabilities assumed shall not exceed 
                        the amount of assets purchased or transferred 
                        from the regulated entity to 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 and establishment.--
                    ``(A) Transfer of charter.--
                            ``(i) Fannie mae.--If the Agency is 
                        appointed as receiver for the Federal National 
                        Mortgage Association, the limited-life 
                        regulated entity established under this 
                        subsection with respect to such enterprise 
                        shall, by operation of law and immediately upon 
                        its organization--
                                    ``(I) succeed to the charter of the 
                                Federal National Mortgage Association, 
                                as set forth in the Federal National 
                                Mortgage Association Charter Act; and
                                    ``(II) thereafter operate in 
                                accordance with, and subject to, such 
                                charter, this Act, and any other 
                                provision of law to which the Federal 
                                National Mortgage Association is 
                                subject, except as otherwise provided 
                                in this subsection.
                            ``(ii) Freddie mac.--If the Agency is 
                        appointed as receiver for the Federal Home Loan 
                        Mortgage Corporation, the limited-life 
                        regulated entity established under this 
                        subsection with respect to such enterprise 
                        shall, by operation of law and immediately upon 
                        its organization--
                                    ``(I) succeed to the charter of the 
                                Federal Home Loan Mortgage Corporation, 
                                as set forth in the Federal Home Loan 
                                Mortgage Corporation Charter Act; and
                                    ``(II) thereafter operate in 
                                accordance with, and subject to, such 
                                charter, this Act, and any other 
                                provision of law to which the Federal 
                                Home Loan Mortgage Corporation is 
                                subject, except as otherwise provided 
                                in this subsection.
                    ``(B) Interests in and assets and obligations of 
                regulated entity in default.--Notwithstanding 
                subparagraph (A) or any other provision of law--
                            ``(i) a limited-life regulated entity shall 
                        assume, acquire, or succeed to the assets or 
                        liabilities of a regulated entity only to the 
                        extent that such assets or liabilities are 
                        transferred by the Agency to the limited-life 
                        regulated entity in accordance with, and 
                        subject to the restrictions set forth in, 
                        paragraph (1)(B);
                            ``(ii) a limited-life regulated entity 
                        shall not assume, acquire, or succeed to any 
                        obligation that a regulated entity for which a 
                        receiver has been appointed may have to any 
                        shareholder of the regulated entity that arises 
                        as a result of the status of that person as a 
                        shareholder of the regulated entity; and
                            ``(iii) no shareholder or creditor of a 
                        regulated entity shall have any right or claim 
                        against the charter of the regulated entity 
                        once the Agency has been appointed receiver for 
                        the regulated entity and a limited-life 
                        regulated entity succeeds to the charter 
                        pursuant to subparagraph (A).
                    ``(C) Limited-life regulated entity treated 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.
                    ``(D) Management.--Upon its establishment, a 
                limited-life regulated entity 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.
                    ``(E) 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.--
                            ``(A) No agency requirement.--The Agency is 
                        not required to pay capital stock into a 
                        limited-life regulated entity or to issue any 
                        capital stock on behalf of a limited-life 
                        regulated entity established under this 
                        subsection.
                            ``(B) Authority.--If the Director 
                        determines that such action is advisable, the 
                        Agency may cause capital stock or other 
                        securities of a limited-life regulated entity 
                        established with respect to an enterprise to be 
                        issued and offered for sale, in such amounts 
                        and on such terms and conditions as the 
                        Director may determine, in the discretion of 
                        the Director.
            ``(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 tax status.--Notwithstanding any other 
        provision of Federal or State law, a 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 subparagraphs (B) and 
                (C), not later than 2 years after the date of its 
                organization, the Agency shall wind up the affairs of a 
                limited-life regulated entity.
                    ``(B) Extension.--The Director may, in the 
                discretion of the Director, extend the status of a 
                limited-life regulated entity for 3 additional 1-year 
                periods.
                    ``(C) Termination of status as limited-life 
                regulated entity.--
                            ``(i) In general.--Upon the sale by the 
                        Agency of 80 percent or more of the capital 
                        stock of a limited-life regulated entity, as 
                        defined in clause (iv), to 1 or more persons 
                        (other than the Agency)--
                                    ``(I) the status of the limited-
                                life regulated entity as such shall 
                                terminate; and
                                    ``(II) the entity shall cease to be 
                                a limited-life regulated entity for 
                                purposes of this subsection.
                            ``(ii) Divestiture of remaining stock, if 
                        any.--
                                    ``(I) In general.--Not later than 1 
                                year after the date on which the status 
                                of a limited-life regulated entity is 
                                terminated pursuant to clause (i), the 
                                Agency shall sell to 1 or more persons 
                                (other than the Agency) any remaining 
                                capital stock of the former limited-
                                life regulated entity.
                                    ``(II) Extension authorized.--The 
                                Director may extend the period referred 
                                to in subclause (I) for not longer than 
                                an additional 2 years, if the Director 
                                determines that such action would be in 
                                the public interest.
                            ``(iii) Savings clause.--Notwithstanding 
                        any provision of law, other than clause (ii), 
                        the Agency shall not be required to sell the 
                        capital stock of an enterprise or a limited-
                        life regulated entity established with respect 
                        to an enterprise.
                            ``(iv) Applicability.--This subparagraph 
                        applies only with respect to a limited-life 
                        regulated entity that is established with 
                        respect to an enterprise.
            ``(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 and subject to the restrictions of 
                        paragraph (1).
                            ``(ii) Subsequent transfers.--At any time 
                        after the establishment of a limited-life 
                        regulated entity, the Agency, as receiver, may 
                        transfer any assets and liabilities of the 
                        regulated entity in default, or in danger of 
                        default, as the Agency may, in its discretion, 
                        determine to be appropriate in accordance with 
                        and subject to the restrictions of paragraph 
                        (1).
                            ``(iii) Effective without approval.--The 
                        transfer of any assets or liabilities of a 
                        regulated entity in default or in danger of 
                        default to a limited-life regulated entity 
                        shall be effective without any further approval 
                        under Federal or State law, assignment, or 
                        consent with respect thereto.
                            ``(iv) Equitable treatment of similarly 
                        situated creditors.--The Agency shall treat all 
                        creditors of a regulated entity in default or 
                        in danger of default that are similarly 
                        situated under subsection (c)(1) in a similar 
                        manner in exercising the authority of the 
                        Agency under this subsection to transfer any 
                        assets or liabilities of the regulated entity 
                        to the limited-life regulated entity 
                        established with respect to such regulated 
                        entity, except that the Agency may take actions 
                        (including making payments) that do not comply 
                        with this clause, if--
                                    ``(I) the Director determines that 
                                such actions are necessary to maximize 
                                the value of the assets of the 
                                regulated entity, to maximize the 
                                present value return from the sale or 
                                other disposition of the assets of the 
                                regulated entity, or to minimize the 
                                amount of any loss realized upon the 
                                sale or other disposition of the assets 
                                of the regulated entity; and
                                    ``(II) all creditors that are 
                                similarly situated under subsection 
                                (c)(1) receive not less than the amount 
                                provided in subsection (e)(2).
                            ``(v) Limitation on transfer of 
                        liabilities.--Notwithstanding any other 
                        provision of law, the aggregate amount of 
                        liabilities of a regulated entity that are 
                        transferred to, or assumed by, a limited-life 
                        regulated entity may not exceed the aggregate 
                        amount of assets of the regulated entity that 
                        are transferred to, or purchased by, the 
                        limited-life regulated entity.
            ``(8) Regulations.--The Agency may promulgate such 
        regulations as the Agency determines to be necessary or 
        appropriate to implement this subsection.
            ``(9) Powers of limited-life regulated entities.--
                    ``(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;
                                    ``(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; and
                                    ``(III) 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
                            ``(ii) 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 not longer than 45 days, at the request of 
                the limited-life regulated entity. Such period may be 
                modified upon the consent of all parties.
            ``(10) 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.
            ``(11) Authority to obtain credit.--
                    ``(A) In general.--A limited-life regulated entity 
                may obtain unsecured credit and issue unsecured debt.
                    ``(B) Inability to obtain credit.--If a limited-
                life regulated entity is unable to obtain unsecured 
                credit or issue unsecured debt, the Director may 
                authorize the obtaining of credit or the issuance of 
                debt by the limited-life regulated entity--
                            ``(i) with priority over any or all of the 
                        obligations of the limited-life regulated 
                        entity;
                            ``(ii) secured by a lien on property of the 
                        limited-life regulated entity that is not 
                        otherwise subject to a lien; or
                            ``(iii) secured by a junior lien on 
                        property of the limited-life regulated entity 
                        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 issuance of debt by 
                        a limited-life regulated entity that is secured 
                        by a senior or equal lien on property of the 
                        limited-life regulated entity that is subject 
                        to a lien (other than mortgages that 
                        collateralize the mortgage-backed securities 
                        issued or guaranteed by an enterprise) only 
                        if--
                                    ``(I) the limited-life regulated 
                                entity is unable to otherwise obtain 
                                such credit or issue such debt; and
                                    ``(II) there is adequate protection 
                                of the interest of the holder of the 
                                lien on the property with respect to 
                                which such senior or equal lien is 
                                proposed to be granted.
                    ``(D) Burden of proof.--In any hearing under this 
                subsection, the Director has the burden of proof on the 
                issue of adequate protection.
            ``(12) Affect on debts and liens.--The reversal or 
        modification on appeal of an authorization under this 
        subsection to obtain credit or issue debt, or of a grant under 
        this section of a priority or a lien, does not affect the 
        validity of any debt so issued, 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 issuance of such debt, or the 
        granting of such priority or lien, were stayed pending appeal.
    ``(j) Other Agency Exemptions.--
            ``(1) Applicability.--The provisions of this subsection 
        shall apply with respect to the Agency in any case in which the 
        Agency is acting as a conservator or a receiver.
            ``(2) Taxation.--The Agency, including its franchise, its 
        capital, reserves, and surplus, and its income, shall be exempt 
        from all taxation imposed by any State, county, 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.
            ``(3) Property protection.--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.
            ``(4) 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 the 
receiver appointed pursuant to this section revoke, annul, or terminate 
the charter of an enterprise.''.
    (b) Technical and Conforming Amendments.--The Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 
et seq.) is amended--
            (1) in section 1368 (12 U.S.C. 4618)--
                    (A) by striking ``an enterprise'' each place that 
                term appears and inserting ``a regulated entity''; and
                    (B) by striking ``the enterprise'' each place that 
                term appears and inserting ``the regulated entity'';
            (2) in section 1369C (12 U.S.C. 4622), by striking 
        ``enterprise'' each place that term appears and inserting 
        ``regulated entity'';
            (3) in section 1369D (12 U.S.C. 4623)--
                    (A) by striking ``an enterprise'' each place that 
                term appears and inserting ``a regulated entity''; and
                    (B) in subsection (a)(1), by striking ``An 
                enterprise'' and inserting ``A regulated entity''; and
            (4) by striking sections 1369, 1369A, and 1369B (12 U.S.C. 
        4619, 4620, and 4621).

                    Subtitle D--Enforcement Actions

SEC. 1151. CEASE AND DESIST PROCEEDINGS.

    Section 1371 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4631) is amended--
            (1) by striking subsections (a) and (b) and inserting the 
        following:
    ``(a) Issuance for Unsafe or Unsound Practices and Violations.--
            ``(1) Authority of director.--If, in the opinion of the 
        Director, a regulated entity or any entity-affiliated party is 
        engaging or has engaged, or the Director has reasonable cause 
        to believe that the regulated entity or any entity-affiliated 
        party is about to engage, in an unsafe or unsound practice in 
        conducting the business of the regulated entity or the Office 
        of Finance, or is violating or has violated, or the Director 
        has reasonable cause to believe is about to violate, a law, 
        rule, regulation, or order, 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 the 
        Office of Finance or any written agreement entered into with 
        the Director, the Director may issue and serve upon the 
        regulated entity or entity-affiliated party a notice of charges 
        in respect thereof.
            ``(2) Limitation.--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 subsection (a).'';
            (2) in subsection (c)--
                    (A) in paragraph (1), by inserting before the 
                period at the end the following: ``, unless the party 
                served with a notice of charges shall appear at the 
                hearing personally or by a duly authorized 
                representative, the party shall be deemed to have 
                consented to the issuance of the cease and desist 
                order''; and
                    (B) in paragraph (2)--
                            (i) by striking ``or director'' and 
                        inserting ``director, or entity-affiliated 
                        party''; and
                            (ii) by inserting ``or entity-affiliated 
                        party'' before ``consents'';
            (3) in each of subsections (c), (d), and (e)--
                    (A) by striking ``the enterprise'' each place that 
                term appears and inserting ``the regulated entity'';
                    (B) by striking ``an enterprise'' each place that 
                term appears and inserting ``a regulated entity''; and
                    (C) by striking ``conduct'' each place that term 
                appears and inserting ``practice'';
            (4) in subsection (d)--
                    (A) in the matter preceding paragraph (1)--
                            (i) by striking ``or director'' and 
                        inserting ``director, or entity-affiliated 
                        party''; and
                            (ii) by inserting ``to require a regulated 
                        entity or entity-affiliated party'' after 
                        ``includes the authority'';
                    (B) in paragraph (1)--
                            (i) by striking ``to require an executive 
                        officer or a director to''; and
                            (ii) by striking ``loss'' and all that 
                        follows through ``person'' and inserting 
                        ``loss, if'';
                            (iii) in subparagraph (A), by inserting 
                        ``such entity or party or finance facility'' 
                        before ``was''; and
                            (iv) by striking subparagraph (B) and 
                        inserting the following:
                    ``(B) the violation or practice involved a reckless 
                disregard for the law or any applicable regulations or 
                prior order of the Director;''; and
                    (C) in paragraph (4), by inserting ``loan or'' 
                before ``asset'';
            (5) in subsection (e), by inserting ``or entity-affiliated 
        party''--
                    (A) before ``or any executive''; and
                    (B) before the period at the end; and
            (6) in subsection (f)--
                    (A) by striking ``enterprise'' and inserting 
                ``regulated entity, finance facility,''; and
                    (B) by striking ``or director'' and inserting 
                ``director, or entity-affiliated party''.

SEC. 1152. TEMPORARY CEASE AND DESIST PROCEEDINGS.

    Section 1372 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4632) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Grounds for Issuance.--
            ``(1) In general.--If the Director determines that the 
        actions specified in the notice of charges served upon a 
        regulated entity or any 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 that entity, or is likely to weaken the condition 
        of that entity prior to the completion of the proceedings 
        conducted pursuant to sections 1371 and 1373, the Director 
        may--
                    ``(A) issue a temporary order requiring that 
                regulated entity or entity-affiliated party to cease 
                and desist from any such violation or practice; and
                    ``(B) require that regulated entity or entity-
                affiliated party to take affirmative action to prevent 
                or remedy such insolvency, dissipation, condition, or 
                prejudice pending completion of such proceedings.
            ``(2) Additional requirements.--An order issued under 
        paragraph (1) may include any requirement authorized under 
        subsection 1371(d).'';
            (2) in subsection (b)--
                    (A) by striking ``or director'' and inserting 
                ``director, or entity-affiliated party''; and
                    (B) by striking ``enterprise'' each place that term 
                appears and inserting ``regulated entity'';
            (3) in subsection (c), by striking ``enterprise'' each 
        place that term appears and inserting ``regulated entity'';
            (4) in subsection (d)--
                    (A) by striking ``or director'' each place that 
                term appears and inserting ``director, or entity-
                affiliated party''; and
                    (B) by striking ``An enterprise'' and inserting ``A 
                regulated entity''; and
            (5) in subsection (e)--
                    (A) by striking ``request the Attorney General of 
                the United States to''; and
                    (B) by striking ``or may, under the direction and 
                control of the Attorney General, bring such action''.

SEC. 1153. REMOVAL AND PROHIBITION AUTHORITY.

    (a) In General.--Part 1 of subtitle C of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 
et seq.) is amended--
            (1) by redesignating sections 1377 through 1379B (12 U.S.C. 
        4637-4641) as sections 1379 through 1379D, respectively; and
            (2) by inserting after section 1376 (12 U.S.C. 4636) the 
        following:

``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

    ``(a) Authority To Issue Order.--
            ``(1) In general.--The Director may serve upon a party 
        described in paragraph (2), or any officer, director, or 
        management of the Office of Finance a written notice of the 
        intention of the Director to suspend or remove such party from 
        office, or prohibit any further participation by such party, in 
        any manner, in the conduct of the affairs of the regulated 
        entity.
            ``(2) Applicability.--A party described in this paragraph 
        is an entity-affiliated party or any officer, director, or 
        management of the Office of Finance, if the Director determines 
        that--
                    ``(A) that party, officer, or director has, 
                directly or indirectly--
                            ``(i) 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;
                            ``(ii) engaged or participated in any 
                        unsafe or unsound practice in connection with 
                        any regulated entity or business institution; 
                        or
                            ``(iii) committed or engaged in any act, 
                        omission, or practice which constitutes a 
                        breach of such party's fiduciary duty;
                    ``(B) by reason of the violation, practice, or 
                breach described in subparagraph (A)--
                            ``(i) such regulated entity or business 
                        institution has suffered or will probably 
                        suffer financial loss or other damage; or
                            ``(ii) such party has received financial 
                        gain or other benefit; and
                    ``(C) the violation, practice, or breach described 
                in subparagraph (A)--
                            ``(i) involves personal dishonesty on the 
                        part of such party; or
                            ``(ii) demonstrates willful or continuing 
                        disregard by such party for the safety or 
                        soundness of such regulated entity or business 
                        institution.
    ``(b) Suspension Order.--
            ``(1) Suspension or prohibition authority.--If the Director 
        serves written notice under subsection (a) upon a party subject 
        to that subsection (a), the Director may, by order, suspend or 
        remove 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--
                    ``(A) determines that such action is necessary for 
                the protection of the regulated entity; and
                    ``(B) serves such party with written notice of the 
                order.
            ``(2) Effective period.--Any 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), shall remain in effect and 
                enforceable until--
                            ``(i) the date on which 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 under subsection (b).
            ``(3) Copy of order.--If the Director issues an order under 
        subsection (b) to any 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.--
            ``(1) Notice.--A notice under subsection (a) of the 
        intention of the Director to issue an order under this section 
        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.
            ``(2) Timing of hearing.--A hearing shall be fixed for a 
        date not earlier than 30 days, nor later than 60 days, after 
        the date of service of notice under subsection (a), unless an 
        earlier or a later date is set by the Director at the request 
        of--
                    ``(A) the party receiving such notice, and good 
                cause is shown; or
                    ``(B) the Attorney General of the United States.
            ``(3) Consent.--Unless the party that is the subject of a 
        notice delivered under subsection (a) appears 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 under 
        this section.
            ``(4) Issuance of order of suspension.--The Director may 
        issue an order under this section, as the Director may deem 
        appropriate, if--
                    ``(A) a party is deemed to have consented to the 
                issuance of an order under paragraph (3); or
                    ``(B) upon the record made at the hearing, the 
                Director finds that any of the grounds specified in the 
                notice have been established.
            ``(5) Effectiveness of order.--Any order issued under 
        paragraph (4) shall become effective at the expiration of 30 
        days after the date of service upon the relevant regulated 
        entity and party (except in the case of an order issued upon 
        consent under paragraph (3), 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 or the Office of Finance;
            ``(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 an entity-
        affiliated party of a regulated entity or as an officer or 
        director of the Office of Finance.
    ``(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 
        the Office of Finance, or prohibited from participating in the 
        conduct of the affairs of a regulated entity or the Office of 
        Finance, 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 or the 
        Office of Finance.
            ``(2) Exception if director provides written consent.--If, 
        on or after the date on which an order is issued under this 
        section which removes or suspends from office any party, or 
        prohibits such party from participating in the conduct of the 
        affairs of a regulated entity or the Office of Finance, 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 or such Office of 
        Finance described in the written consent. Any such consent 
        shall be publicly disclosed.
            ``(3) Violation of paragraph (1) treated as violation of 
        order.--Any violation of paragraph (1) by any person who is 
        subject to an order issued under subsection (h) 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 entity.
    ``(g) Stay of Suspension and Prohibition of Entity-Affiliated 
Party.--Not later than 10 days after the date on which any entity-
affiliated party has been suspended from office 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 or prohibition pending the 
completion of the administrative proceedings pursuant to subsection 
(c). The court shall have jurisdiction to stay such suspension or 
prohibition.
    ``(h) Suspension or Removal of Entity-Affiliated Party Charged With 
Felony.--
            ``(1) Suspension or prohibition.--
                    ``(A) In general.--Whenever any 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 1 year 
                under Federal or State 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, 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.
                    ``(B) Provisions applicable to notice.--
                            ``(i) Copy.--A copy of any notice under 
                        subparagraph (A) shall be served upon the 
                        relevant 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 subparagraph (A) 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 an 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 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 without the prior 
                written consent of the Director.
                    ``(B) Provisions applicable to order.--
                            ``(i) Copy.--A copy of any order under 
                        subparagraph (A) shall be served upon the 
                        relevant regulated entity, at which time the 
                        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 a party from office or to 
                        prohibit further participation in the affairs 
                        of a regulated entity pursuant to subsection 
                        (a) or (b).
                            ``(iii) Effective period.--Unless 
                        terminated by the Director, 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).
            ``(3) Authority of remaining board members.--
                    ``(A) In general.--If at any time, because of the 
                suspension of 1 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.
                    ``(B) Appointment of temporary directors.--If all 
                of the directors of a regulated entity are suspended 
                pursuant to this section, the Director shall appoint 
                persons to serve temporarily as directors 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.--
                    ``(A) In general.--Not later than 30 days after the 
                date of service of any notice of suspension or order of 
                removal issued pursuant to paragraph (1) or (2), the 
                entity-affiliated party may request in writing an 
                opportunity to appear before the Director to show that 
                the continued service 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.
                    ``(B) Timing and form of hearing.--Upon receipt of 
                a request for a hearing under subparagraph (A), the 
                Director shall fix a time (not later than 30 days after 
                the date of receipt of such request, unless extended at 
                the request of such party) and place at which the 
                entity-affiliated party may appear, personally or 
                through counsel, before the Director or 1 or more 
                designated employees of the Director to submit written 
                materials (or, at the discretion of the Director, oral 
                testimony) and oral argument.
                    ``(C) Determination.--Not later than 60 days after 
                the date of a hearing under subparagraph (B), the 
                Director shall notify the entity-affiliated 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 will be 
                rescinded or otherwise modified. Such notification 
                shall contain a statement of the basis for any adverse 
                decision of the Director.
            ``(5) Rules.--The Director is authorized to prescribe such 
        rules as may be necessary to carry out this subsection.''.
    (b) Conforming Amendments.--
            (1) Safety and soundness act.--Subtitle C of the Federal 
        Housing Enterprises Financial Safety and Soundness Act of 1992 
        (12 U.S.C. 4501 et seq.) is amended--
                    (A) in section 1317(f), by striking ``section 
                1379B'' and inserting ``section 1379D'';
                    (B) in section 1373(a)--
                            (i) in paragraph (1), by striking ``or 
                        1376(c)'' and inserting ``, 1376(c), or 1377'';
                            (ii) in paragraph (2), by inserting ``or 
                        1377'' after'' 1371''; and
                            (iii) in paragraph (4), by inserting ``or 
                        removal or prohibition'' after ``cease and 
                        desist''; and
                    (C) in section 1374(a)--
                            (i) by striking ``or 1376'' and inserting 
                        ``1313B, 1376, or 1377''; and
                            (ii) by striking ``such section'' and 
                        inserting ``this title''.
            (2) Fannie mae charter act.--Section 308(b) of the Federal 
        National Mortgage Association Charter Act (12 U.S.C. 1723(b)) 
        is amended in the second sentence, by striking ``The'' and 
        inserting ``Except to the extent that action under section 1377 
        of the Federal Housing Enterprises Financial Safety and 
        Soundness Act of 1992 temporarily results in a lesser number, 
        the''.
            (3) Freddie mac charter act.--Section 303(a)(2)(A) of the 
        Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
        1452(a)(2)(A)) is amended, in the second sentence, by striking 
        ``The'' and inserting ``Except to the extent action under 
        section 1377 of the Federal Housing Enterprises Financial 
        Safety and Soundness Act of 1992 temporarily results in a 
        lesser number, the''.

SEC. 1154. ENFORCEMENT AND JURISDICTION.

    Section 1375 of the Federal Housing Enterprises Financial Safety 
and Soundness 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 ``1313B, 1376, or 1377''.

SEC. 1155. CIVIL MONEY PENALTIES.

    Section 1376 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4636) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) In General.--The Director may impose a civil money penalty in 
accordance with this section on any regulated entity or any entity-
affiliated party. The Director shall not impose a civil penalty in 
accordance with this section on any regulated entity or any entity-
affiliated party for any violation that is addressed under section 
1345(a).'';
            (2) by striking subsection (b) and inserting the following:
    ``(b) Amount of Penalty.--
            ``(1) First tier.--A regulated entity or entity-affiliated 
        party shall forfeit and pay a civil penalty of not more than 
        $10,000 for each day during which a violation continues, if 
        such regulated entity or party--
                    ``(A) violates any provision of this title, the 
                authorizing statutes, or any order, condition, rule, or 
                regulation under this title or any authorizing statute;
                    ``(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.
            ``(2) Second tier.--Notwithstanding paragraph (1), a 
        regulated entity or entity-affiliated party shall forfeit and 
        pay a civil penalty of not more than $50,000 for each day 
        during which a violation, practice, or breach continues, if--
                    ``(A) the regulated entity or entity-affiliated 
                party, respectively--
                            ``(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 
                        the 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 the regulated entity; or
                            ``(iii) results in pecuniary gain or other 
                        benefit to such party.
            ``(3) Third tier.--Notwithstanding paragraphs (1) and (2), 
        any regulated entity or entity-affiliated party 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, if such regulated entity or entity-affiliated 
        party--
                    ``(A) knowingly--
                            ``(i) commits any violation described in 
                        any subparagraph of paragraph (1);
                            ``(ii) engages in any unsafe or unsound 
                        practice in conducting the affairs of the 
                        regulated entity; or
                            ``(iii) breaches any fiduciary duty; and
                    ``(B) knowingly or recklessly causes a substantial 
                loss to the regulated entity or a substantial pecuniary 
                gain or other benefit to such party by reason of such 
                violation, practice, or breach.
            ``(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 paragraph 
        (3) is--
                    ``(A) in the case of any entity-affiliated party, 
                an amount not to exceed $2,000,000; and
                    ``(B) in the case of any regulated entity, 
                $2,000,000.'';
            (3) in subsection (c)--
                    (A) by striking ``enterprise'' each place that term 
                appears and inserting ``regulated entity'';
                    (B) by inserting ``or entity-affiliated party'' 
                before ``in writing''; and
                    (C) by inserting ``or entity-affiliated party'' 
                before ``has been given'';
            (4) in subsection (d)--
                    (A) by striking ``or director'' each place such 
                term appears and inserting ``director, or entity-
                affiliated party'';
                    (B) by striking ``an enterprise'' and inserting ``a 
                regulated entity'';
                    (C) by striking ``the enterprise'' and inserting 
                ``the regulated entity'';
                    (D) by striking ``request the Attorney General of 
                the United States to'';
                    (E) by inserting ``, or the United States district 
                court within the jurisdiction of which the headquarters 
                of the regulated entity is located,'' after ``District 
                of Columbia'';
                    (F) by striking ``, or may, under the direction and 
                control of the Attorney General of the United States, 
                bring such an action''; and
                    (G) by striking ``and section 1374''; and
            (5) in subsection (g), by striking ``An enterprise'' and 
        inserting ``A regulated entity''.

SEC. 1156. CRIMINAL PENALTY.

    (a) In General.--Subtitle C of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 et seq.) is 
amended by inserting after section 1377, as added by this Act, the 
following:

``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, 
notwithstanding section 3571 of title 18, be fined not more than 
$1,000,000, imprisoned for not more than 5 years, or both.''.
    (b) Technical and Conforming Amendments.--The Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 
et seq.) is amended--
            (1) in section 1379 (as so designated by this Act)--
                    (A) by striking ``an enterprise'' and inserting ``a 
                regulated entity''; and
                    (B) by striking ``the enterprise'' and inserting 
                ``the regulated entity'';
            (2) in section 1379A (as so designated by this Act), by 
        striking ``an enterprise'' and inserting ``a regulated 
        entity'';
            (3) in section 1379B(c) (as so designated by this Act), by 
        striking ``enterprise'' and inserting ``regulated entity''; and
            (4) in section 1379D (as so designated by this Act), by 
        striking ``enterprise'' and inserting ``regulated entity''.

SEC. 1157. NOTICE AFTER SEPARATION FROM SERVICE.

    Section 1379 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4637), as so designated by this 
Act, is amended--
            (1) by striking ``2-year'' and inserting ``6-year'';
            (2) by striking ``a director or executive officer of an 
        enterprise'' and inserting ``an entity-affiliated party'';
            (3) by striking ``director or officer'' each place that 
        term appears and inserting ``entity-affiliated party''; and
            (4) by striking ``enterprise.'' and inserting ``regulated 
        entity.''.

SEC. 1158. SUBPOENA AUTHORITY.

    (a) In General.--Section 1379B of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4641) is 
amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1)--
                            (i) by striking ``administrative'';
                            (ii) by inserting ``, examination, or 
                        investigation'' after ``proceeding'';
                            (iii) by striking ``subtitle'' and 
                        inserting ``title''; and
                            (iv) by inserting ``or any designated 
                        representative thereof, including any person 
                        designated to conduct any hearing under this 
                        subtitle'' after ``Director''; and
                    (B) in paragraph (4), by striking ``issued by the 
                Director'';
            (2) in subsection (b), by inserting ``or in any territory 
        or other place subject to the jurisdiction of the United 
        States'' after ``State'';
            (3) by striking subsection (c) and inserting the following:
    ``(c) Enforcement.--
            ``(1) In general.--The Director, or any party to 
        proceedings under this subtitle, may apply to the United States 
        District Court for the District of Columbia, or the United 
        States district court for the judicial district of the United 
        States in any territory in which such proceeding is being 
        conducted, or where the witness resides or carries on business, 
        for enforcement of any subpoena or subpoena duces tecum issued 
        pursuant to this section.
            ``(2) Power of court.--The courts described under paragraph 
        (1) shall have the jurisdiction and power to order and require 
        compliance with any subpoena issued under paragraph (1).'';
            (4) in subsection (d), by inserting ``enterprise-affiliated 
        party'' before ``may allow''; and
            (5) by adding at the end the following:
    ``(e) Penalties.--A person shall be guilty of a misdemeanor, and 
upon conviction, shall be subject to a fine of not more than $1,000 or 
to imprisonment for a term of not more than 1 year, or both, if that 
person willfully fails or refuses, in disobedience of a subpoena issued 
under subsection (c), to--
            ``(1) attend court;
            ``(2) testify in court;
            ``(3) answer any lawful inquiry; or
            ``(4) produce books, papers, correspondence, contracts, 
        agreements, or such other records as requested in the 
        subpoena.''.

                     Subtitle E--General Provisions

SEC. 1161. CONFORMING AND TECHNICAL AMENDMENTS.

    (a) Amendments to 1992 Act.--The Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.), as 
amended by this Act, is amended--
            (1) in section 1315 (12 U.S.C. 4515)--
                    (A) in subsection (a)--
                            (i) by striking ``(a) Office Personnel.--
                        The'' and inserting ``(a) In General.--Subject 
                        to title III of the Federal Housing Finance 
                        Regulatory Reform Act of 2008, the''; and
                            (ii) by striking ``the Office'' each place 
                        that term appears and inserting ``the Agency'';
                    (B) in subsection (c), by striking ``the Office'' 
                and inserting ``the Agency'';
                    (C) in subsection (e), by striking ``the Office'' 
                and inserting ``the Agency'';
                    (D) by striking subsection (d) and redesignating 
                subsection (e) as subsection (d); and
                    (E) by striking subsection (f);
            (2) in section 1319A (12 U.S.C. 4520)--
                    (A) by striking ``(a) In General.--''; and
                    (B) by striking subsection (b);
            (3) in section 1364(c) (12 U.S.C. 4614(c)), by striking the 
        last sentence;
            (4) by striking section 1383 (12 U.S.C. 1451 note);
            (5) in each of sections 1319D, 1319E, and 1319F (12 U.S.C. 
        4523, 4524, 4525) by striking ``the Office'' each place that 
        term appears and inserting ``the Agency''; and
            (6) in each of sections 1319B and 1369(a)(3) (12 U.S.C. 
        4521, 4619(a)(3)), by striking ``Committee on Banking, Finance 
        and Urban Affairs'' each place such term appears and inserting 
        ``Committee on Financial Services''.
    (b) Amendments to Fannie Mae Charter Act.--The Federal National 
Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) is amended--
            (1) in each of sections 303(c)(2) (12 U.S.C. 1718(c)(2)), 
        309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)), and 309(k)(1) (12 
        U.S.C. 1723a(k)(1)), by striking ``Director of the Office of 
        Federal Housing Enterprise Oversight of the Department of 
        Housing and Urban Development'' each place that term appears, 
        and inserting ``Director of the Federal Housing Finance 
        Agency''; and
            (2) in section 309--
                    (A) in subsection (m) (12 U.S.C. 1723a(m))--
                            (i) in paragraph (1), by striking ``to the 
                        Secretary, in a form determined by the 
                        Secretary'' and inserting ``to the Director of 
                        the Federal Housing Finance Agency, in a form 
                        determined by the Director''; and
                            (ii) in paragraph (2), by striking ``to the 
                        Secretary, in a form determined by the 
                        Secretary'' and inserting ``to the Director of 
                        the Federal Housing Finance Agency, in a form 
                        determined by the Director'';
                    (B) in subsection (n) (12 U.S.C. 1723a(n))--
                            (i) in paragraph (1), by striking ``and the 
                        Secretary'' and inserting ``and the Director of 
                        the Federal Housing Finance Agency''; and
                            (ii) in paragraph (2), by striking 
                        ``Secretary'' each place that term appears and 
                        inserting ``Director of the Federal Housing 
                        Finance Agency''; and
                    (C) in paragraph (3)(B), by striking ``Secretary'' 
                and inserting ``Director of the Federal Housing Finance 
                Agency''.
    (c) Amendments to Freddie Mac Charter Act.--The Federal Home Loan 
Mortgage Corporation Act (12 U.S.C. 1451 et seq.) is amended--
            (1) in each of sections 303(b)(2) (12 U.S.C. 1452(b)(2)), 
        303(h)(2) (12 U.S.C. 1452(h)(2)), and section 307(c)(1) (12 
        U.S.C. 1456(c)(1)), by striking ``Director of the Office of 
        Federal Housing Enterprise Oversight of the Department of 
        Housing and Urban Development'' each place that term appears, 
        and inserting ``Director of the Federal Housing Finance 
        Agency'';
            (2) in section 306 (12 U.S.C. 1455)--
                    (A) in subsection (c)(2), by inserting ``the'' 
                after ``Secretary of'';
                    (B) in subsection (i)--
                            (i) by striking ``section 1316(c)'' and 
                        inserting ``section 306(c)''; and
                            (ii) by striking ``section 106'' and 
                        inserting ``section 1316''; and
                    (C) in subsection (j)(2), by striking ``of 
                substantially'' and inserting ``or substantially''; and
            (3) in section 307 (12 U.S.C. 1456)--
                    (A) in subsection (e)--
                            (i) in paragraph (1), by striking ``to the 
                        Secretary, in a form determined by the 
                        Secretary'' and inserting ``to the Director of 
                        the Federal Housing Finance Agency, in a form 
                        determined by the Director''; and
                            (ii) in paragraph (2), by striking ``to the 
                        Secretary, in a form determined by the 
                        Secretary'' and inserting ``to the Director of 
                        the Federal Housing Finance Agency, in a form 
                        determined by the Director''; and
                    (B) in subsection (f)--
                            (i) in paragraph (1), by striking ``and the 
                        Secretary'' and inserting ``and the Director of 
                        the Federal Housing Finance Agency'';
                            (ii) in paragraph (2), by striking ``the 
                        Secretary'' each place that term appears and 
                        inserting ``the Director of the Federal Housing 
                        Finance Agency''; and
                            (iii) in paragraph (3)(B), by striking 
                        ``Secretary'' and inserting ``Director of the 
                        Federal Housing Finance Agency''.
    (d) Amendment to 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''.
    (e) Amendments to 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''.
    (f) Amendment to 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).
    (g) Amendments to Title 5, United States Code.--Title 5, United 
States Code, is amended--
            (1) in section 5313, 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.''; and
            (2) in section 3132(a)(1)--
                    (A) in subparagraph (B), by striking ``,, and'' and 
                inserting ``, and'';
                    (B) in subparagraph (D)--
                            (i) by striking ``the Federal Housing 
                        Finance Board'';
                            (ii) by striking ``the Office of Federal 
                        Housing Enterprise Oversight of the Department 
                        of Housing and Urban Development'' and 
                        inserting ``the Federal Housing Finance 
                        Agency''; and
                            (iii) by striking ``or or'' at the end;
                    (C) in subparagraph (E), as added by section 
                8(d)(1)(B)(iii) of Public Law 107-123, by adding ``or'' 
                at the end; and
                    (D) by redesignating subparagraph (E), as added by 
                section 10702(c)(1)(C) of Public Law 107-171, as 
                subparagraph (F).
    (h) Amendment to Sarbanes-Oxley Act.--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,''.
    (i) Amendment to 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:
                            ``(vii) Federal Housing Finance Agency.''.

SEC. 1162. PRESIDENTIALLY-APPOINTED DIRECTORS 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 1163 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 1163 
        occurs.

SEC. 1163. EFFECTIVE DATE.

    Except as otherwise specifically provided in this title, this title 
and the amendments made by this title shall take effect on, and shall 
apply beginning on, the date of enactment of this Act.

                   TITLE II--FEDERAL HOME LOAN BANKS

SEC. 1201. RECOGNITION OF DISTINCTIONS BETWEEN THE ENTERPRISES AND THE 
              FEDERAL HOME LOAN BANKS.

    Section 1313 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4513) is amended by adding at the 
end the following:
    ``(f) Recognition of Distinctions Between the Enterprises and the 
Federal Home Loan Banks.--Prior to promulgating any regulation or 
taking any other formal or informal agency action of general 
applicability relating to the Federal Home Loan Banks, including the 
issuance of an advisory document or examination guidance, the Director 
shall consider the differences between the Federal Home Loan Banks and 
the enterprises with respect to--
            ``(1) the Banks'--
                    ``(A) cooperative ownership structure;
                    ``(B) the mission of providing liquidity to 
                members;
                    ``(C) affordable housing and community development 
                mission;
                    ``(D) capital structure; and
                    ``(E) joint and several liability; and
            ``(2) any other differences that the Director considers 
        appropriate.''.

SEC. 1202. DIRECTORS.

    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.--Subject to paragraphs (2) through (4), 
        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.
            ``(2) Board makeup.--The board of directors of each Bank 
        shall be comprised of--
                    ``(A) member directors, who shall comprise at least 
                the majority of the members of the board of directors; 
                and
                    ``(B) independent directors, who shall comprise not 
                fewer than \2/5\ of the members of the board of 
                directors.
            ``(3) Selection criteria.--
                    ``(A) In general.--Each member of the board of 
                directors shall be--
                            ``(i) elected by plurality vote of the 
                        members, in accordance with procedures 
                        established under this section; and
                            ``(ii) a citizen of the United States.
                    ``(B) Independent director criteria.--
                            ``(i) In general.--Each independent 
                        director that is not a public interest director 
                        under clause (ii) 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) Public interest.--Not fewer than 2 
                        of the independent directors shall have more 
                        than 4 years of experience in representing 
                        consumer or community interests on banking 
                        services, credit needs, housing, or financial 
                        consumer protections.
                            ``(iii) Conflicts of interest.--No 
                        independent director may, during the term of 
                        service on the board of directors, serve as an 
                        officer of any Federal Home Loan Bank or as a 
                        director, officer, or employee of any member of 
                        a Bank, or of any person that receives advances 
                        from a Bank.
            ``(4) Definitions.--For purposes of this section, the 
        following definitions shall apply:
                    ``(A) Independent director.--The terms `independent 
                director' and `independent directorship' mean a member 
                of the board of directors of a Federal Home Loan Bank 
                who is a bona fide resident of the district in which 
                the Federal Home Loan Bank is located, or the 
                directorship held by such a person, respectively.
                    ``(B) Member director.--The terms `member director' 
                and `member directorship' mean a member of the board of 
                directors of a Federal Home Loan Bank who is an officer 
                or director of a member institution that is located in 
                the district in which the Federal Home Loan Bank is 
                located, or the directorship held by such a person, 
                respectively.'';
            (2) by striking ``elective'' each place that term appears, 
        other than in subsections (d), (e), and (f), and inserting 
        ``member'';
            (3) in subsection (b)--
                    (A) by striking the subsection heading and all that 
                follows through ``Each elective directorship'' and 
                inserting the following:
    ``(b) Directorships.--
            ``(1) Member directorships.--Each member directorship''; 
        and
                    (B) by adding at the end the following:
            ``(2) Independent directorships.--
                    ``(A) Elections.--Each independent director--
                            ``(i) shall be elected by the members 
                        entitled to vote, from among eligible persons 
                        nominated, after consultation with the Advisory 
                        Council of the Bank, by the board of directors 
                        of the Bank; and
                            ``(ii) shall be elected by a plurality of 
                        the votes of the members of the Bank at large, 
                        with each member having the number of votes for 
                        each such directorship as it has under 
                        paragraph (1) in an election to fill member 
                        directorships.
                    ``(B) Criteria.--Nominees shall meet all applicable 
                requirements prescribed in this section.
                    ``(C) Nomination and election procedures.--
                Procedures for nomination and election of independent 
                directors shall be prescribed by the bylaws of each 
                Federal Home Loan Bank, in a manner consistent with the 
                rules and regulations of the Agency.'';
            (4) in subsection (c)--
                    (A) by striking ``elective'' each place that term 
                appears and inserting ``member'', except--
                            (i) in the second sentence, the second 
                        place that term appears; and
                            (ii) each place that term appears in the 
                        fifth sentence; and
                    (B) 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 2 or more such 
                        Banks'';
            (5) in subsection (d)--
                    (A) in the first sentence--
                            (i) by striking ``, whether elected or 
                        appointed,''; and
                            (ii) by striking ``3 years'' and inserting 
                        ``4 years'';
                    (B) in the second sentence--
                            (i) by striking ``Federal Home Loan Bank 
                        System Modernization Act of 1999'' and 
                        inserting ``Federal Housing Finance Regulatory 
                        Reform Act of 2008'';
                            (ii) by striking ``\1/3\'' and inserting 
                        ``\1/4\''; and
                            (iii) by striking ``or appointed''; and
                    (C) in the third sentence--
                            (i) by striking ``an elective'' each place 
                        that term appears and inserting ``a''; and
                            (ii) by striking ``in any elective 
                        directorship or elective directorships'';
            (6) in subsection (f)--
                    (A) by striking paragraph (2);
                    (B) by striking ``appointed or'' each place that 
                term appears; and
                    (C) in paragraph (3)--
                            (i) by striking ``(3) Elected bank 
                        directors.--'' and inserting ``(2) Election 
                        process.--''; and
                            (ii) by striking ``elective'' each place 
                        that term appears;
            (7) in subsection (i)--
                    (A) in paragraph (1), by striking ``Subject to 
                paragraph (2), each'' and inserting ``Each''; and
                    (B) by striking paragraph (2) and inserting the 
                following:
            ``(2) Annual report.--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.''; and
            (8) by adding at the end the following:
    ``(l) Transition Rule.--Any member of the board of directors of a 
Bank elected or appointed in accordance with this section prior to the 
date of enactment of this subsection may continue to serve as a member 
of that board of directors for the remainder of the existing term of 
service.''.

SEC. 1203. 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, established under section 1311 of the Federal 
        Housing Enterprises Financial Safety and Soundness Act of 
        1992.''.

SEC. 1204. 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 Act, is 
amended--
            (1) by striking sections 2A and 2B (12 U.S.C. 1422a, 
        1422b);
            (2) by striking section 18 (12 U.S.C. 1438) and inserting 
        the following:

``SEC. 18. ADMINISTRATIVE PROVISIONS.

    ``(a) Acquisition Authority.--The Director of the Office of Thrift 
Supervision, utilizing the services of the Administrator of General 
Services (hereinafter referred to as the `Administrator'), and subject 
to any limitation hereon which may hereafter be imposed in 
appropriation Acts, is hereby authorized--
            ``(1) to acquire, in the name of the United States, real 
        property in the District of Columbia, for the purposes set 
        forth in this section;
            ``(2) to construct, develop, furnish, and equip such 
        buildings thereon and such facilities as in its judgment may be 
        appropriate to provide, to such extent as the Director of the 
        Office of Thrift Supervision may deem advisable, suitable and 
        adequate quarters and facilities for the Director of the Office 
        of Thrift Supervision and the agencies under its administration 
        or supervision;
            ``(3) to enlarge, remodel, or reconstruct any of the same; 
        and
            ``(4) to make or enter into contracts for any of the 
        foregoing.
    ``(b) Advances.--The Director of the Office of Thrift Supervision 
may require of the respective banks, and they shall make to the 
Director of the Office of Thrift Supervision, such advances of funds 
for the purposes set out in subsection (a) as in the sole judgment of 
the Director of the Office of Thrift Supervision may from time to time 
be advisable. Such advances shall be apportioned by the Director of the 
Office of Thrift Supervision among the banks in proportion to the total 
assets of the respective banks, determined in such manner and as of 
such times as the Director of the Office of Thrift Supervision may 
prescribe. Each such advance shall bear interest at the rate of 4\1/2\ 
per centum per annum from the date of the advance and shall be repaid 
by the Director of the Office of Thrift Supervision in such 
installments and over such period, not longer than twenty-five years 
from the making of the advance, as the Director of the Office of Thrift 
Supervision may determine. Payments of interest and principal upon such 
advances shall be made from receipts of the Director of the Office of 
Thrift Supervision or from other sources which may from time to time be 
available to the Director of the Office of Thrift Supervision. The 
obligation of the Director of the Office of Thrift Supervision to make 
any such payment shall not be regarded as an obligation of the United 
States. To such extent as the Director of the Office of Thrift 
Supervision may prescribe any such obligation shall be regarded as a 
legal investment for the purposes of subsections (g) and (h) of section 
11 and for the purposes of section 16.
    ``(c) Plans and Designs.--The plans and designs for such buildings 
and facilities and for any such enlargement, remodeling, or 
reconstruction shall, to such extent as the chairperson of the Director 
of the Office of Thrift Supervision may request, be subject to the 
approval of the Director.
    ``(d) Custody, Management and Control.--Upon the making of 
arrangements mutually agreeable to the Director of the Office of Thrift 
Supervision and the Administrator, which arrangements may be modified 
from time to time by mutual agreement between them and may include but 
shall not be limited to the making of payments by the Director of the 
Office of Thrift Supervision and such agencies to the Administrator and 
by the Administrator to the Director of the Office of Thrift 
Supervision, the custody, management, and control of such buildings and 
facilities and of such real property shall be vested in the 
Administrator in accordance therewith. Until the making of such 
arrangements, such custody, management, and control, including the 
assignment and allotment and the reassignment and reallotment of 
building and other space, shall be vested in the Director of the Office 
of Thrift Supervision.
    ``(e) Proceeds.--Any proceeds (including advances) received by the 
Director of the Office of Thrift Supervision in connection with this 
subsection, and any proceeds from the sale or other disposition of real 
or other property acquired by the Director of the Office of Thrift 
Supervision under this section, shall be considered as receipts of the 
Director of the Office of Thrift Supervision, and obligations and 
expenditures of the Director of the Office of Thrift Supervision and 
such agencies in connection with this section shall not be considered 
as administrative expenses. As used in this section, the term 
`property' shall include interests in property.
    ``(f) Budget Program.--
            ``(1) In general.--With respect to its functions under this 
        section, the Director of the Office of Thrift Supervision 
        shall--
                    ``(A) annually prepare and submit a budget program 
                as provided in title I of the Government Corporation 
                Control Act with regard to wholly owned Government 
                corporations, and for purposes of this paragraph, the 
                terms `wholly owned Government corporations' and 
                `Government corporations', wherever used in such title, 
                shall include the Director of the Office of Thrift 
                Supervision; and
                    ``(B) maintain an integral set of accounts which 
                shall be audited by the General Accounting Office in 
                accordance with the principles and procedures 
                applicable to commercial corporate transactions, as 
                provided in such title, and no other settlement or 
                adjustment shall be required with respect to 
                transactions under this section or with respect to 
                claims, demands, or accounts by or against any person 
                arising thereunder.
            ``(2) Miscellaneous provisions.--The first budget program 
        shall be for the first full fiscal year beginning on or after 
        the date of enactment of this subsection. Except as otherwise 
        provided in this section or by the Director of the Office of 
        Thrift Supervision, the provisions of this section and the 
        functions thereby or thereunder subsisting shall be applicable 
        and exercisable notwithstanding and without regard to the Act 
        of June 20, 1938 (D.C. Code, secs. 5-413--5-428), except that 
        the proviso of section 16 thereof shall apply to any building 
        constructed under this section, and section 306 of the Act of 
        July 30, 1947 (61 Stat. 584), or any other provision of law 
        relating to the construction, alteration, repair, or furnishing 
        of public or other buildings or structures or the obtaining of 
        sites therefor, but any person or body in whom any such 
        function is vested may provide for delegation or redelegation 
        of the exercise of such function.
    ``(g) Limitation.--No obligation shall be incurred and no 
expenditure, except in liquidation of obligation, shall be made 
pursuant to paragraphs (1) and (2) of subsection (a), if the total 
amount of all obligations incurred pursuant thereto would thereupon 
exceed $13,200,000, or such greater amount as may be provided in an 
appropriations Act or other law.''.
            (3) 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 2 commas after 
                        ``permit'' and inserting ``or''; and
                            (ii) by striking the comma after 
                        ``require'';
            (4) in section 6 (12 U.S.C. 1426)--
                    (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'';
            (5) in section 10(b) (12 U.S.C. 1430(b))--
                    (A) in the subsection heading, by striking ``Formal 
                Board Resolution'' and inserting ``Approval of 
                Director''; and
                    (B) by striking ``by formal resolution'';
            (6) in section 21(b)(5) (12 U.S.C. 1441(b)(5)), by striking 
        ``Chairperson of the Federal Housing Finance Board'' and 
        inserting ``Director'';
            (7) in section 15 (12 U.S.C. 1435), by inserting ``or the 
        Director'' after ``the Board'';
            (8) by striking ``the Board'' each place that term appears 
        and inserting ``the Director'';
            (9) by striking ``The Board'' each place that term appears 
        and inserting ``The Director'';
            (10) by striking ``the Finance Board'' each place that term 
        appears and inserting ``the Director'';
            (11) by striking ``The Finance Board'' each place that term 
        appears and inserting ``The Director''; and
            (12) by striking ``Federal Housing Finance Board'' each 
        place that term appears and inserting ``Director''.

SEC. 1205. HOUSING GOALS.

    The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is amended 
by inserting after section 10b the following new section:

``SEC. 10C. HOUSING GOALS.

    ``(a) In General.--The Director shall establish housing goals with 
respect to the purchase of mortgages, if any, by the Federal Home Loan 
Banks. Such goals shall be consistent with the goals established under 
sections 1331 through 1334 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992.
    ``(b) Considerations.--In establishing the goals required by 
subsection (a), the Director shall consider the unique mission and 
ownership structure of the Federal Home Loan Banks.
    ``(c) Transition Period.--To facilitate an orderly transition, the 
Director shall establish interim target goals for purposes of this 
section for each of the 2 calendar years following the date of 
enactment of this section.
    ``(d) Monitoring and Enforcement of Goals.--The requirements of 
section 1336 of the Federal Housing Enterprises Safety and Soundness 
Act of 1992, shall apply to this section, in the same manner and to the 
same extent as that section applies to the Federal housing enterprises.
    ``(e) Annual Report.--The Director shall annually report to 
Congress on the performance of the Banks in meeting the goals 
established under this section.''.

SEC. 1206. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS.

    Section 4(a)(1) of the Federal Home Loan Bank Act (12 U.S.C. 
1424(a)(1)) is amended--
            (1) by inserting after ``savings bank,'' the following: 
        ``community development financial institution,''; and
            (2) in subparagraph (B), by inserting after ``United 
        States,'' the following: ``or, in the case of a community 
        development financial institution, is certified as a community 
        development financial institution under the Community 
        Development Banking and Financial Institutions Act of 1994.''.

SEC. 1207. SHARING OF INFORMATION AMONG FEDERAL HOME LOAN BANKS.

    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 AMONG FEDERAL HOME LOAN BANKS.

    ``(a) Information on Financial Condition.--In order to enable each 
Federal Home Loan Bank to evaluate the financial condition of one or 
more of the other Federal Home Loan Banks individually and the Federal 
Home Loan Bank System (including any risks associated with the issuance 
or repayment of consolidated Federal Home Loan Bank bonds and 
debentures or other borrowings and the joint and several liabilities of 
the Banks incurred due to such borrowings), as well as to comply with 
any of its obligations under the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.), the Director shall make available to the Banks 
such reports, records, or other information as may be available, 
relating to the condition of any Federal Home Loan Bank.
    ``(b) Sharing of Information.--
            ``(1) In general.--The Director shall promulgate 
        regulations to facilitate the sharing of information made 
        available under subsection (a) directly among the Federal Home 
        Loan Banks.
            ``(2) Limitation.--Notwithstanding paragraph (1), a Federal 
        Home Loan Bank responding to a request from another Bank or 
        from the Director for information pursuant to this section may 
        request that the Director determine that such information is 
        proprietary and that the public interest requires that such 
        information not be shared.
    ``(c) Limitation.--Nothing in this section shall affect the 
obligations of any Federal Home Loan Bank under the Securities Exchange 
Act of 1934 (15 U.S.C. 78a et seq.) or the regulations issued by the 
Securities and Exchange Commission thereunder.''.

SEC. 1208. EXCLUSION FROM CERTAIN REQUIREMENTS.

    (a) In General.--The Federal Home Loan Banks shall be exempt from 
compliance with--
            (1) sections 13(e), 14(a), and 14(c) of the Securities 
        Exchange Act of 1934, and related Commission regulations;
            (2) section 15 of the Securities Exchange Act of 1934, and 
        related Commission regulations, with respect to transactions in 
        the capital stock of a Federal Home Loan Bank;
            (3) section 17A of the Securities Exchange Act of 1934, and 
        related Commission regulations, with respect to the transfer of 
        the securities of a Federal Home Loan Bank; and
            (4) the Trust Indenture Act of 1939.
    (b) Member Exemption.--The members of the Federal Home Loan Bank 
System 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 Commission regulations, with respect to ownership of or 
transactions in the capital stock of the Federal Home Loan Banks by 
such members.
    (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, except to the extent provided in section 38 of 
                that Act.
            (2) Other obligations.--The debentures, bonds, and other 
        obligations issued under section 11 of the Federal Home Loan 
        Bank Act (12 U.S.C. 1431) 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; and
                    (C) government securities, within the meaning of 
                section 2(a)(16) of the Investment Company Act of 1940.
            (3) Brokers and dealers.--A person (other than a Federal 
        Home Loan Bank effecting transactions for members of the 
        Federal Home Loan Bank System) that effects transactions in the 
        capital stock or other obligations of a Federal Home Loan Bank, 
        for the account of others or for that person's own account, as 
        applicable, is a broker or dealer, as those terms are defined 
        in paragraphs (4) and (5), respectively, of section 3(a) of the 
        Securities Exchange Act of 1934, but is excluded from the 
        definition of--
                    (A) the term ``government securities broker'' under 
                section 3(a)(43) of the Securities Exchange Act of 
                1934; and
                    (B) the term ``government securities dealer'' under 
                section 3(a)(44) of the Securities Exchange Act of 
                1934.
    (d) Exemption From Reporting Requirements.--The Federal Home Loan 
Banks shall be exempt from periodic reporting requirements under the 
securities laws pertaining to the disclosure of--
            (1) related party transactions that occur in the ordinary 
        course of the business of the Banks with members; and
            (2) the unregistered sales of equity securities.
    (e) Tender Offers.--Commission rules relating to tender offers 
shall not apply in connection with transactions in the capital stock of 
the Federal Home Loan Banks.
    (f) Regulations.--
            (1) In general.--The Commission shall promulgate such rules 
        and regulations as may be necessary or appropriate in the 
        public interest or in furtherance of this section and the 
        exemptions provided in this section.
            (2) Considerations.--In issuing regulations under this 
        section, the Commission shall consider the distinctive 
        characteristics of the Federal Home Loan Banks when 
        evaluating--
                    (A) the accounting treatment with respect to the 
                payment to the Resolution Funding Corporation;
                    (B) the role of the combined financial statements 
                of the Federal Home Loan Banks;
                    (C) the accounting classification of redeemable 
                capital stock; and
                    (D) the accounting treatment related to the joint 
                and several nature of the obligations of the Banks.
    (g) Definitions.--As used in this section--
            (1) the terms ``Bank'', ``Federal Home Loan Bank'', 
        ``member'', and ``Federal Home Loan Bank System'' have the same 
        meanings as in section 2 of the Federal Home Loan Bank Act (12 
        U.S.C. 1422);
            (2) the term ``Commission'' means the Securities and 
        Exchange Commission; and
            (3) the term ``securities laws'' has the same meaning as in 
        section 3(a)(47) of the Securities Exchange Act of 1934 (15 
        U.S.C. 78c(a)(47)).

SEC. 1209. VOLUNTARY MERGERS.

    Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 1446) is 
amended--
            (1) by striking ``Whenever'' and inserting ``(a) In 
        General.--Whenever''; and
            (2) by adding at the end the following:
    ``(b) Voluntary Mergers Authorized.--
            ``(1) In general.--Any Federal Home Loan Bank may, with the 
        approval of the Director and of the boards of directors of the 
        Banks involved, merge with another Bank.
            ``(2) Regulations required.--The Director shall promulgate 
        regulations establishing the conditions and procedures for the 
        consideration and approval of any voluntary merger described in 
        paragraph (1), including the procedures for Bank member 
        approval.''.

SEC. 1210. AUTHORITY TO REDUCE DISTRICTS.

    Section 3 of the Federal Home Loan Bank Act (12 U.S.C. 1423) is 
amended--
            (1) by striking ``As soon'' and inserting ``(a) In 
        General.--As soon''; and
            (2) by adding at the end the following:
    ``(b) Authority To Reduce Districts.--Notwithstanding subsection 
(a), the number of districts may be reduced to a number less than 8--
            ``(1) pursuant to a voluntary merger between Banks, as 
        approved pursuant to section 26(b); or
            ``(2) pursuant to a decision by the Director to liquidate a 
        Bank pursuant to section 1367 of the Federal Housing 
        Enterprises Financial Safety and Soundness Act of 1992.''.

SEC. 1211. 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 201(3) of this Act, 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. 1212. PUBLIC USE DATABASE; REPORTS TO CONGRESS.

    Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 1430) is 
amended--
            (1) in subsection (j)(12)--
                    (A) by striking subparagraph (C) and inserting the 
                following:
                    ``(C) Reports.--The Director shall annually report 
                to the Committee on Banking, Housing, and Urban Affairs 
                of the Senate and the Committee on Financial Services 
                of the House of Representatives on the collateral 
                pledged to the Banks, including an analysis of 
                collateral by type and by Bank district.''; and
                    (B) by adding at the end the following:
                    ``(D) Submission to congress.--The Director shall 
                submit the reports under subparagraphs (A) and (C) to 
                the Committee on Banking, Housing, and Urban Affairs of 
                the Senate and the Committee on Financial Services of 
                the House of Representatives, not later than 180 days 
                after the date of enactment of the Federal Housing 
                Finance Regulatory Reform Act of 2008.''; and
            (2) by adding at the end the following:
    ``(k) Public Use Database.--
            ``(1) Data.--Each Federal Home Loan Bank shall provide to 
        the Director, in a form determined by the Director, census 
        tract level data relating to mortgages purchased, if any, 
        including--
                    ``(A) data consistent with that reported under 
                section 1323 of the Federal Housing Enterprises 
                Financial Safety and Soundness Act of 1992;
                    ``(B) data elements required to be reported under 
                the Home Mortgage Disclosure Act of 1975; and
                    ``(C) any other data elements that the Director 
                considers appropriate.
            ``(2) Public use database.--
                    ``(A) In general.--The Director shall make 
                available to the public, in a form that is useful to 
                the public (including forms accessible electronically), 
                and to the extent practicable, the data provided to the 
                Director under paragraph (1).
                    ``(B) Proprietary information.--Not withstanding 
                subparagraph (A), the Director may not provide public 
                access to, or disclose to the public, any information 
                required to be submitted under this subsection that the 
                Director determines is proprietary or that would 
                provide personally identifiable information and that is 
                not otherwise publicly accessible through other forms, 
                unless the Director determines that it is in the public 
                interest to provide such information.''.

SEC. 1213. SEMIANNUAL REPORTS.

    Section 21B of the Federal Home Loan Bank Act is amended in 
subsection (f)(2)(C), by adding at the end the following:
                            ``(v) Semiannual reports.--The Director 
                        shall report semiannually to the Committee on 
                        Banking, Housing, and Urban Affairs of the 
                        Senate and the Committee on Financial Services 
                        of the House of Representatives on the 
                        projected date for the completion of 
                        contributions required by this section.''.

SEC. 1214. LIQUIDATION OR REORGANIZATION OF A FEDERAL HOME LOAN BANK.

    Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 1446) is 
amended by adding at the end the following: ``At least 30 days prior to 
liquidating or reorganizing any Bank under this section, the Director 
shall notify the Bank of its determination and the facts and 
circumstances upon which such determination is based. The Bank may 
contest that determination in a hearing before the Director, in which 
all issues shall be determined on the record pursuant to section 554 of 
title 5, United States Code.''.

SEC. 1215. STUDY AND REPORT TO CONGRESS ON SECURITIZATION OF ACQUIRED 
              MEMBER ASSETS.

    (a) Study.--The Director shall conduct a study on securitization of 
home mortgage loans purchased or to be purchased from member financial 
institutions under the Acquired Member Assets programs. In conducting 
the study, the Director shall establish a process for the formal 
submission of comments.
    (b) Elements.--The study shall encompass--
            (1) the benefits and risks associated with securitization 
        of Acquired Member Assets;
            (2) the potential impact of securitization upon liquidity 
        in the mortgage and broader credit markets;
            (3) the ability of the Federal Home Loan Bank or Banks in 
        question to manage the risks associated with such a program;
            (4) the impact of such a program on the existing activities 
        of the Banks, including their mortgage portfolios and advances; 
        and
            (5) the joint and several liability of the Banks and the 
        cooperative structure of the Federal Home Loan Bank System.
    (c) Consultations.--In conducting the study under this section, the 
Director shall consult with the Federal Home Loan Banks, the Banks' 
fiscal agent, representatives of the mortgage lending industry, 
practitioners in the structured finance field, and other experts as 
needed.
    (d) Report.--Not later than 1 year after the date of enactment of 
this Act, the Director shall submit a report to Congress on the results 
of the study conducted under subsection (a), including policy 
recommendations based on the analysis of the Director of the 
feasibility of mortgage-backed securities issuance by a Federal Home 
Loan Bank or Banks and the risks and benefits associated with such 
program or programs.
    (e) Definitions.--As used in this section, the terms ``member'', 
``Bank'', and ``Federal Home Loan Bank'' have the same meanings as in 
section 2 of the Federal Home Loan Bank Act (12 U.S.C. 1422).

SEC. 1216. 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, and 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) FIRREA.--Section 1216 of the Financial Institutions Reform, 
Recovery, and Enhancement Act of 1989 (12 U.S.C. 1833e) is amended--
            (1) in subsection (a), by striking paragraph (3) and 
        inserting the following:
            ``(3) the Federal Housing Finance Agency;'';
            (2) in subsection (b), by striking ``Federal National 
        Mortgage Association'' and inserting ``Federal Home Loan Banks, 
        the Federal National Mortgage Association,''; and
            (3) in subsection (c), by striking ``Finance Board'' and 
        inserting ``Finance Agency''.

SEC. 1217. STUDY ON FEDERAL HOME LOAN BANK ADVANCES.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Director shall conduct a study and submit a report to 
the Committee on Banking, Housing, and Urban Affairs of the Senate and 
the Committee on Financial Services of the House or Representatives on 
the extent to which loans and securities used as collateral to support 
Federal Home Loan Bank advances are consistent with the interagency 
guidance on nontraditional mortgage products.
    (b) Required Content.--The study required under subsection (a) 
shall--
            (1) consider and recommend any additional regulations, 
        guidance, advisory bulletins, or other administrative actions 
        necessary to ensure that the Federal Home Loan Banks are not 
        supporting loans with predatory characteristics; and
            (2) include an opportunity for the public to comment on any 
        recommendations made under paragraph (1).

SEC. 1218. FEDERAL HOME LOAN BANK REFINANCING AUTHORITY FOR CERTAIN 
              RESIDENTIAL MORTGAGE LOANS.

    Section 10(j)(2) of the Federal Home Loan Bank Act (12 U.S.C. 
1430(j)(2)) is amended--
            (1) in subparagraph (A), by striking ``or'' at the end;
            (2) in subparagraph (B), by striking the period at the end 
        and inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(C) during the 2-year period beginning on the 
                date of enactment of this subparagraph, refinance loans 
                that are secured by a first mortgage on a primary 
                residence of any family having an income at or below 80 
                percent of the median income for the area.''.

TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND 
                   THE FEDERAL HOUSING FINANCE BOARD

                           Subtitle A--OFHEO

SEC. 1301. ABOLISHMENT OF OFHEO.

    (a) In General.--Effective at the end of the 1-year period 
beginning on the date of 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 1-year period beginning on 
the date of enactment of this Act, the Director of the Office of 
Federal Housing Enterprise Oversight, solely for the purpose of winding 
up the affairs of the Office of Federal Housing Enterprise Oversight--
            (1) shall 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 under section 1303; 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 
title I 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 an employee 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 1303.
    (d) Use of Property and Services.--
            (1) Property.--The Director may use the property of the 
        Office of Federal Housing Enterprise Oversight to perform 
        functions which have been transferred to the Director for such 
        time as is reasonable to facilitate the orderly transfer of 
        functions transferred under any other provision of this Act or 
        any amendment made by this Act 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 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) Continuation of Services.--The Director may use the services of 
employees and other personnel of the Office of Federal Housing 
Enterprise Oversight, on a reimbursable basis, to perform functions 
which have been transferred to the Director for such time as is 
reasonable to facilitate the orderly transfer of functions pursuant to 
any other provision of this Act or any amendment made by this Act to 
any other provision of law.
    (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 Director 
        of the Office of Federal Housing Enterprise Oversight, or any 
        other person, which--
                    (A) arises under--
                            (i) the Federal Housing Enterprises 
                        Financial Safety and Soundness Act of 1992;
                            (ii) the Federal National Mortgage 
                        Association Charter Act;
                            (iii) the Federal Home Loan Mortgage 
                        Corporation Act; or
                            (iv) any other provision of law applicable 
                        with respect to such Office; and
                    (B) existed on the day before the date of 
                abolishment under subsection (a).
            (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 Act, 
        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. 1302. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.

    (a) In General.--All regulations, orders, and determinations 
described in subsection (b) shall remain in effect according to the 
terms of such regulations, orders, and determinations, and shall be 
enforceable by or against the Director or the Secretary of Housing and 
Urban Development, as the case may be, until modified, terminated, set 
aside, or superseded in accordance with applicable law by the Director 
or the Secretary, as the case may be, any court of competent 
jurisdiction, or operation of law.
    (b) Applicability.--A regulation, order, or determination is 
described in this subsection if it--
            (1) was issued, made, prescribed, or allowed to become 
        effective by--
                    (A) the Office of Federal Housing Enterprise 
                Oversight;
                    (B) the Secretary of Housing and Urban Development, 
                and relates to the authority of the Secretary under--
                            (i) the Federal Housing Enterprises 
                        Financial Safety and Soundness Act of 1992;
                            (ii) the Federal National Mortgage 
                        Association Charter Act, with respect to the 
                        Federal National Mortgage Association; or
                            (iii) the Federal Home Loan Mortgage 
                        Corporation Act, with respect to the Federal 
                        Home Loan Mortgage Corporation; or
                    (C) a court of competent jurisdiction, and relates 
                to functions transferred by this Act; and
            (2) is in effect on the effective date of the abolishment 
        under section 1301(a).

SEC. 1303. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.

    (a) Transfer.--Each employee of the Office of Federal Housing 
Enterprise Oversight shall be transferred to the Agency for employment, 
not later than the effective date of the abolishment under section 
1301(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.--
            (1) In general.--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.
            (2) No involuntary separation or reduction.--An employee 
        transferred under subsection (a) holding a permanent position 
        on the day immediately preceding the transfer may not be 
        involuntarily separated or reduced in grade or compensation 
        during the 12-month period beginning on the date of transfer, 
        except for cause, or, in the case of a temporary employee, 
        separated in accordance with the terms of the appointment of 
        the employee.
    (c) Appointment Authority for Excepted and Senior Executive Service 
Employees.--
            (1) In general.--In the case of an employee occupying a 
        position 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 position shall be transferred, subject to paragraph (2).
            (2) Decline of transfer.--The Director may decline a 
        transfer of authority under paragraph (1) to the extent that 
        such authority relates to--
                    (A) a position excepted from the competitive 
                service because of its confidential, policymaking, 
                policy-determining, or policy-advocating character; or
                    (B) a noncareer position in the Senior Executive 
                Service (within the meaning of section 3132(a)(7) of 
                title 5, United States Code).
    (d) Reorganization.--If the Director determines, after the end of 
the 1-year period beginning on the effective date of the abolishment 
under section 1301(a), that a reorganization of the combined workforce 
is required, that reorganization shall be deemed a major reorganization 
for purposes of affording affected employee 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 Office of Federal 
        Housing Enterprise Oversight accepting employment with the 
        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 
        Agency or the Office of Federal Housing Enterprise Oversight of 
        the Department of Housing and Urban Development, as applicable, 
        including insurance, to which such employee belongs on the date 
        of the abolishment under section 1301(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.--
                    (A) In general.--The difference in the costs 
                between the benefits which would have been provided by 
                the Office of Federal Housing Enterprise Oversight and 
                those provided by this section shall be paid by the 
                Director.
                    (B) Health insurance.--If any employee elects to 
                give up membership in a health insurance program or the 
                health insurance program is not continued by the 
                Director, the employee shall be permitted to select an 
                alternate Federal health insurance program not later 
                than 30 days after the date of such election or notice, 
                without regard to any other regularly scheduled open 
                season.

SEC. 1304. TRANSFER OF PROPERTY AND FACILITIES.

    Upon the effective date of its abolishment under section 1301(a), 
all property of the Office of Federal Housing Enterprise Oversight 
shall transfer to the Agency.

               Subtitle B--Federal Housing Finance Board

SEC. 1311. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.

    (a) In General.--Effective at the end of the 1-year 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 1-year period beginning on 
the date of enactment of this Act, the Board, solely for the purpose of 
winding up the affairs of the Board--
            (1) shall manage the employees of the 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 1313; 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 
titles I and II and the abolishment of the Board under subsection (a) 
may not be construed to affect the status of any employee of the Board 
as an employee 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 1313.
    (d) Use of Property and Services.--
            (1) Property.--The Director may use the property of the 
        Board to perform functions which have been transferred to the 
        Director, for such time as is reasonable to facilitate the 
        orderly transfer of functions transferred under any other 
        provision of this Act or any amendment made by this Act 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 1-year period under subsection (a) in 
        connection with functions that are transferred to the Director 
        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) Continuation of Services.--The Director may use the services of 
employees and other personnel of the Board, on a reimbursable basis, to 
perform functions which have been transferred to the Director for such 
time as is reasonable to facilitate the orderly transfer of functions 
pursuant to any other provision of this Act or any amendment made by 
this Act to any other provision of law.
    (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, 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 
                the 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 under this Act to the Director shall abate 
        by reason of the enactment of this Act, except that the 
        Director shall be substituted for the Board or any member 
        thereof as a party to any such action or proceeding.

SEC. 1312. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.

    (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 until 
modified, terminated, set aside, or superseded in accordance with 
applicable law by the 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 Act; and
            (2) is in effect on the effective date of the abolishment 
        under section 1311(a).

SEC. 1313. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL HOUSING 
              FINANCE BOARD.

    (a) Transfer.--Each employee of the Board shall be transferred to 
the Agency for employment, not later than the effective date of the 
abolishment under section 1311(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.--
            (1) In general.--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.
            (2) No involuntary separation or reduction.--An employee 
        holding a permanent position on the day immediately preceding 
        the transfer may not be involuntarily separated or reduced in 
        grade or compensation during the 12-month period beginning on 
        the date of transfer, except for cause, or, if the employee is 
        a temporary employee, separated in accordance with the terms of 
        the appointment of the employee.
    (c) Appointment Authority for Excepted Employees.--
            (1) In general.--In the case of an employee occupying a 
        position in the excepted service, any appointment authority 
        established under law or by regulations of the Office of 
        Personnel Management for filling such position shall be 
        transferred, subject to paragraph (2).
            (2) Decline of transfer.--The Director may decline a 
        transfer of authority under paragraph (1), to the extent that 
        such authority relates to a position excepted from the 
        competitive service because of its confidential, policymaking, 
        policy-determining, or policy-advocating character.
    (d) Reorganization.--If the Director determines, after the end of 
the 1-year period beginning on the effective date of the abolishment 
under section 1311(a), that a reorganization of the combined workforce 
is required, that reorganization shall be deemed a major reorganization 
for purposes of affording affected employee 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 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 Agency or the Board, as applicable, including 
        insurance, to which such employee belongs on the effective date 
        of the abolishment under section 1311(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.
            (2) Cost differential.--
                    (A) In general.--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.
                    (B) Health insurance.--If any employee elects to 
                give up membership in a health insurance program or the 
                health insurance program is not continued by the 
                Director, the employee shall be permitted to select an 
                alternate Federal health insurance program not later 
                than 30 days after the date of such election or notice, 
                without regard to any other regularly scheduled open 
                season.

SEC. 1314. TRANSFER OF PROPERTY AND FACILITIES.

    Upon the effective date of the abolishment under section 1311(a), 
all property of the Board shall transfer to the Agency.

                     TITLE IV--HOPE FOR HOMEOWNERS

SEC. 1401. SHORT TITLE.

    This title may be cited as the ``HOPE for Homeowners Act of 2008''.

SEC. 1402. ESTABLISHMENT OF HOPE FOR HOMEOWNERS PROGRAM.

    (a) Establishment.--Title II of the National Housing Act (12 U.S.C. 
1707 et seq.) is amended by adding at the end the following:

``SEC. 257. HOPE FOR HOMEOWNERS PROGRAM.

    ``(a) Establishment.--There is established in the Federal Housing 
Administration a HOPE for Homeowners Program.
    ``(b) Purpose.--The purpose of the HOPE for Homeowners Program is--
            ``(1) to create an FHA program, participation in which is 
        voluntary on the part of homeowners and existing loan holders 
        to insure refinanced loans for distressed borrowers to support 
        long-term, sustainable homeownership;
            ``(2) to allow homeowners to avoid foreclosure by reducing 
        the principle balance outstanding, and interest rate charged, 
        on their mortgages;
            ``(3) to help stabilize and provide confidence in mortgage 
        markets by bringing transparency to the value of assets based 
        on mortgage assets;
            ``(4) to target mortgage assistance under this section to 
        homeowners for their principal residence;
            ``(5) to enhance the administrative capacity of the FHA to 
        carry out its expanded role under the HOPE for Homeowners 
        Program;
            ``(6) to ensure the HOPE for Homeowners Program remains in 
        effect only for as long as is necessary to provide stability to 
        the housing market; and
            ``(7) to provide servicers of delinquent mortgages with 
        additional methods and approaches to avoid foreclosure.
    ``(c) Establishment and Implementation of Program Requirements.--
            ``(1) Duties of the board.--In order to carry out the 
        purposes of the HOPE for Homeowners Program, the Board shall--
                    ``(A) establish requirements and standards for the 
                program; and
                    ``(B) prescribe such regulations and provide such 
                guidance as may be necessary or appropriate to 
                implement such requirements and standards.
            ``(2) Duties of the secretary.--In carrying out any of the 
        program requirements or standards established under paragraph 
        (1), the Secretary may issue such interim guidance and 
        mortgagee letters as the Secretary determines necessary or 
        appropriate.
    ``(d) Insurance of Mortgages.--The Secretary is authorized upon 
application of a mortgagee to make commitments to insure or to insure 
any eligible mortgage that has been refinanced in a manner meeting the 
requirements under subsection (e).
    ``(e) Requirements of Insured Mortgages.--To be eligible for 
insurance under this section, a refinanced eligible mortgage shall 
comply with all of the following requirements:
            ``(1) Lack of capacity to pay existing mortgage.--
                    ``(A) Borrower certification.--
                            ``(i) In general.--The mortgagor shall 
                        provide certification to the Secretary that the 
                        mortgagor has not intentionally defaulted on 
                        the mortgage or any other debt, and has not 
                        knowingly, or willfully and with actual 
                        knowledge, furnished material information known 
                        to be false for the purpose of obtaining any 
                        eligible mortgage.
                            ``(ii) Penalties.--
                                    ``(I) False statement.--Any 
                                certification filed pursuant to clause 
                                (i) shall contain an acknowledgment 
                                that any willful false statement made 
                                in such certification is punishable 
                                under section 1001, of title 18, United 
                                States Code, by fine or imprisonment of 
                                not more than 5 years, or both.
                                    ``(II) Liability for repayment.--
                                The mortgagor shall agree in writing 
                                that the mortgagor shall be liable to 
                                repay to the Federal Housing 
                                Administration 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 
                                Secretary.
                    ``(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 of that mortgagor at such time, 
                greater than 31 percent (or such higher amount as the 
                Board determines appropriate).
            ``(2) Determination of principal obligation amount.--The 
        principal obligation amount of the refinanced eligible mortgage 
        to be insured shall--
                    ``(A) be determined by the reasonable ability of 
                the mortgagor to make his or her mortgage payments, as 
                such ability is determined by the Secretary pursuant to 
                section 203(b)(4) or by any other underwriting 
                standards established by the Board; and
                    ``(B) not exceed 90 percent of the appraised value 
                of the property to which such mortgage relates.
            ``(3) Required waiver of prepayment penalties and fees.--
        All penalties for prepayment or refinancing of the eligible 
        mortgage, and all fees and penalties related to default or 
        delinquency on the eligible mortgage, shall be waived or 
        forgiven.
            ``(4) Extinguishment of subordinate liens.--
                    ``(A) Required agreement.--All holders of 
                outstanding mortgage liens on the property to which the 
                eligible mortgage relates shall agree to accept the 
                proceeds of the insured loan as payment in full of all 
                indebtedness under the eligible mortgage, and all 
                encumbrances related to such eligible mortgage shall be 
                removed. The Secretary may take such actions, subject 
                to standards established by the Board under 
                subparagraph (B), as may be necessary and 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.
                    ``(B) Shared appreciation.--
                            ``(i) In general.--The Board shall 
                        establish standards and policies that will 
                        allow for the payment to the holder of any 
                        existing subordinate mortgage of a portion of 
                        any future appreciation in the property secured 
                        by such eligible mortgage that is owed to the 
                        Secretary pursuant to subsection (k).
                            ``(ii) Factors.--In establishing the 
                        standards and policies required under clause 
                        (i), the Board shall take into consideration--
                                    ``(I) the status of any subordinate 
                                mortgage;
                                    ``(II) the outstanding principal 
                                balance of and accrued interest on the 
                                existing senior mortgage and any 
                                outstanding subordinate mortgages;
                                    ``(III) the extent to which the 
                                current appraised value of the property 
                                securing a subordinate mortgage is less 
                                than the outstanding principal balance 
                                and accrued interest on any other liens 
                                that are senior to such subordinate 
                                mortgage; and
                                    ``(IV) such other factors as the 
                                Board determines to be appropriate.
                    ``(C) Voluntary program.--This paragraph 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.
            ``(5) Term of mortgage.--The refinanced eligible mortgage 
        to be insured shall--
                    ``(A) bear interest at a single rate that is fixed 
                for the entire term of the mortgage; and
                    ``(B) have a maturity of not less than 30 years 
                from the date of the beginning of amortization of such 
                refinanced eligible mortgage.
            ``(6) Maximum loan amount.--The principal obligation amount 
        of the eligible mortgage to be insured shall not exceed 132 
        percent of the dollar amount limitation in effect for 2007 
        under section 305(a)(2) of the Federal Home Loan Mortgage 
        Corporation Act (12 U.S.C. 1454(a)(2)) for a property of the 
        applicable size.
            ``(7) Prohibition on second liens.--A mortgagor may not 
        grant a new second lien on the mortgaged property during the 
        first 5 years of the term of the mortgage insured under this 
        section.
            ``(8) 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).
            ``(9) Documentation and verification of income.--In 
        complying with the FHA underwriting requirements under the HOPE 
        for Homeowners Program under this section, the mortgagee under 
        the mortgage shall document and verify the income of the 
        mortgagor by procuring an Internal Revenue Service transcript 
        of the income tax returns of the mortgagor for the 2 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 Board or the Secretary shall establish.
            ``(10) Mortgage fraud.--The mortgagor shall not have been 
        convicted under any provision of Federal or State law for 
        fraud, including mortgage fraud.
            ``(11) Primary residence.--The mortgagor shall provide 
        documentation satisfactory in the determination of the 
        Secretary to prove that the residence covered by the mortgage 
        to be insured under this section is occupied by the mortgagor 
        as the primary residence of the mortgagor, and that such 
        residence is the only residence in which the mortgagor has any 
        present ownership interest.
    ``(f) Study of Auction or Bulk Refinance Program.--
            ``(1) Study.--The Board 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 this 
        section. 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.
            ``(2) Content.--
                    ``(A) Analysis.--The study required under paragraph 
                (1) shall analyze--
                            ``(i) the feasibility of establishing a 
                        mechanism that would facilitate the more rapid 
                        refinancing of borrowers at risk of foreclosure 
                        into performing mortgages insured under this 
                        section;
                            ``(ii) whether such a mechanism would 
                        provide an effective and efficient mechanism to 
                        reduce foreclosures on qualified existing 
                        mortgages;
                            ``(iii) 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;
                            ``(iv) whether there are other mechanisms 
                        or authority that would be useful to reduce 
                        foreclosure; and
                            ``(v) and any other factors that the Board 
                        considers relevant.
                    ``(B) Determinations.--To the extent that the Board 
                finds that a facility of the type described in 
                subparagraph (A) is feasible and useful, the study 
                shall--
                            ``(i) determine and identify any additional 
                        authority or resources needed to establish and 
                        operate such a mechanism;
                            ``(ii) determine whether there is a need 
                        for additional authority with respect to the 
                        loan underwriting criteria established in this 
                        section or with respect to eligibility of 
                        participating borrowers, lenders, or holders of 
                        liens;
                            ``(iii) 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 this section.
            ``(3) Report.--Not later than the expiration of the 60-day 
        period beginning on the date of the enactment of this section, 
        the Board shall submit a report regarding the results of the 
        study conducted under this subsection 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 paragraph (2)(A) and of the determinations made 
        pursuant to paragraph (2)(B), and shall include any other 
        findings and recommendations of the Board pursuant to the 
        study, including identifying various options for mechanisms 
        described in paragraph (1).
    ``(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, nonpayment 
        for services rendered, or bribery, the development, reporting, 
        result, or review of a real estate appraisal sought in 
        connection with the mortgage.
            ``(2) 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) Standards To Protect Against Adverse Selection.--
            ``(1) In general.--The Board shall, by rule or order, 
        establish standards and policies to require the underwriter of 
        the insured loan to provide such representations and warranties 
        as the Board considers necessary or appropriate to enforce 
        compliance with all underwriting and appraisal standards of the 
        HOPE for Homeowners Program.
            ``(2) Exclusion for violations.--The Board shall prohibit 
        the Secretary from paying insurance benefits to a mortgagee who 
        violates the representations and warranties, as established 
        under paragraph (1), or in any case in which a mortgagor fails 
        to make the first payment on a refinanced eligible mortgage.
            ``(3) Other authority.--The Board may establish such other 
        standards or policies as necessary to protect against adverse 
        selection, including requiring loans identified by the 
        Secretary as higher risk loans to demonstrate payment 
        performance for a reasonable period of time prior to being 
        insured under the program.
    ``(i) Premiums.--For each refinanced eligible mortgage insured 
under this section, the Secretary shall establish and collect--
            ``(1) at the time of insurance, a single premium payment in 
        an amount equal to 3 percent of the amount of the original 
        insured principal obligation of the refinanced eligible 
        mortgage, which shall be paid from the proceeds of the mortgage 
        being insured under this section, through the reduction of the 
        amount of indebtedness that existed on the eligible mortgage 
        prior to refinancing; and
            ``(2) in addition to the premium required under paragraph 
        (1), an annual premium in an amount equal to 1.5 percent of the 
        amount of the remaining insured principal balance of the 
        mortgage.
    ``(j) Origination Fees and Interest Rate.--The Board shall 
establish--
            ``(1) a reasonable limitation on origination fees for 
        refinanced eligible mortgages insured under this section; and
            ``(2) procedures to ensure that interest rates on such 
        mortgages shall be commensurate with market rate interest rates 
        on such types of loans.
    ``(k) Equity and Appreciation.--
            ``(1) Five-year phase-in for equity as a result of sale or 
        refinancing.--For each eligible mortgage insured under this 
        section, the Secretary and the mortgagor of such mortgage 
        shall, upon any sale or disposition of the property to which 
        such mortgage relates, or upon the subsequent refinancing of 
        such mortgage, be entitled to the following with respect to any 
        equity created as a direct result of such sale or refinancing:
                    ``(A) If such sale or refinancing occurs during the 
                period that begins on the date that such mortgage is 
                insured and ends 1 year after such date of insurance, 
                the Secretary shall be entitled to 100 percent of such 
                equity.
                    ``(B) If such sale or refinancing occurs during the 
                period that begins 1 year after such date of insurance 
                and ends 2 years after such date of insurance, the 
                Secretary shall be entitled to 90 percent of such 
                equity and the mortgagor shall be entitled to 10 
                percent of such equity.
                    ``(C) If such sale or refinancing occurs during the 
                period that begins 2 years after such date of insurance 
                and ends 3 years after such date of insurance, the 
                Secretary shall be entitled to 80 percent of such 
                equity and the mortgagor shall be entitled to 20 
                percent of such equity.
                    ``(D) If such sale or refinancing occurs during the 
                period that begins 3 years after such date of insurance 
                and ends 4 years after such date of insurance, the 
                Secretary shall be entitled to 70 percent of such 
                equity and the mortgagor shall be entitled to 30 
                percent of such equity.
                    ``(E) If such sale or refinancing occurs during the 
                period that begins 4 years after such date of insurance 
                and ends 5 years after such date of insurance, the 
                Secretary shall be entitled to 60 percent of such 
                equity and the mortgagor shall be entitled to 40 
                percent of such equity.
                    ``(F) If such sale or refinancing occurs during any 
                period that begins 5 years after such date of 
                insurance, the Secretary shall be entitled to 50 
                percent of such equity and the mortgagor shall be 
                entitled to 50 percent of such equity.
            ``(2) Appreciation in value.--For each eligible mortgage 
        insured under this section, the Secretary and the mortgagor of 
        such mortgage shall, upon any sale or disposition of the 
        property to which such mortgage relates, each be entitled to 50 
        percent of any appreciation in value of the appraised value of 
        such property that has occurred since the date that such 
        mortgage was insured under this section.
    ``(l) Establishment of HOPE Fund.--
            ``(1) In general.--There is established in the Federal 
        Housing Administration a revolving fund to be known as the Home 
        Ownership Preservation Entity Fund, which shall be used by the 
        Board for carrying out the mortgage insurance obligations under 
        this section.
            ``(2) Management of fund.--The HOPE Fund shall be 
        administered and managed by the Secretary, who shall establish 
        reasonable and prudent criteria for the management and 
        operation of any amounts in the HOPE Fund.
    ``(m) Limitation on Aggregate Insurance Authority.--The aggregate 
original principal obligation of all mortgages insured under this 
section may not exceed $300,000,000,000.
    ``(n) Reports by the Board.--The Board shall submit monthly reports 
to the Congress identifying the progress of the HOPE for Homeowners 
Program, which shall contain the following information for each month:
            ``(1) The number of new mortgages insured under this 
        section, including the location of the properties subject to 
        such mortgages by census tract.
            ``(2) The aggregate principal obligation of new mortgages 
        insured under this section.
            ``(3) The average amount by which the principle balance 
        outstanding on mortgages insured this section was reduced.
            ``(4) The amount of premiums collected for insurance of 
        mortgages under this section.
            ``(5) The claim and loss rates for mortgages insured under 
        this section.
            ``(6) Any other information that the Board considers 
        appropriate.
    ``(o) Required Outreach Efforts.--The Secretary shall carry out 
outreach efforts to ensure that homeowners, lenders, and the general 
public are aware of the opportunities for assistance available under 
this section.
    ``(p) Enhancement of FHA Capacity.--Under the direction of the 
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.
    ``(q) 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.
    ``(r) Sunset.--The Secretary may not enter into any new commitment 
to insure any refinanced eligible mortgage, or newly insure any 
refinanced eligible mortgage pursuant to this section before October 1, 
2008 or after September 30, 2011.
    ``(s) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Approved financial institution or mortgagee.--The 
        term `approved financial institution or mortgagee' means a 
        financial institution or mortgagee approved by the Secretary 
        under section 203 as responsible and able to service mortgages 
        responsibly.
            ``(2) Board.--The term `Board' means the Board of Directors 
        of the HOPE for Homeowners Program. The Board shall be composed 
        of the Secretary, the Secretary of the Treasury, the 
        Chairperson of the Board of Governors of the Federal Reserve 
        System, and the Chairperson of the Board of Directors of the 
        Federal Deposit Insurance Corporation.
            ``(3) Eligible mortgage.--The term `eligible mortgage' 
        means a mortgage--
                    ``(A) the mortgagor of which--
                            ``(i) occupies such property as his or her 
                        principal residence; and
                            ``(ii) cannot, subject to subsection 
                        (e)(1)(B) and such other standards established 
                        by the Board, afford his or her mortgage 
                        payments; and
                    ``(B) originated on or before January 1, 2008.
            ``(4) 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.
            ``(5) 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.
            ``(6) HOPE for homeowners program.--The term `HOPE for 
        Homeowners Program' means the program established under this 
        section.
            ``(7) Secretary.--The term `Secretary' means the Secretary 
        of Housing and Urban Development, except where specifically 
        provided otherwise.
    ``(t) Requirements Related to the Board.--
            ``(1) Compensation, actual, necessary, and transportation 
        expenses.--
                    ``(A) Federal employees.--A member of the Board who 
                is an officer or employee of the Federal Government 
                shall serve without additional pay (or benefits in the 
                nature of compensation) for service as a member of the 
                Board.
                    ``(B) Travel expenses.--Members of the Board shall 
                be entitled to receive travel expenses, including per 
                diem in lieu of subsistence, equivalent to those set 
                forth in subchapter I of chapter 57 of title 5, United 
                States Code.
            ``(2) Bylaws.--The Board may prescribe, amend, and repeal 
        such bylaws as may be necessary for carrying out the functions 
        of the Board.
            ``(3) Quorum.--A majority of the Board shall constitute a 
        quorum.
            ``(4) Staff; experts and consultants.--
                    ``(A) Detail of government employees.--Upon request 
                of the Board, any Federal Government employee may be 
                detailed to the Board without reimbursement, and such 
                detail shall be without interruption or loss of civil 
                service status or privilege.
                    ``(B) Experts and consultants.--The Board shall 
                procure the services of experts and consultants as the 
                Board considers appropriate.
    ``(u) Rule of Construction Related to Voluntary Nature of the 
Program.--This section shall not be construed to require that any 
approved financial institution or mortgagee participate in any activity 
authorized under this section, including any activity related to the 
refinancing of an eligible mortgage.
    ``(v) Rule of Construction Related to Insurance of Mortgages.--
Except as otherwise provided for in this section or by action of the 
Board, the provisions and requirements of section 203(b) shall apply 
with respect to the insurance of any eligible mortgage under this 
section.
    ``(w) HOPE Bonds.--
            ``(1) Issuance and repayment of bonds.--Notwithstanding 
        section 504(b) of the Federal Credit Reform Act of 1990 (2 
        U.S.C. 661d(b)), the Secretary of the Treasury shall--
                    ``(A) subject to such terms and conditions as the 
                Secretary of the Treasury deems necessary, issue 
                Federal credit instruments, to be known as `HOPE 
                Bonds', that are callable at the discretion of the 
                Secretary of the Treasury and do not, in the aggregate, 
                exceed the amount specified in subsection (m);
                    ``(B) provide the subsidy amounts necessary for 
                loan guarantees under the HOPE for Homeowners Program, 
                not to exceed the amount specified in subsection (m), 
                in accordance with the provisions of the Federal Credit 
                Reform Act of 1990 (2 U.S.C. 661 et seq.), except as 
                provided in this paragraph; and
                    ``(C) use the proceeds from HOPE Bonds only to pay 
                for the net costs to the Federal Government of the HOPE 
                for Homeowners Program, including administrative costs.
            ``(2) Reimbursements to treasury.--Funds received pursuant 
        to section 1338(b) of the Federal Housing Enterprises 
        Regulatory Reform Act of 1992 shall be used to reimburse the 
        Secretary of the Treasury for amounts borrowed under paragraph 
        (1).
            ``(3) Use of reserve fund.--If the net cost to the Federal 
        Government for the HOPE for Homeowners Program exceeds the 
        amount of funds received under paragraph (2), remaining debts 
        of the HOPE for Homeowners Program shall be paid from amounts 
        deposited into the fund established by the Secretary under 
        section 1337(e) of the Federal Housing Enterprises Financial 
        Safety and Soundness Act of 1992, remaining amounts in such 
        fund to be used to reduce the National debt.
            ``(4) Reduction of national debt.--Amounts collected under 
        the HOPE for Homeowners Program in accordance with subsections 
        (i) and (k) in excess of the net cost to the Federal Government 
        for such Program shall be used to reduce the National debt.''.

SEC. 1403. FIDUCIARY DUTY OF SERVICERS OF POOLED RESIDENTIAL MORTGAGE 
              LOANS.

    The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended by 
inserting after section 129 the following new section:

``SEC. 129A. FIDUCIARY DUTY OF SERVICERS OF POOLED RESIDENTIAL 
              MORTGAGES.

    ``(a) In General.--Except as may be established in any investment 
contract between a servicer of pooled residential mortgages and an 
investor, a servicer of pooled residential mortgages--
            ``(1) owes any duty to maximize the net present value of 
        the pooled mortgages in an investment to all investors and 
        parties having a direct or indirect interest in such 
        investment, not to any individual party or group of parties; 
        and
            ``(2) shall be deemed to act in the best interests of all 
        such investors and parties if the servicer agrees to or 
        implements a modification or workout plan, including any 
        modification or refinancing undertaken pursuant to the HOPE for 
        Homeowners Act of 2008, for a residential mortgage or a class 
        of residential mortgages that constitute a part or all of the 
        pooled mortgages in such investment, provided that any mortgage 
        so modified meets the following criteria:
                    ``(A) Default on the payment of such mortgage has 
                occurred or is reasonably foreseeable.
                    ``(B) The property securing such mortgage is 
                occupied by the mortgagor of such mortgage.
                    ``(C) The anticipated recovery on the principal 
                outstanding obligation of the mortgage under the 
                modification or workout plan exceeds, on a net present 
                value basis, the anticipated recovery on the principal 
                outstanding obligation of the mortgage through 
                foreclosure.
    ``(b) Definition.--As used in this section, the term `servicer' has 
the same meaning as in section 6(i)(2) of the Real Estate Settlement 
Procedures Act of 1974 (12 U.S.C. 2605(i)(2)).''.

SEC. 1404. REVISED STANDARDS FOR FHA APPRAISERS.

    Section 202(e) of the National Housing Act (12 U.S.C. 1708(e)) is 
amended by adding at the end the following:
            ``(5) Additional appraiser standards.--Beginning on the 
        date of enactment of the Federal Housing Finance Regulatory 
        Reform Act of 2008, any appraiser chosen or approved to conduct 
        appraisals for mortgages under this title shall--
                    ``(A) be certified--
                            ``(i) by the State in which the property to 
                        be appraised is located; or
                            ``(ii) by a nationally recognized 
                        professional appraisal organization; and
                    ``(B) have demonstrated verifiable education in the 
                appraisal requirements established by the Federal 
                Housing Administration under this subsection.''.

                TITLE V--S.A.F.E. MORTGAGE LICENSING ACT

SEC. 1501. SHORT TITLE.

    This title may be cited as the ``Secure and Fair Enforcement for 
Mortgage Licensing Act of 2008'' or ``S.A.F.E. Mortgage Licensing Act 
of 2008''.

SEC. 1502. PURPOSES AND METHODS FOR ESTABLISHING A MORTGAGE LICENSING 
              SYSTEM AND REGISTRY.

    In order to increase uniformity, reduce regulatory burden, enhance 
consumer protection, and reduce fraud, the States, through the 
Conference of State Bank Supervisors and the American Association of 
Residential Mortgage Regulators, are hereby encouraged to establish a 
Nationwide Mortgage Licensing System and Registry for the residential 
mortgage industry that accomplishes all of the following objectives:
            (1) Provides uniform license applications and reporting 
        requirements for State-licensed loan originators.
            (2) Provides a comprehensive licensing and supervisory 
        database.
            (3) Aggregates and improves the flow of information to and 
        between regulators.
            (4) Provides increased accountability and tracking of loan 
        originators.
            (5) Streamlines the licensing process and reduces the 
        regulatory burden.
            (6) Enhances consumer protections and supports anti-fraud 
        measures.
            (7) Provides consumers with easily accessible information, 
        offered at no charge, utilizing electronic media, including the 
        Internet, regarding the employment history of, and publicly 
        adjudicated disciplinary and enforcement actions against, loan 
        originators.
            (8) Establishes a means by which residential mortgage loan 
        originators would, to the greatest extent possible, be required 
        to act in the best interests of the consumer.
            (9) Facilitates responsible behavior in the subprime 
        mortgage market place and provides comprehensive training and 
        examination requirements related to subprime mortgage lending.
            (10) Facilitates the collection and disbursement of 
        consumer complaints on behalf of State and Federal mortgage 
        regulators.

SEC. 1503. DEFINITIONS.

    For purposes of this title, the following definitions shall apply:
            (1) Federal banking agencies.--The term ``Federal banking 
        agencies'' means the Board of Governors of the Federal Reserve 
        System, the Comptroller of the Currency, the Director of the 
        Office of Thrift Supervision, the National Credit Union 
        Administration, and the Federal Deposit Insurance Corporation.
            (2) Depository institution.--The term ``depository 
        institution'' has the same meaning as in section 3 of the 
        Federal Deposit Insurance Act, and includes any credit union.
            (3) Loan originator.--
                    (A) In general.--The term ``loan originator''--
                            (i) means an individual who--
                                    (I) takes a residential mortgage 
                                loan application; and
                                    (II) offers or negotiates terms of 
                                a residential mortgage loan for 
                                compensation or gain;
                            (ii) does not include any individual who is 
                        not otherwise described in clause (i) and who 
                        performs purely administrative or clerical 
                        tasks on behalf of a person who is described in 
                        any such clause;
                            (iii) does not include a person or entity 
                        that only performs real estate brokerage 
                        activities and is licensed or registered in 
                        accordance with applicable State law, unless 
                        the person or entity is compensated by a 
                        lender, a mortgage broker, or other loan 
                        originator or by any agent of such lender, 
                        mortgage broker, or other loan originator; and
                            (iv) does not include a person or entity 
                        solely involved in extensions of credit 
                        relating to timeshare plans, as that term is 
                        defined in section 101(53D) of title 11, United 
                        States Code.
                    (B) Other definitions relating to loan 
                originator.--For purposes of this subsection, an 
                individual ``assists a consumer in obtaining or 
                applying to obtain a residential mortgage loan'' by, 
                among other things, advising on loan terms (including 
                rates, fees, other costs), preparing loan packages, or 
                collecting information on behalf of the consumer with 
                regard to a residential mortgage loan.
                    (C) Administrative or clerical tasks.--The term 
                ``administrative or clerical tasks'' means the receipt, 
                collection, and distribution of information common for 
                the processing or underwriting of a loan in the 
                mortgage industry and communication with a consumer to 
                obtain information necessary for the processing or 
                underwriting of a residential mortgage loan.
                    (D) Real estate brokerage activity defined.--The 
                term ``real estate brokerage activity'' means any 
                activity that involves offering or providing real 
                estate brokerage services to the public, including--
                            (i) acting as a real estate agent or real 
                        estate broker for a buyer, seller, lessor, or 
                        lessee of real property;
                            (ii) bringing together parties interested 
                        in the sale, purchase, lease, rental, or 
                        exchange of real property;
                            (iii) negotiating, on behalf of any party, 
                        any portion of a contract relating to the sale, 
                        purchase, lease, rental, or exchange of real 
                        property (other than in connection with 
                        providing financing with respect to any such 
                        transaction);
                            (iv) engaging in any activity for which a 
                        person engaged in the activity is required to 
                        be registered or licensed as a real estate 
                        agent or real estate broker under any 
                        applicable law; and
                            (v) offering to engage in any activity, or 
                        act in any capacity, described in clause (i), 
                        (ii), (iii), or (iv).
            (4) Loan processor or underwriter.--
                    (A) In general.--The term ``loan processor or 
                underwriter'' means an individual who performs clerical 
                or support duties at the direction of and subject to 
                the supervision and instruction of--
                            (i) a State-licensed loan originator; or
                            (ii) a registered loan originator.
                    (B) Clerical or support duties.--For purposes of 
                subparagraph (A), the term ``clerical or support 
                duties'' may include--
                            (i) the receipt, collection, distribution, 
                        and analysis of information common for the 
                        processing or underwriting of a residential 
                        mortgage loan; and
                            (ii) communicating with a consumer to 
                        obtain the information necessary for the 
                        processing or underwriting of a loan, to the 
                        extent that such communication does not include 
                        offering or negotiating loan rates or terms, or 
                        counseling consumers about residential mortgage 
                        loan rates or terms.
            (5) Nationwide mortgage licensing system and registry.--The 
        term ``Nationwide Mortgage Licensing System and Registry'' 
        means a mortgage licensing system developed and maintained by 
        the Conference of State Bank Supervisors and the American 
        Association of Residential Mortgage Regulators for the State 
        licensing and registration of State-licensed loan originators 
        and the registration of registered loan originators or any 
        system established by the Secretary under section 1509.
            (6) Nontraditional mortgage product.--The term 
        ``nontraditional mortgage product'' means any mortgage product 
        other than a 30-year fixed rate mortgage.
            (7) Registered loan originator.--The term ``registered loan 
        originator'' means any individual who--
                    (A) meets the definition of loan originator and is 
                an employee of--
                            (i) a depository institution;
                            (ii) a subsidiary that is--
                                    (I) owned and controlled by a 
                                depository institution; and
                                    (II) regulated by a Federal banking 
                                agency; or
                            (iii) an institution regulated by the Farm 
                        Credit Administration; and
                    (B) is registered with, and maintains a unique 
                identifier through, the Nationwide Mortgage Licensing 
                System and Registry.
            (8) Residential mortgage loan.--The term ``residential 
        mortgage loan'' means any loan primarily for personal, family, 
        or household use that is secured by a mortgage, deed of trust, 
        or other equivalent consensual security interest on a dwelling 
        (as defined in section 103(v) of the Truth in Lending Act) or 
        residential real estate upon which is constructed or intended 
        to be constructed a dwelling (as so defined).
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (10) State-licensed loan originator.--The term ``State-
        licensed loan originator'' means any individual who--
                    (A) is a loan originator;
                    (B) is not an employee of--
                            (i) a depository institution;
                            (ii) a subsidiary that is--
                                    (I) owned and controlled by a 
                                depository institution; and
                                    (II) regulated by a Federal banking 
                                agency; or
                            (iii) an institution regulated by the Farm 
                        Credit Administration; and
                    (C) is licensed by a State or by the Secretary 
                under section 1508 and registered as a loan originator 
                with, and maintains a unique identifier through, the 
                Nationwide Mortgage Licensing System and Registry.
            (11) Unique identifier.--
                    (A) In general.--The term ``unique identifier'' 
                means a number or other identifier that--
                            (i) permanently identifies a loan 
                        originator;
                            (ii) is assigned by protocols established 
                        by the Nationwide Mortgage Licensing System and 
                        Registry and the Federal banking agencies to 
                        facilitate electronic tracking of loan 
                        originators and uniform identification of, and 
                        public access to, the employment history of and 
                        the publicly adjudicated disciplinary and 
                        enforcement actions against loan originators; 
                        and
                            (iii) shall not be used for purposes other 
                        than those set forth under this title.
                    (B) Responsibility of states.--To the greatest 
                extent possible and to accomplish the purpose of this 
                title, States shall use unique identifiers in lieu of 
                social security numbers.

SEC. 1504. LICENSE OR REGISTRATION REQUIRED.

    (a) In General.--An individual may not engage in the business of a 
loan originator without first--
            (1) obtaining, and maintaining annually--
                    (A) a registration as a registered loan originator; 
                or
                    (B) a license and registration as a State-licensed 
                loan originator; and
            (2) obtaining a unique identifier.
    (b) Loan Processors and Underwriters.--
            (1) Supervised loan processors and underwriters.--A loan 
        processor or underwriter who does not represent to the public, 
        through advertising or other means of communicating or 
        providing information (including the use of business cards, 
        stationery, brochures, signs, rate lists, or other promotional 
        items), that such individual can or will perform any of the 
        activities of a loan originator shall not be required to be a 
        State-licensed loan originator.
            (2) Independent contractors.--An independent contractor may 
        not engage in residential mortgage loan origination activities 
        as a loan processor or underwriter unless such independent 
        contractor is a State-licensed loan originator.

SEC. 1505. STATE LICENSE AND REGISTRATION APPLICATION AND ISSUANCE.

    (a) Background Checks.--In connection with an application to any 
State for licensing and registration as a State-licensed loan 
originator, the applicant shall, at a minimum, furnish to the 
Nationwide Mortgage Licensing System and Registry information 
concerning the applicant's identity, including--
            (1) fingerprints for submission to the Federal Bureau of 
        Investigation, and any governmental agency or entity authorized 
        to receive such information for a State and national criminal 
        history background check; and
            (2) personal history and experience, including 
        authorization for the System to obtain--
                    (A) an independent credit report obtained from a 
                consumer reporting agency described in section 603(p) 
                of the Fair Credit Reporting Act; and
                    (B) information related to any administrative, 
                civil or criminal findings by any governmental 
                jurisdiction.
    (b) Issuance of License.--The minimum standards for licensing and 
registration as a State-licensed loan originator shall include the 
following:
            (1) The applicant has never had a loan originator license 
        revoked in any governmental jurisdiction.
            (2) The applicant has not been convicted of, or pled guilty 
        or nolo contendere to, a felony in a domestic, foreign, or 
        military court--
                    (A) during the 7-year period preceding the date of 
                the application for licensing and registration; or
                    (B) at any time preceding such date of application, 
                if such felony involved an act of fraud, dishonesty, or 
                a breach of trust, or money laundering.
            (3) The applicant has demonstrated financial 
        responsibility, character, and general fitness such as to 
        command the confidence of the community and to warrant a 
        determination that the loan originator will operate honestly, 
        fairly, and efficiently within the purposes of this title.
            (4) The applicant has completed the pre-licensing education 
        requirement described in subsection (c).
            (5) The applicant has passed a written test that meets the 
        test requirement described in subsection (d).
            (6) The applicant has met either a net worth or surety bond 
        requirement, as required by the State pursuant to section 
        1508(d)(6).
    (c) Pre-Licensing Education of Loan Originators.--
            (1) Minimum educational requirements.--In order to meet the 
        pre-licensing education requirement referred to in subsection 
        (b)(4), a person shall complete at least 20 hours of education 
        approved in accordance with paragraph (2), which shall include 
        at least--
                    (A) 3 hours of Federal law and regulations;
                    (B) 3 hours of ethics, which shall include 
                instruction on fraud, consumer protection, and fair 
                lending issues; and
                    (C) 2 hours of training related to lending 
                standards for the nontraditional mortgage product 
                marketplace.
            (2) Approved educational courses.--For purposes of 
        paragraph (1), pre-licensing education courses shall be 
        reviewed, and approved by the Nationwide Mortgage Licensing 
        System and Registry.
            (3) Limitation and standards.--
                    (A) Limitation.--To maintain the independence of 
                the approval process, the Nationwide Mortgage Licensing 
                System and Registry shall not directly or indirectly 
                offer pre-licensure educational courses for loan 
                originators.
                    (B) Standards.--In approving courses under this 
                section, the Nationwide Mortgage Licensing System and 
                Registry shall apply reasonable standards in the review 
                and approval of courses.
    (d) Testing of Loan Originators.--
            (1) In general.--In order to meet the written test 
        requirement referred to in subsection (b)(5), an individual 
        shall pass, in accordance with the standards established under 
        this subsection, a qualified written test developed by the 
        Nationwide Mortgage Licensing System and Registry and 
        administered by an approved test provider.
            (2) Qualified test.--A written test shall not be treated as 
        a qualified written test for purposes of paragraph (1) unless 
        the test adequately measures the applicant's knowledge and 
        comprehension in appropriate subject areas, including--
                    (A) ethics;
                    (B) Federal law and regulation pertaining to 
                mortgage origination;
                    (C) State law and regulation pertaining to mortgage 
                origination;
                    (D) Federal and State law and regulation, including 
                instruction on fraud, consumer protection, the 
                nontraditional mortgage marketplace, and fair lending 
                issues.
            (3) Minimum competence.--
                    (A) Passing score.--An individual shall not be 
                considered to have passed a qualified written test 
                unless the individual achieves a test score of not less 
                than 75 percent correct answers to questions.
                    (B) Initial retests.--An individual may retake a 
                test 3 consecutive times with each consecutive taking 
                occurring at least 30 days after the preceding test.
                    (C) Subsequent retests.--After failing 3 
                consecutive tests, an individual shall wait at least 6 
                months before taking the test again.
                    (D) Retest after lapse of license.--A State-
                licensed loan originator who fails to maintain a valid 
                license for a period of 5 years or longer shall retake 
                the test, not taking into account any time during which 
                such individual is a registered loan originator.
    (e) Mortgage Call Reports.--Each mortgage licensee shall submit to 
the Nationwide Mortgage Licensing System and Registry reports of 
condition, which shall be in such form and shall contain such 
information as the Nationwide Mortgage Licensing System and Registry 
may require.

SEC. 1506. STANDARDS FOR STATE LICENSE RENEWAL.

    (a) In General.--The minimum standards for license renewal for 
State-licensed loan originators shall include the following:
            (1) The loan originator continues to meet the minimum 
        standards for license issuance.
            (2) The loan originator has satisfied the annual continuing 
        education requirements described in subsection (b).
    (b) Continuing Education for State-Licensed Loan Originators.--
            (1) In general.--In order to meet the annual continuing 
        education requirements referred to in subsection (a)(2), a 
        State-licensed loan originator shall complete at least 8 hours 
        of education approved in accordance with paragraph (2), which 
        shall include at least--
                    (A) 3 hours of Federal law and regulations;
                    (B) 2 hours of ethics, which shall include 
                instruction on fraud, consumer protection, and fair 
                lending issues; and
                    (C) 2 hours of training related to lending 
                standards for the nontraditional mortgage product 
                marketplace.
            (2) Approved educational courses.--For purposes of 
        paragraph (1), continuing education courses shall be reviewed, 
        and approved by the Nationwide Mortgage Licensing System and 
        Registry.
            (3) Calculation of continuing education credits.--A State-
        licensed loan originator--
                    (A) may only receive credit for a continuing 
                education course in the year in which the course is 
                taken; and
                    (B) may not take the same approved course in the 
                same or successive years to meet the annual 
                requirements for continuing education.
            (4) Instructor credit.--A State-licensed loan originator 
        who is approved as an instructor of an approved continuing 
        education course may receive credit for the originator's own 
        annual continuing education requirement at the rate of 2 hours 
        credit for every 1 hour taught.
            (5) Limitation and standards.--
                    (A) Limitation.--To maintain the independence of 
                the approval process, the Nationwide Mortgage Licensing 
                System and Registry shall not directly or indirectly 
                offer any continuing education courses for loan 
                originators.
                    (B) Standards.--In approving courses under this 
                section, the Nationwide Mortgage Licensing System and 
                Registry shall apply reasonable standards in the review 
                and approval of courses.

SEC. 1507. SYSTEM OF REGISTRATION ADMINISTRATION BY FEDERAL AGENCIES.

    (a) Development.--
            (1) In general.--The Federal banking agencies shall 
        jointly, through the Federal Financial Institutions Examination 
        Council, and together with the Farm Credit Administration, 
        develop and maintain a system for registering employees of a 
        depository institution, employees of a subsidiary that is owned 
        and controlled by a depository institution and regulated by a 
        Federal banking agency, or employees of an institution 
        regulated by the Farm Credit Administration, as registered loan 
        originators with the Nationwide Mortgage Licensing System and 
        Registry. The system shall be implemented before the end of the 
        1-year period beginning on the date of enactment of this title.
            (2) Registration requirements.--In connection with the 
        registration of any loan originator under this subsection, the 
        appropriate Federal banking agency and the Farm Credit 
        Administration shall, at a minimum, furnish or cause to be 
        furnished to the Nationwide Mortgage Licensing System and 
        Registry information concerning the employees's identity, 
        including--
                    (A) fingerprints for submission to the Federal 
                Bureau of Investigation, and any governmental agency or 
                entity authorized to receive such information for a 
                State and national criminal history background check; 
                and
                    (B) personal history and experience, including 
                authorization for the Nationwide Mortgage Licensing 
                System and Registry to obtain information related to 
                any administrative, civil or criminal findings by any 
                governmental jurisdiction.
    (b) Coordination.--
            (1) Unique identifier.--The Federal banking agencies, 
        through the Financial Institutions Examination Council, and the 
        Farm Credit Administration shall coordinate with the Nationwide 
        Mortgage Licensing System and Registry to establish protocols 
        for assigning a unique identifier to each registered loan 
        originator that will facilitate electronic tracking and uniform 
        identification of, and public access to, the employment history 
        of and publicly adjudicated disciplinary and enforcement 
        actions against loan originators.
            (2) Nationwide mortgage licensing system and registry 
        development.--To facilitate the transfer of information 
        required by subsection (a)(2), the Nationwide Mortgage 
        Licensing System and Registry shall coordinate with the Federal 
        banking agencies, through the Financial Institutions 
        Examination Council, and the Farm Credit Administration 
        concerning the development and operation, by such System and 
        Registry, of the registration functionality and data 
        requirements for loan originators.
    (c) Consideration of Factors and Procedures.--In establishing the 
registration procedures under subsection (a) and the protocols for 
assigning a unique identifier to a registered loan originator, the 
Federal banking agencies shall make such de minimis exceptions as may 
be appropriate to paragraphs (1)(A) and (2) of section 1504(a), shall 
make reasonable efforts to utilize existing information to minimize the 
burden of registering loan originators, and shall consider methods for 
automating the process to the greatest extent practicable consistent 
with the purposes of this title.

SEC. 1508. SECRETARY OF HOUSING AND URBAN DEVELOPMENT BACKUP AUTHORITY 
              TO ESTABLISH A LOAN ORIGINATOR LICENSING SYSTEM.

    (a) Backup Licensing System.--If, by the end of the 1-year period, 
or the 2-year period in the case of a State whose legislature meets 
only biennially, beginning on the date of the enactment of this title 
or at any time thereafter, the Secretary determines that a State does 
not have in place by law or regulation a system for licensing and 
registering loan originators that meets the requirements of sections 
1505 and 1506 and subsection (d) of this section, or does not 
participate in the Nationwide Mortgage Licensing System and Registry, 
the Secretary shall provide for the establishment and maintenance of a 
system for the licensing and registration by the Secretary of loan 
originators operating in such State as State-licensed loan originators.
    (b) Licensing and Registration Requirements.--The system 
established by the Secretary under subsection (a) for any State shall 
meet the requirements of sections 1505 and 1506 for State-licensed loan 
originators.
    (c) Unique Identifier.--The Secretary shall coordinate with the 
Nationwide Mortgage Licensing System and Registry to establish 
protocols for assigning a unique identifier to each loan originator 
licensed by the Secretary as a State-licensed loan originator that will 
facilitate electronic tracking and uniform identification of, and 
public access to, the employment history of and the publicly 
adjudicated disciplinary and enforcement actions against loan 
originators.
    (d) State Licensing Law Requirements.--For purposes of this 
section, the law in effect in a State meets the requirements of this 
subsection if the Secretary determines the law satisfies the following 
minimum requirements:
            (1) A State loan originator supervisory authority is 
        maintained to provide effective supervision and enforcement of 
        such law, including the suspension, termination, or nonrenewal 
        of a license for a violation of State or Federal law.
            (2) The State loan originator supervisory authority ensures 
        that all State-licensed loan originators operating in the State 
        are registered with Nationwide Mortgage Licensing System and 
        Registry.
            (3) The State loan originator supervisory authority is 
        required to regularly report violations of such law, as well as 
        enforcement actions and other relevant information, to the 
        Nationwide Mortgage Licensing System and Registry.
            (4) The State loan originator supervisory authority has a 
        process in place for challenging information contained in the 
        Nationwide Mortgage Licensing System and Registry.
            (5) The State loan originator supervisory authority has 
        established a mechanism to assess civil money penalties for 
        individuals acting as mortgage originators in their State 
        without a valid license or registration.
            (6) The State loan originator supervisory authority has 
        established minimum net worth or surety bonding requirements 
        that reflect the dollar amount of loans originated by a 
        residential mortgage loan originator.
    (e) Temporary Extension of Period.--The Secretary may extend, by 
not more than 24 months, the 1-year or 2-year period, as the case may 
be, referred to in subsection (a) for the licensing of loan originators 
in any State under a State licensing law that meets the requirements of 
sections 1505 and 1506 and subsection (d) if the Secretary determines 
that such State is making a good faith effort to establish a State 
licensing law that meets such requirements, license mortgage 
originators under such law, and register such originators with the 
Nationwide Mortgage Licensing System and Registry.
    (f) Contracting Authority.--The Secretary may enter into contracts 
with qualified independent parties, as necessary to efficiently fulfill 
the obligations of the Secretary under this section.

SEC. 1509. BACKUP AUTHORITY TO ESTABLISH A NATIONWIDE MORTGAGE 
              LICENSING AND REGISTRY SYSTEM.

    If at any time the Secretary determines that the Nationwide 
Mortgage Licensing System and Registry is failing to meet the 
requirements and purposes of this title for a comprehensive licensing, 
supervisory, and tracking system for loan originators, the Secretary 
shall establish and maintain such a system to carry out the purposes of 
this title and the effective registration and regulation of loan 
originators.

SEC. 1510. FEES.

    The Federal banking agencies, the Farm Credit Administration, the 
Secretary, and the Nationwide Mortgage Licensing System and Registry 
may charge reasonable fees to cover the costs of maintaining and 
providing access to information from the Nationwide Mortgage Licensing 
System and Registry, to the extent that such fees are not charged to 
consumers for access to such system and registry.

SEC. 1511. BACKGROUND CHECKS OF LOAN ORIGINATORS.

    (a) Access to Records.--Notwithstanding any other provision of law, 
in providing identification and processing functions, the Attorney 
General shall provide access to all criminal history information to the 
appropriate State officials responsible for regulating State-licensed 
loan originators to the extent criminal history background checks are 
required under the laws of the State for the licensing of such loan 
originators.
    (b) Agent.--For the purposes of this section and in order to reduce 
the points of contact which the Federal Bureau of Investigation may 
have to maintain for purposes of subsection (a), the Conference of 
State Bank Supervisors or a wholly owned subsidiary may be used as a 
channeling agent of the States for requesting and distributing 
information between the Department of Justice and the appropriate State 
agencies.

SEC. 1512. CONFIDENTIALITY OF INFORMATION.

    (a) System Confidentiality.--Except as otherwise provided in this 
section, any requirement under Federal or State law regarding the 
privacy or confidentiality of any information or material provided to 
the Nationwide Mortgage Licensing System and Registry or a system 
established by the Secretary under section 1509, and any privilege 
arising under Federal or State law (including the rules of any Federal 
or State court) with respect to such information or material, shall 
continue to apply to such information or material after the information 
or material has been disclosed to the system. Such information and 
material may be shared with all State and Federal regulatory officials 
with mortgage industry oversight authority without the loss of 
privilege or the loss of confidentiality protections provided by 
Federal and State laws.
    (b) Nonapplicability of Certain Requirements.--Information or 
material that is subject to a privilege or confidentiality under 
subsection (a) shall not be subject to--
            (1) disclosure under any Federal or State law governing the 
        disclosure to the public of information held by an officer or 
        an agency of the Federal Government or the respective State; or
            (2) subpoena or discovery, or admission into evidence, in 
        any private civil action or administrative process, unless with 
        respect to any privilege held by the Nationwide Mortgage 
        Licensing System and Registry or the Secretary with respect to 
        such information or material, the person to whom such 
        information or material pertains waives, in whole or in part, 
        in the discretion of such person, that privilege.
    (c) Coordination With Other Law.--Any State law, including any 
State open record law, relating to the disclosure of confidential 
supervisory information or any information or material described in 
subsection (a) that is inconsistent with subsection (a) shall be 
superseded by the requirements of such provision to the extent State 
law provides less confidentiality or a weaker privilege.
    (d) Public Access to Information.--This section shall not apply 
with respect to the information or material relating to the employment 
history of, and publicly adjudicated disciplinary and enforcement 
actions against, loan originators that is included in Nationwide 
Mortgage Licensing System and Registry for access by the public.

SEC. 1513. LIABILITY PROVISIONS.

    The Secretary, any State official or agency, any Federal banking 
agency, or any organization serving as the administrator of the 
Nationwide Mortgage Licensing System and Registry or a system 
established by the Secretary under section 1509, or any officer or 
employee of any such entity, shall not be subject to any civil action 
or proceeding for monetary damages by reason of the good faith action 
or omission of any officer or employee of any such entity, while acting 
within the scope of office or employment, relating to the collection, 
furnishing, or dissemination of information concerning persons who are 
loan originators or are applying for licensing or registration as loan 
originators.

SEC. 1514. ENFORCEMENT UNDER HUD BACKUP LICENSING SYSTEM.

    (a) Summons Authority.--The Secretary may--
            (1) examine any books, papers, records, or other data of 
        any loan originator operating in any State which is subject to 
        a licensing system established by the Secretary under section 
        1508; and
            (2) summon any loan originator referred to in paragraph (1) 
        or any person having possession, custody, or care of the 
        reports and records relating to such loan originator, to appear 
        before the Secretary or any delegate of the Secretary at a time 
        and place named in the summons and to produce such books, 
        papers, records, or other data, and to give testimony, under 
        oath, as may be relevant or material to an investigation of 
        such loan originator for compliance with the requirements of 
        this title.
    (b) Examination Authority.--
            (1) In general.--If the Secretary establishes a licensing 
        system under section 1508 for any State, the Secretary shall 
        appoint examiners for the purposes of administering such 
        section.
            (2) Power to examine.--Any examiner appointed under 
        paragraph (1) shall have power, on behalf of the Secretary, to 
        make any examination of any loan originator operating in any 
        State which is subject to a licensing system established by the 
        Secretary under section 1508 whenever the Secretary determines 
        an examination of any loan originator is necessary to determine 
        the compliance by the originator with this title.
            (3) Report of examination.--Each examiner appointed under 
        paragraph (1) shall make a full and detailed report of 
        examination of any loan originator examined to the Secretary.
            (4) Administration of oaths and affirmations; evidence.--In 
        connection with examinations of loan originators operating in 
        any State which is subject to a licensing system established by 
        the Secretary under section 1508, or with other types of 
        investigations to determine compliance with applicable law and 
        regulations, the Secretary and examiners appointed by the 
        Secretary may administer oaths and affirmations and examine and 
        take and preserve testimony under oath as to any matter in 
        respect to the affairs of any such loan originator.
            (5) Assessments.--The cost of conducting any examination of 
        any loan originator operating in any State which is subject to 
        a licensing system established by the Secretary under section 
        1508 shall be assessed by the Secretary against the loan 
        originator to meet the Secretary's expenses in carrying out 
        such examination.
    (c) Cease and Desist Proceeding.--
            (1) Authority of secretary.--If the Secretary finds, after 
        notice and opportunity for hearing, that any person is 
        violating, has violated, or is about to violate any provision 
        of this title, or any regulation thereunder, with respect to a 
        State which is subject to a licensing system established by the 
        Secretary under section 1508, the Secretary may publish such 
        findings and enter an order requiring such person, and any 
        other person that is, was, or would be a cause of the 
        violation, due to an act or omission the person knew or should 
        have known would contribute to such violation, to cease and 
        desist from committing or causing such violation and any future 
        violation of the same provision, rule, or regulation. Such 
        order may, in addition to requiring a person to cease and 
        desist from committing or causing a violation, require such 
        person to comply, or to take steps to effect compliance, with 
        such provision or regulation, upon such terms and conditions 
        and within such time as the Secretary may specify in such 
        order. Any such order may, as the Secretary deems appropriate, 
        require future compliance or steps to effect future compliance, 
        either permanently or for such period of time as the Secretary 
        may specify, with such provision or regulation with respect to 
        any loan originator.
            (2) Hearing.--The notice instituting proceedings pursuant 
        to paragraph (1) shall fix a hearing date not earlier than 30 
        days nor later than 60 days after service of the notice unless 
        an earlier or a later date is set by the Secretary with the 
        consent of any respondent so served.
            (3) Temporary order.--Whenever the Secretary determines 
        that the alleged violation or threatened violation specified in 
        the notice instituting proceedings pursuant to paragraph (1), 
        or the continuation thereof, is likely to result in significant 
        dissipation or conversion of assets, significant harm to 
        consumers, or substantial harm to the public interest prior to 
        the completion of the proceedings, the Secretary may enter a 
        temporary order requiring the respondent to cease and desist 
        from the violation or threatened violation and to take such 
        action to prevent the violation or threatened violation and to 
        prevent dissipation or conversion of assets, significant harm 
        to consumers, or substantial harm to the public interest as the 
        Secretary deems appropriate pending completion of such 
        proceedings. Such an order shall be entered only after notice 
        and opportunity for a hearing, unless the Secretary determines 
        that notice and hearing prior to entry would be impracticable 
        or contrary to the public interest. A temporary order shall 
        become effective upon service upon the respondent and, unless 
        set aside, limited, or suspended by the Secretary or a court of 
        competent jurisdiction, shall remain effective and enforceable 
        pending the completion of the proceedings.
            (4) Review of temporary orders.--
                    (A) Review by secretary.--At any time after the 
                respondent has been served with a temporary cease and 
                desist order pursuant to paragraph (3), the respondent 
                may apply to the Secretary to have the order set aside, 
                limited, or suspended. If the respondent has been 
                served with a temporary cease and desist order entered 
                without a prior hearing before the Secretary, the 
                respondent may, within 10 days after the date on which 
                the order was served, request a hearing on such 
                application and the Secretary shall hold a hearing and 
                render a decision on such application at the earliest 
                possible time.
                    (B) Judicial review.--Within--
                            (i) 10 days after the date the respondent 
                        was served with a temporary cease and desist 
                        order entered with a prior hearing before the 
                        Secretary; or
                            (ii) 10 days after the Secretary renders a 
                        decision on an application and hearing under 
                        paragraph (1), with respect to any temporary 
                        cease and desist order entered without a prior 
                        hearing before the Secretary,
                the respondent may apply to the United States district 
                court for the district in which the respondent resides 
                or has its principal place of business, or for the 
                District of Columbia, for an order setting aside, 
                limiting, or suspending the effectiveness or 
                enforcement of the order, and the court shall have 
                jurisdiction to enter such an order. A respondent 
                served with a temporary cease and desist order entered 
                without a prior hearing before the Secretary may not 
                apply to the court except after hearing and decision by 
                the Secretary on the respondent's application under 
                subparagraph (A).
                    (C) No automatic stay of temporary order.--The 
                commencement of proceedings under subparagraph (B) 
                shall not, unless specifically ordered by the court, 
                operate as a stay of the Secretary's order.
            (5) Authority of the secretary to prohibit persons from 
        serving as loan originators.--In any cease and desist 
        proceeding under paragraph (1), the Secretary may issue an 
        order to prohibit, conditionally or unconditionally, and 
        permanently or for such period of time as the Secretary shall 
        determine, any person who has violated this title or 
        regulations thereunder, from acting as a loan originator if the 
        conduct of that person demonstrates unfitness to serve as a 
        loan originator.
    (d) Authority of the Secretary To Assess Money Penalties.--
            (1) In general.--The Secretary may impose a civil penalty 
        on a loan originator operating in any State which is subject to 
        a licensing system established by the Secretary under section 
        1508, if the Secretary finds, on the record after notice and 
        opportunity for hearing, that such loan originator has violated 
        or failed to comply with any requirement of this title or any 
        regulation prescribed by the Secretary under this title or 
        order issued under subsection (c).
            (2) Maximum amount of penalty.--The maximum amount of 
        penalty for each act or omission described in paragraph (1) 
        shall be $25,000.

SEC. 1515. STATE EXAMINATION AUTHORITY.

    In addition to any authority allowed under State law a State 
licensing agency shall have the authority to conduct investigations and 
examinations as follows:
            (1) For the purposes of investigating violations or 
        complaints arising under this title, or for the purposes of 
        examination, the State licensing agency may review, 
        investigate, or examine any loan originator licensed or 
        required to be licensed under this title, as often as necessary 
        in order to carry out the purposes of this title.
            (2) Each such loan originator shall make available upon 
        request to the State licensing agency the books and records 
        relating to the operations of such originator. The State 
        licensing agency may have access to such books and records and 
        interview the officers, principals, loan originators, 
        employees, independent contractors, agents, and customers of 
        the licensee concerning their business.
            (3) The authority of this section shall remain in effect, 
        whether such a loan originator acts or claims to act under any 
        licensing or registration law of such State, or claims to act 
        without such authority.
            (4) No person subject to investigation or examination under 
        this section may knowingly withhold, abstract, remove, 
        mutilate, destroy, or secrete any books, records, computer 
        records, or other information.

SEC. 1516. REPORTS AND RECOMMENDATIONS TO CONGRESS.

    (a) Annual Reports.--Not later than 1 year after the date of 
enactment of this title, and annually thereafter, the Secretary shall 
submit a report to Congress on the effectiveness of the provisions of 
this title, including legislative recommendations, if any, for 
strengthening consumer protections, enhancing examination standards, 
streamlining communication between all stakeholders involved in 
residential mortgage loan origination and processing, and establishing 
performance based bonding requirements for mortgage originators or 
institutions that employ such brokers.
    (b) Legislative Recommendations.--Not later than 6 months after the 
date of enactment of this title, the Secretary shall make 
recommendations to Congress on legislative reforms to the Real Estate 
Settlement Procedures Act of 1974, that the Secretary deems appropriate 
to promote more transparent disclosures, allowing consumers to better 
shop and compare mortgage loan terms and settlement costs.

SEC. 1517. STUDY AND REPORTS ON DEFAULTS AND FORECLOSURES.

    (a) Study Required.--The Secretary shall conduct an extensive study 
of the root causes of default and foreclosure of home loans, using as 
much empirical data as is available.
    (b) Preliminary Report to Congress.--Not later than 6 months after 
the date of enactment of this title, the Secretary shall submit to 
Congress a preliminary report regarding the study required by this 
section.
    (c) Final Report to Congress.--Not later than 12 months after the 
date of enactment of this title, the Secretary shall submit to Congress 
a final report regarding the results of the study required by this 
section, which shall include any recommended legislation relating to 
the study, and recommendations for best practices and for a process to 
provide targeted assistance to populations with the highest risk of 
potential default or foreclosure.

                        TITLE VI--MISCELLANEOUS

SEC. 1601. STUDY AND REPORTS ON GUARANTEE FEES.

    (a) Ongoing Study of Fees.--The Director shall conduct an ongoing 
study of fees charged by enterprises for guaranteeing a mortgage.
    (b) Collection of Data.--The Director shall, by regulation or 
order, establish procedures for the collection of data from enterprises 
for purposes of this subsection, including the format and the process 
for collection of such data.
    (c) Reports to Congress.--The Director shall annually submit a 
report to Congress on the results of the study conducted under 
subsection (a), based on the aggregated data collected under subsection 
(a) for the subject year, regarding the amount of such fees and the 
criteria used by the enterprises to determine such fees.
    (d) Contents of Reports.--The reports required under subsection (c) 
shall identify and analyze--
            (1) the factors considered in determining the amount of the 
        guarantee fees charged;
            (2) the total revenue earned by the enterprises 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 any increase or decrease in guarantee 
        fees from the preceding year;
            (6) a breakdown of the revenue and costs associated with 
        providing guarantees, based on product type and risk 
        classifications; and
            (7) a breakdown of guarantee fees charged based on asset 
        size of the originator and the number of loans sold or 
        transferred to an enterprise.
    (e) Protection of Information.--Nothing in this section may be 
construed to require or authorize the Director to publicly disclose 
information that is confidential or proprietary.

SEC. 1602. STUDY AND REPORT ON DEFAULT RISK EVALUATION.

    (a) Study.--The Director shall conduct a study of ways to improve 
the overall default risk evaluation used with respect to residential 
mortgage loans. Particular attention shall be paid to the development 
and utilization of processes and technologies that provide a means to 
standardize the measurement of risk.
    (b) Report.--The Director shall submit a report on the study 
conducted under this section to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee on Financial Services of 
the House of Representatives, not later than 1 year after the date of 
enactment of this Act.

SEC. 1603. CONVERSION OF HUD CONTRACTS.

    (a) In General.--Notwithstanding any other provision of law, the 
Secretary may, at the request of an owner of a multifamily housing 
project that exceeds 5,000 units to which a contract for project-based 
rental assistance under section 8 of the United States Housing Act of 
1937 (``Act'') (42 U.S.C. 1437f) and a Rental Assistance Payment 
contract is subject, convert such contracts to a contract for project-
based rental assistance under section 8 of the Act.
    (b) Initial Renewal.--
            (1) At the request of an owner under subsection (a) 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) (``MAHRA'') (42 U.S.C. 1437f note).
            (2) A request by an 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 an 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.--To the extent that assisted dwelling units, 
subject to the resulting contract under subsection (a), serve low-
income families, as defined in section 3(b)(2) of the Act (42 U.S.C. 
1437a(b)(2)) the units shall be considered to be in compliance with all 
income targeting requirements under the Act (42 U.S.C. 1437 et seq).
    (e) Tenant Eligibility.--Notwithstanding any other provision of 
law, each family residing in an assisted dwelling unit on the date of 
conversion of a contract 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 ``Secretary'' means the Secretary of Housing 
        and Urban Development;
            (2) the term ``conversion'' means the action under which a 
        contract for project-based rental assistance under section 8 of 
        the Act and a Rental Assistance Payment contract become a 
        contract for project-based rental assistance under section 8 of 
        the Act (42 U.S.C. 1437f) pursuant to subsection (a);
            (3) the term ``resulting contract'' means the new contract 
        after a conversion pursuant to subsection (a); and
            (4) the term ``assisted dwelling unit'' means a dwelling 
        unit in a multifamily housing project that exceeds 5,000 units 
        that, on the date of conversion of a contract under this 
        section, is subject to a contract for project-based rental 
        assistance under section 8 of the Act (42 U.S.C. 1437f) or a 
        Rental Assistance Payment contract.

SEC. 1604. BRIDGE DEPOSITORY INSTITUTIONS.

    (a) In General.--Section 11 of the Federal Deposit Insurance Act 
(12 U.S.C. 1821) is amended--
            (1) in subsection (d)(2)--
                    (A) in subsection (F), by striking ``as receiver'' 
                and all that follows through clause (ii) and inserting 
                the following: ``as receiver, with respect to any 
                insured depository institution, organize a new 
                depository institution under subsection (m) or a bridge 
                depository institution under subsection (n).'';
                    (B) in subparagraph (G), by striking ``new bank or 
                a bridge bank'' and inserting ``new depository 
                institution or a bridge depository institution'';
            (2) in subsection (e)(10)(C), by striking ``bridge bank'' 
        each place that term appears and inserting ``bridge depository 
        institution'';
            (3) in subsection (m)--
                    (A) in the subsection heading, by striking 
                ``Banks'' and inserting ``Depository Institutions'';
                    (B) by striking ``new bank'' each place that term 
                appears and inserting ``new depository institution'';
                    (C) by striking ``such bank'' each place that term 
                appears and inserting ``such depository institution'';
                    (D) in paragraph (1), by inserting ``or Federal 
                savings association'' after ``national bank'';
                    (E) in paragraph (6), by striking ``only bank'' and 
                inserting ``only depository institution'';
                    (F) in paragraph (9), by inserting ``or the 
                Director of the Office of Thrift Supervision, as 
                appropriate'' after ``Comptroller of the Currency'';
                    (G) in paragraph (15), by striking ``, but in no 
                event'' and all that follows through ``located'';
                    (H) in paragraph (16)--
                            (i) by inserting ``or the Director of the 
                        Office of Thrift Supervision, as appropriate,'' 
                        after ``Comptroller of the Currency'' each 
                        place that term appears;
                            (ii) by striking ``the bank'' each place 
                        that term appears and inserting ``the 
                        depository institution'';
                            (iii) by inserting ``or Federal savings 
                        association'' after ``national bank'' each 
                        place that term appears;
                            (iv) by inserting ``or Federal savings 
                        associations'' after ``national banks''; and
                            (v) by striking ``Such bank'' and inserting 
                        ``Such depository institution''; and
                    (I) in paragraph (18), by inserting ``or the 
                Director of the Office of Thrift Supervision, as 
                appropriate,'' after ``Comptroller of the Currency'' 
                each place that term appears;
            (4) in subsection (n)--
                    (A) in the subsection heading, by striking 
                ``Banks'' and inserting ``Depository Institutions'';
                    (B) by striking ``bridge bank'' each place that 
                term appears and inserting ``bridge depository 
                institution'';
                    (C) by striking ``bridge banks'' each place that 
                term appears (other than in paragraph (1)(A) and 
                inserting ``bridge depository institutions'';
                    (D) by striking ``bridge bank's'' each place that 
                term appears and inserting ``bridge depository 
                institutions'';
                    (E) by striking ``insured bank'' each place that 
                term appears and inserting ``insured depository 
                institution'';
                    (F) by striking ``insured banks'' each place that 
                term appears and inserting ``insured depository 
                institutions'';
                    (G) by striking ``such bank'' each place that term 
                appears (other than in paragraph (4)(J)) and inserting 
                ``such depository institution'';
                    (H) by striking ``the bank'' each place that term 
                appears and inserting ``the depository institution'';
                    (I) in paragraph (1)(A)--
                            (i) by inserting ``, with respect to 1 or 
                        more insured banks, or the Director of the 
                        Office of Thrift Supervision, with respect to 1 
                        or more insured savings associations,'' after 
                        ``Comptroller of the Currency'';
                            (ii) by inserting ``or Federal savings 
                        associations, as appropriate,'' after 
                        ``national banks'';
                            (iii) by inserting ``or Federal savings 
                        associations, as applicable,'' after ``banking 
                        associations''; and
                            (iv) by striking ``as bridge banks'' and 
                        inserting ``as `bridge depository 
                        institutions''';
                    (J) in paragraph (1)(B)--
                            (i) by striking ``bank or banks'' each 
                        place that term appears and inserting 
                        ``depository institution or institutions'';
                            (ii) by striking ``of a bank''; and
                            (iii) by striking ``of that bank'';
                    (K) in paragraph (1)(E), by inserting before the 
                period ``, in the case of 1 or more insured banks, and 
                as a Federal savings association, in the case of 1 or 
                more insured savings associations'';
                    (L) in paragraph (2)--
                            (i) in subparagraph by inserting ``or 
                        Federal savings association'' after ``national 
                        bank'' each place that term appears; and
                            (ii) by inserting ``or the Director of the 
                        Office of Thrift Supervision'' after 
                        ``Comptroller of the Currency'';
                    (M) in paragraph (4)--
                            (i) in subparagraph (C), by striking 
                        ``under section 5138 of the Revised Statutes or 
                        any other'' and inserting ``under any'';
                            (ii) by inserting ``and the Director of the 
                        Office of Thrift Supervision, as appropriate,'' 
                        after ``Comptroller of the Currency'' each 
                        place that term appears;
                            (iii) in subparagraph (D), by striking 
                        ``bank's'' and inserting ``depository 
                        institution's''; and
                            (iv) in subparagraph (F), by inserting 
                        before the period ``or Federal home loan 
                        bank'';
                    (N) in paragraph (8)--
                            (i) in subparagraph (A), by striking ``the 
                        banks'' and inserting ``the depository 
                        institutions'';
                            (ii) in subparagraph (B), by striking 
                        ``bank's'' and inserting ``depository 
                        institution's'';
                    (O) in paragraph (11), by inserting ``or a Federal 
                savings association, as the case may be,'' after 
                ``national bank'' each place that term appears;
                    (P) in paragraph (12)--
                            (i) by inserting ``or the Director of the 
                        Office of Thrift Supervision, as appropriate,'' 
                        after ``Comptroller of the Currency'' each 
                        place that term appears; and
                            (ii) by inserting ``or Federal savings 
                        associations, as appropriate'' after ``national 
                        banks''; and
                    (Q) in paragraph (13), by striking ``single bank'' 
                and inserting ``single depository institution''.
    (b) Other Conforming Amendments.--
            (1) Federal deposit insurance act.--The Federal Deposit 
        Insurance Act (12 U.S.C. 1811 et seq.) is amended--
                    (A) in section 3 (12 U.S.C. 1813), by striking 
                subsection (i) and inserting the following:
    ``(i) New Depository Institution and Bridge Depository Institution 
Defined.--
            ``(1) New depository institution.--The term `new depository 
        institution' means a new national bank or Federal savings 
        association, other than a bridge depository institution, 
        organized by the Corporation in accordance with section 11(m).
            ``(2) Bridge depository institution.--The term `bridge 
        depository institution' means a new national bank or Federal 
        savings association organized by the Corporation in accordance 
        with section 11(n).'';
                    (B) in section 10(d)(5)(B) (12 U.S.C. 
                1820(d)(5)(B)), by striking ``bridge bank'' and 
                inserting ``bridge depository institution'';
                    (C) in section 12 (12 U.S.C. 1822), by striking 
                ``new bank'' each place that term appears and inserting 
                ``new depository institution'';and
                    (D) in section 38(j)(2) (12 U.S.C. 1831o(j)(2)), by 
                striking ``bridge bank'' and inserting ``bridge 
                depository institution''.
            (2) Federal credit union act.--Section 207(c)(10)(C)(i) of 
        the Federal Credit Union Act (12 U.S.C. 1787(c)(10)(C)(i)) is 
        amended by striking ``bridge bank'' and inserting ``bridge 
        depository institution''.
            (3) Title 11.--Section 783 of title 11, United States Code, 
        is amended by striking ``bridge bank'' and inserting ``bridge 
        depository institution''.
            (4) Title 26.--Section 414(l)(2)(G) of the Internal Revenue 
        Code of 1986, is amended by striking ``bridge bank'' and 
        inserting ``bridge depository institution''.

SEC. 1605. SENSE OF THE SENATE.

    It is the sense of the Senate that in implementing or carrying out 
any provision of this Act, or any amendment made by this Act, the 
Senate supports a policy of noninterference regarding local government 
requirements that the holder of a foreclosed property maintain that 
property.

                   DIVISION B--FORECLOSURE PREVENTION

SECTION 2001. SHORT TITLE.

    This division may be cited as the ``Foreclosure Prevention Act of 
2008''.

SEC. 2002. EMERGENCY DESIGNATION.

    For purposes of Senate enforcement, all provisions of this division 
are designated as emergency requirements and necessary to meet 
emergency needs pursuant to section 204 of S. Con. Res. 21 (110th 
Congress), the concurrent resolution on the budget for fiscal year 
2008.

                 TITLE I--FHA MODERNIZATION ACT OF 2008

SEC. 2101. SHORT TITLE.

    This title may be cited as the ``FHA Modernization Act of 2008''.

              Subtitle A--Building American Homeownership

SEC. 2111. SHORT TITLE.

    This subtitle may be cited as the ``Building American Homeownership 
Act of 2008''.

SEC. 2112. MAXIMUM PRINCIPAL LOAN OBLIGATION.

    (a) In General.--Paragraph (2) of section 203(b)(2) of the National 
Housing Act (12 U.S.C. 1709(b)(2)) is amended--
            (1) by amending subparagraphs (A) and (B) to read as 
        follows:
                    ``(A) not to exceed the lesser of--
                            ``(i) in the case of a 1-family residence, 
                        110 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) 150 percent of the dollar amount 
                        limitation determined under section 305(a)(2) 
                        of the Federal Home Loan Mortgage Corporation 
                        Act for a residence of applicable size,
                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
                    ``(B) not to exceed 100 percent of the appraised 
                value of the property.''; and
            (2) in the matter following subparagraph (B), by striking 
        the second sentence (relating to a definition of ``average 
        closing cost'') and all that follows through ``section 3103A(d) 
        of title 38, United States Code.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect upon the expiration of the date described in section 202(a) 
of the Economic Stimulus Act of 2008 (Public Law 110-185).

SEC. 2113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF SELLER-FUNDED 
              DOWN PAYMENT ASSISTANCE.

    Paragraph (9) of section 203(b) of the National Housing Act (12 
U.S.C. 1709(b)(9)) is amended to read as follows:
            ``(9) Cash investment requirement.--
                    ``(A) In general.--A mortgage insured under this 
                section shall be executed by a mortgagor who shall have 
                paid, in cash, on account of the property an amount 
                equal to not less than 3.5 percent of the appraised 
                value of the property or such larger amount as the 
                Secretary may determine.
                    ``(B) Family members.--For purposes of this 
                paragraph, the Secretary shall consider as cash or its 
                equivalent any amounts borrowed from a family member 
                (as such term is defined in section 201), subject only 
                to the requirements that, in any case in which the 
                repayment of such borrowed amounts is secured by a lien 
                against the property, that--
                            ``(i) such lien shall be subordinate to the 
                        mortgage; and
                            ``(ii) the sum of the principal obligation 
                        of the mortgage and the obligation secured by 
                        such lien may not exceed 100 percent of the 
                        appraised value of the property.
                    ``(C) Prohibited sources.--In no case shall the 
                funds required by subparagraph (A) consist, in whole or 
                in part, of funds provided by any of the following 
                parties before, during, or after closing of the 
                property sale:
                            ``(i) The seller or any other person or 
                        entity that financially benefits from the 
                        transaction.
                            ``(ii) Any third party or entity that is 
                        reimbursed, directly or indirectly, by any of 
                        the parties described in clause (i).''.

SEC. 2114. MORTGAGE INSURANCE PREMIUMS.

    Section 203(c)(2) of the National Housing Act (12 U.S.C. 
1709(c)(2)) is amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``or of the General Insurance Fund'' and all that follows 
        through ``section 234(c),,''; and
            (2) in subparagraph (A)--
                    (A) by striking ``2.25 percent'' and inserting ``3 
                percent''; and
                    (B) by striking ``2.0 percent'' and inserting 
                ``2.75 percent''.

SEC. 2115. 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. 2116. 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. 2117. INSURANCE OF CONDOMINIUMS.

    (a) In General.--Section 234 of the National Housing Act (12 U.S.C. 
1715y) is amended--
            (1) in subsection (c), in the first sentence--
                    (A) by striking ``and'' before ``(2)''; and
                    (B) 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
            (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) is amended by adding at the end the following new 
subsection:
    ``(g) 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. 2118. 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. The report shall also include 
        an evaluation of the quality control procedures and accuracy of 
        information utilized in the process of underwriting loans 
        guaranteed by the Fund. Such evaluation shall include a review 
        of the risk characteristics of loans based not only on borrower 
        information and performance, but on risks associated with loans 
        originated or funded by various entities or financial 
        institutions.
            ``(5) Quarterly reports.--During each fiscal year, the 
        Secretary shall submit a report to the Congress for each 
        calendar 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 on the last day of the first full calendar quarter 
        following the enactment of the Building 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 (4), the Secretary determines that the Fund is not 
        meeting the operational goals established under paragraph (7) 
        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 this title 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 minimize the default risk to the Fund and 
                to homeowners by among other actions instituting fraud 
                prevention quality control screening not later than 18 
                months after the date of enactment of the Building 
                American Homeownership Act of 2008; and
                    ``(B) 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 
                through the end of the subsection 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. 2119. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.

    (a) Hawaiian Home Lands.--Section 247(c) of the National Housing 
Act (12 U.S.C. 1715z-12(c)) 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(f)) is amended--
            (1) by striking ``General Insurance Fund'' the first place 
        it appears 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. 2120. 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. 2121. INSURANCE OF MORTGAGES.

    Subsection (n)(2) of section 203 of the National Housing Act (12 
U.S.C. 1709(n)(2)) is amended--
            (1) in subparagraph (A), by inserting ``or subordinate 
        mortgage or'' before ``lien given''; and
            (2) in subparagraph (C), by inserting ``or subordinate 
        mortgage or'' before ``lien''.

SEC. 2122. 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) by amending subsection (d)(1) to read as follows:
            ``(1) have been originated by a mortgagee approved by the 
        Secretary;'';
            (3) by amending subsection (d)(2)(B) to read as follows:
                    ``(B) has received adequate counseling, as provided 
                in subsection (f), by an independent third party that 
                is not, either directly or indirectly, associated with 
                or compensated by a party involved in--
                            ``(i) originating or servicing the 
                        mortgage;
                            ``(ii) funding the loan underlying the 
                        mortgage; or
                            ``(iii) the sale of annuities, investments, 
                        long-term care insurance, or any other type of 
                        financial or insurance product;'';
            (4) in subsection (f)--
                    (A) by striking ``(f) Information Services for 
                Mortgagors.--'' and inserting ``(f) Counseling Services 
                and Information for Mortgagors.--''; and
                    (B) by amending the matter preceding paragraph (1) 
                to read as follows: ``The Secretary shall provide or 
                cause to be provided adequate counseling for the 
                mortgagor, as described in subsection (d)(2)(B). Such 
                counseling shall be provided by counselors that meet 
                qualification standards and follow uniform counseling 
                protocols. The qualification standards and counseling 
                protocols shall be established by the Secretary within 
                12 months of the date of enactment of the Building 
                American Homeownership Act of 2008. The protocols shall 
                require a qualified counselor to discuss with each 
                mortgagor information which shall include--''
            (5) in subsection (g), by striking ``established under 
        section 203(b)(2)'' and all that follows through ``located'' 
        and inserting ``limitation established under section 305(a)(2) 
        of the Federal Home Loan Mortgage Corporation Act for a 1-
        family residence'';
            (6) by striking subsection (l);
            (7) by redesignating subsection (m) as subsection (l);
            (8) by amending subsection (l), as so redesignated, to read 
        as follows:
    ``(l) Funding for Counseling.--The Secretary may use a portion of 
the mortgage insurance premiums collected under the program under this 
section to adequately fund the counseling and disclosure activities 
required under subsection (f), including counseling for those 
homeowners who elect not to take out a home equity conversion mortgage, 
provided that the use of such funds is based upon accepted actuarial 
principles.''; and
            (9) by adding at the end the following new subsection:
    ``(m) Authority To Insure Home Purchase Mortgage.--
            ``(1) In general.--Notwithstanding any other provision of 
        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 home 
        equity conversion mortgage will be used to purchase a 1- to 4-
        family dwelling unit, one unit of which the mortgagor will 
        occupy as a primary residence, and to provide for any future 
        payments to the mortgagor, based on available equity, as 
        authorized under subsection (d)(9).
            ``(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 dollar 
        amount limitation determined under section 305(a)(2) of the 
        Federal Home Loan Mortgage Corporation Act for a 1-family 
        residence.
    ``(n) Requirements on Mortgage Originators.--
            ``(1) In general.--The mortgagee and any other party that 
        participates in the origination of a mortgage to be insured 
        under this section shall--
                    ``(A) not participate in, be associated with, or 
                employ any party that participates in or is associated 
                with any other financial or insurance activity; or
                    ``(B) demonstrate to the Secretary that the 
                mortgagee or other party maintains, or will maintain, 
                firewalls and other safeguards designed to ensure 
                that--
                            ``(i) individuals participating in the 
                        origination of the mortgage shall have no 
                        involvement with, or incentive to provide the 
                        mortgagor with, any other financial or 
                        insurance product; and
                            ``(ii) the mortgagor shall not be required, 
                        directly or indirectly, as a condition of 
                        obtaining a mortgage under this section, to 
                        purchase any other financial or insurance 
                        product.
            ``(2) Approval of other parties.--All parties that 
        participate in the origination of a mortgage to be insured 
        under this section shall be approved by the Secretary.
    ``(o) Prohibition Against Requirements To Purchase Additional 
Products.--The mortgagee or any other party shall not be required by 
the mortgagor or any other party to purchase an insurance, annuity, or 
other additional product as a requirement or condition of eligibility 
for insurance under subsection (c).
    ``(p) Study To Determine Consumer Protections and Underwriting 
Standards.--The Secretary shall conduct a study to examine and 
determine appropriate consumer protections and underwriting standards 
to ensure that the purchase of products referred to in subsection (o) 
is appropriate for the consumer. In conducting such study, the 
Secretary shall consult with consumer advocates (including recognized 
experts in consumer protection), industry representatives, 
representatives of counseling organizations, and other interested 
parties.''.
    (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) 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 by adding at the end the 
following new subsection:
    ``(r) 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) equal 1.5 percent of the maximum claim amount of the 
        mortgage unless adjusted thereafter on the basis of--
                    ``(A) the costs to the mortgagor; and
                    ``(B) the impact of such fees 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; and
            ``(5) have the same effective date as subsection (m)(2) 
        regarding the limitation on principal obligation.''.
    (d) Study Regarding Program Costs and Credit Availability.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study regarding the costs and 
        availability of credit under the home equity conversion 
        mortgages for elderly homeowners program under section 255 of 
        the National Housing Act (12 U.S.C. 1715z-20) (in this 
        subsection referred to as the ``program'').
            (2) Purpose.--The purpose of the study required under 
        paragraph (1) is to help Congress analyze and determine the 
        effects of limiting the amounts of the costs or fees under the 
        program from the amounts charged under the program as of the 
        date of the enactment of this title.
            (3) Content of report.--The study required under paragraph 
        (1) should focus on--
                    (A) the cost to mortgagors of participating in the 
                program;
                    (B) the financial soundness of the program;
                    (C) the availability of credit under the program; 
                and
                    (D) the costs to elderly homeowners participating 
                in the program, including--
                            (i) mortgage insurance premiums charged 
                        under the program;
                            (ii) up-front fees charged under the 
                        program; and
                            (iii) margin rates charged under the 
                        program.
            (4) Timing of report.--Not later than 12 months after the 
        date of the enactment of this title, the Comptroller General 
        shall submit a report to the Committee on Banking, Housing, and 
        Urban Affairs of the Senate and the Committee on Financial 
        Services of the House of Representatives setting forth the 
        results and conclusions of the study required under paragraph 
        (1).

SEC. 2123. ENERGY EFFICIENT MORTGAGES PROGRAM.

    Section 106(a)(2) of the Energy Policy Act of 1992 (42 U.S.C. 12712 
note) is amended--
            (1) by amending subparagraph (C) to read as follows:
                    ``(C) Costs of improvements.--The cost of cost-
                effective energy efficiency improvements shall not 
                exceed the greater of--
                            ``(i) 5 percent of the property value (not 
                        to exceed 5 percent of the limit established 
                        under section 203(b)(2)(A)) of the National 
                        Housing Act (12 U.S.C. 1709(b)(2)(A); or
                            ``(ii) 2 percent of the limit established 
                        under section 203(b)(2)(B) of such Act.''; and
            (2) by adding at the end the following:
                    ``(D) Limitation.--In any fiscal year, the 
                aggregate number of mortgages insured pursuant to this 
                section may not exceed 5 percent of the aggregate 
                number of mortgages for 1- to 4-family residences 
                insured by the Secretary of Housing and Urban 
                Development under title II of the National Housing Act 
                (12 U.S.C. 1707 et seq.) during the preceding fiscal 
                year.''.

SEC. 2124. 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.) is amended by adding at the end the following new 
section:

``SEC. 257. 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 to first-time homebuyers.
    ``(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 Building 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 two-year 
period beginning on the date of the enactment of this subtitle, the 
Comptroller General of the United States shall submit to the Congress a 
report identifying the number of additional mortgagors served using the 
automated process established pursuant to section 257 of the National 
Housing Act (as added by the amendment made by subsection (a) of this 
section) 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. 2125. HOMEOWNERSHIP PRESERVATION.

    The Secretary of Housing and Urban Development and the Commissioner 
of the Federal Housing Administration, in consultation with industry, 
the Neighborhood Reinvestment Corporation, and other entities involved 
in foreclosure prevention activities, shall--
            (1) develop and implement a plan to improve the Federal 
        Housing Administration's loss mitigation process; and
            (2) report such plan to the Committee on Banking, Housing, 
        and Urban Affairs of the Senate and the Committee on Financial 
        Services of the House of Representatives.

SEC. 2126. USE OF FHA SAVINGS FOR IMPROVEMENTS IN FHA TECHNOLOGIES, 
              PROCEDURES, PROCESSES, PROGRAM PERFORMANCE, STAFFING, AND 
              SALARIES.

    (a) Authorization of Appropriations.--There is authorized to be 
appropriated for each of fiscal years 2009 through 2013, $25,000,000, 
from negative credit subsidy for the mortgage insurance programs under 
title II of the National Housing Act, to the Secretary of Housing and 
Urban Development for increasing funding for the purpose of improving 
technology, processes, program performance, eliminating fraud, and for 
providing appropriate staffing in connection with the mortgage 
insurance programs under title II of the National Housing Act.
    (b) Certification.--The authorization under subsection (a) shall 
not be effective for a fiscal year unless the Secretary of Housing and 
Urban Development has, by rulemaking in accordance with section 553 of 
title 5, United States Code (notwithstanding subsections (a)(2), 
(b)(B), and (d)(3) of such section), made a determination that--
            (1) premiums being, or to be, charged during such fiscal 
        year for mortgage insurance under title II of the National 
        Housing Act are established at the minimum amount sufficient 
        to--
                    (A) comply with the requirements of section 205(f) 
                of such Act (relating to required capital ratio for the 
                Mutual Mortgage Insurance Fund); and
                    (B) ensure the safety and soundness of the other 
                mortgage insurance funds under such Act; and
            (2) any negative credit subsidy for such fiscal year 
        resulting from such mortgage insurance programs adequately 
        ensures the efficient delivery and availability of such 
        programs.
    (c) Study and Report.--The Secretary of Housing and Urban 
Development shall conduct a study to obtain recommendations from 
participants in the private residential (both single family and 
multifamily) mortgage lending business and the secondary market for 
such mortgages on how best to update and upgrade processes and 
technologies for the mortgage insurance programs under title II of the 
National Housing Act so that the procedures for originating, insuring, 
and servicing of such mortgages conform with those customarily used by 
secondary market purchasers of residential mortgage loans. Not later 
than the expiration of the 12-month period beginning on the date of the 
enactment of this title, the Secretary shall submit a report to the 
Congress describing the progress made and to be made toward updating 
and upgrading such processes and technology, and providing appropriate 
staffing for such mortgage insurance programs.

SEC. 2127. POST-PURCHASE HOUSING COUNSELING ELIGIBILITY IMPROVEMENTS.

    Section 106(c)(4) of the Housing and Urban Development Act of 1968 
(12 U.S.C. 1701x(c)(4)) is amended:
            (1) in subparagraph (C)--
                    (A) in clause (i), by striking ``; or'' and 
                inserting a semicolon;
                    (B) in clause (ii), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following:
                            ``(iii) a significant reduction in the 
                        income of the household due to divorce or 
                        death; or
                            ``(iv) a significant increase in basic 
                        expenses of the homeowner or an immediate 
                        family member of the homeowner (including the 
                        spouse, child, or parent for whom the homeowner 
                        provides substantial care or financial 
                        assistance) due to--
                                    ``(I) an unexpected or significant 
                                increase in medical expenses;
                                    ``(II) a divorce;
                                    ``(III) unexpected and significant 
                                damage to the property, the repair of 
                                which will not be covered by private or 
                                public insurance; or
                                    ``(IV) a large property-tax 
                                increase; or'';
            (2) by striking the matter that follows subparagraph (C); 
        and
            (3) by adding at the end the following:
                    ``(D) the Secretary of Housing and Urban 
                Development determines that the annual income of the 
                homeowner is no greater than the annual income 
                established by the Secretary as being of low- or 
                moderate-income.''.

SEC. 2128. PRE-PURCHASE HOMEOWNERSHIP COUNSELING DEMONSTRATION.

    (a) Establishment of Program.--For the period beginning on the date 
of enactment of this title and ending on the date that is 3 years after 
such date of enactment, the Secretary of Housing and Urban Development 
shall establish and conduct a demonstration program to test the 
effectiveness of alternative forms of pre-purchase homeownership 
counseling for eligible homebuyers.
    (b) Forms of Counseling.--The Secretary of Housing and Urban 
Development shall provide to eligible homebuyers pre-purchase 
homeownership counseling under this section in the form of--
            (1) telephone counseling;
            (2) individualized in-person counseling;
            (3) web-based counseling;
            (4) counseling classes; or
            (5) any other form or type of counseling that the Secretary 
        may, in his discretion, determine appropriate.
    (c) Size of Program.--The Secretary shall make available the pre-
purchase homeownership counseling described in subsection (b) to not 
more than 3,000 eligible homebuyers in any given year.
    (d) Incentive To Participate.--The Secretary of Housing and Urban 
Development may provide incentives to eligible homebuyers to 
participate in the demonstration program established under subsection 
(a). Such incentives may include the reduction of any insurance premium 
charges owed by the eligible homebuyer to the Secretary.
    (e) Eligible Homebuyer Defined.--For purposes of this section an 
``eligible homebuyer'' means a first-time homebuyer who has been 
approved for a home loan with a loan-to-value ratio between 97 percent 
and 98.5 percent.
    (f) Report to Congress.--The Secretary of Housing and Urban 
Development shall report to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee on Financial Services of 
the House of Representative--
            (1) on an annual basis, on the progress and results of the 
        demonstration program established under subsection (a); and
            (2) for the period beginning on the date of enactment of 
        this title and ending on the date that is 5 years after such 
        date of enactment, on the payment history and delinquency rates 
        of eligible homebuyers who participated in the demonstration 
        program.

SEC. 2129. FRAUD PREVENTION.

    Section 1014 of title 18, United States Code, is amended in the 
first sentence--
            (1) by inserting ``the Federal Housing Administration,'' 
        before ``the Farm Credit Administration''; and
            (2) by striking ``commitment, or loan'' and inserting 
        ``commitment, loan, or insurance agreement or application for 
        insurance or a guarantee''.

SEC. 2130. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.

    (a) In General.--Notwithstanding any other provision of law, 
including any provision of this title and any amendment made by this 
title--
            (1) for the period beginning on the date of the enactment 
        of this title and ending on October 1, 2009, the premiums 
        charged for mortgage insurance under multifamily housing 
        programs 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 if not less than 30 days prior to such increase 
        taking effect, the Secretary of Housing and Urban Development--
                    (A) notifies the Committee on Banking, Housing, and 
                Urban Affairs of the Senate and the Committee on 
                Financial Services of the House of Representatives of 
                such increase; and
                    (B) publishes notice of such increase in the 
                Federal Register.
    (b) Waiver.--The Secretary of Housing and Urban Development may 
waive the 30-day notice requirement under subsection (a)(2), if the 
Secretary determines that waiting 30-days before increasing premiums 
would cause substantial damage to the solvency of multifamily housing 
programs under the National Housing Act.

SEC. 2131. SAVINGS PROVISION.

    Any mortgage insured under title II of the National Housing Act 
before the date of enactment of this subtitle 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 subtitle.

SEC. 2132. IMPLEMENTATION.

    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.

SEC. 2133. MORATORIUM ON IMPLEMENTATION OF RISK-BASED PREMIUMS.

    (a) In General.--During the 12-month period beginning on the date 
of enactment of this Act, the Secretary of Housing and Urban 
Development shall not enact, execute, or take any action to make 
effective the planned implementation of risk-based premiums, which are 
designed for mortgage lenders to offer borrowers an FHA-insured product 
that provides a range of mortgage insurance premium pricing, based on 
the risk that the insurance contract represents, as such planned 
implementation was set forth in the Notice published in the Federal 
Register on May 13, 2008 (Vol. 73, No. 93, Pages 27703 through 
27711)(effective July 14, 2008).
    (b) Insurance of Mortgages Under the National Housing Act.--During 
the 12-month period beginning on the date of enactment of this Act, the 
Secretary of Housing and Urban Development shall not enact, execute, or 
take any action to make effective the implementation of any other new 
risk-based premium product related to the insurance of any mortgage on 
a single family residence under title II of the National Housing Act, 
where the premium price for such new product is based in whole or in 
part on a borrower's Decision Credit Score, as that term is defined in 
the Notice described under subsection (a), or any successor thereto.

          Subtitle B--Manufactured Housing Loan Modernization

SEC. 2141. SHORT TITLE.

    This subtitle may be cited as the ``FHA Manufactured Housing Loan 
Modernization Act of 2008''.

SEC. 2142. 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. 2143. 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. 2144. 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 FHA Manufactured Housing Loan 
        Modernization Act of 2008 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 title.

SEC. 2145. 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 title, 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 1 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. 2146. 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. 2147. 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. 2148. 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 title, 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 title, 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. 2149. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

    Title I of the National Housing Act is amended by adding at the end 
of section 9 the following new section:

``SEC. 10. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

    ``(a) In General.--Except as provided in subsection (b), the 
provisions of sections 3, 8, 16, 17, 18, and 19 of the Real Estate 
Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.) shall apply 
to each sale of a manufactured home financed with an FHA-insured loan 
or extension of credit, as well as to services rendered in connection 
with such transactions.
    ``(b) Authority of the Secretary.--The Secretary is authorized to 
determine the manner and extent to which the provisions of sections 3, 
8, 16, 17, 18, and 19 of the Real Estate Settlement Procedures Act of 
1974 (12 U.S.C. 2601 et seq.) may reasonably be applied to the 
transactions described in subsection (a), and to grant such exemptions 
as may be necessary to achieve the purposes of this section.
    ``(c) Definitions.--For purposes of this section--
            ``(1) the term `federally related mortgage loan' as used in 
        sections 3, 8, 16, 17, 18, and 19 of the Real Estate Settlement 
        Procedures Act of 1974 (12 U.S.C. 2601 et seq.) shall include 
        an FHA-insured loan or extension of credit made to a borrower 
        for the purpose of purchasing a manufactured home that the 
        borrower intends to occupy as a personal residence; and
            ``(2) the term `real estate settlement service' as used in 
        sections 3, 8, 16, 17, 18, and 19 of the Real Estate Settlement 
        Procedures Act of 1974 (12 U.S.C. 2601 et seq.) shall include 
        any service rendered in connection with a loan or extension of 
        credit insured by the Federal Housing Administration for the 
        purchase of a manufactured home.
    ``(d) Unfair and Deceptive Practices.--In connection with the 
purchase of a manufactured home financed with a loan or extension of 
credit insured by the Federal Housing Administration under this title, 
the Secretary shall prohibit acts or practices in connection with loans 
or extensions of credit that the Secretary finds to be unfair, 
deceptive, or otherwise not in the interests of the borrower.''.

SEC. 2150. LEASEHOLD REQUIREMENTS.

    Subsection (b) of section 2 of the National Housing Act (12 U.S.C. 
1703(b)), as amended by the preceding provisions of this title, is 
further amended by adding at the end the following new paragraph:
            ``(11) Leasehold requirements.--No insurance shall be 
        granted under this section to any such financial institution 
        with respect to any obligation representing any such loan, 
        advance of credit, or purchase by it, made for the purposes of 
        financing a manufactured home which is intended to be situated 
        in a manufactured home community pursuant to a lease, unless 
        such lease--
                    ``(A) expires not less than 3 years after the 
                origination date of the obligation;
                    ``(B) is renewable upon the expiration of the 
                original 3 year term by successive 1 year terms; and
                    ``(C) requires the lessor to provide the lessee 
                written notice of termination of the lease not less 
                than 180 days prior to the expiration of the current 
                lease term in the event the lessee is required to move 
                due to the closing of the manufactured home community, 
                and further provides that failure to provide such 
                notice to the mortgagor in a timely manner will cause 
                the lease term, at its expiration, to automatically 
                renew for an additional 1 year term.''.

     TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

SEC. 2201. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT FOR 
              CERTAIN HOUSING LOANS GUARANTEED BY THE 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. 2202. COUNSELING ON MORTGAGE FORECLOSURES FOR MEMBERS OF THE ARMED 
              FORCES RETURNING FROM SERVICE ABROAD.

    (a) In General.--The Secretary of Defense shall develop and 
implement a program to advise members of the Armed Forces (including 
members of the National Guard and Reserve) who are returning from 
service on active duty abroad (including service in Operation Iraqi 
Freedom and Operation Enduring Freedom) on actions to be taken by such 
members to prevent or forestall mortgage foreclosures.
    (b) Elements.--The program required by subsection (a) shall include 
the following:
            (1) Credit counseling.
            (2) Home mortgage counseling.
            (3) Such other counseling and information as the Secretary 
        considers appropriate for purposes of the program.
    (c) Timing of Provision of Counseling.--Counseling and other 
information under the program required by subsection (a) shall be 
provided to a member of the Armed Forces covered by the program as soon 
as practicable after the return of the member from service as described 
in subsection (a).

SEC. 2203. ENHANCEMENT OF PROTECTIONS FOR SERVICEMEMBERS RELATING TO 
              MORTGAGES AND MORTGAGE FORECLOSURES.

    (a) Extension of Period of Protections Against Mortgage 
Foreclosures.--
            (1) Extension of protection period.--Subsection (c) of 
        section 303 of the Servicemembers Civil Relief Act (50 U.S.C. 
        App. 533) is amended by striking ``90 days'' and inserting ``9 
        months''.
            (2) Extension of stay of proceedings period.--Subsection 
        (b) of such section is amended by striking ``90 days'' and 
        inserting ``9 months''.
    (b) Treatment of Mortgages as Obligations Subject to Interest Rate 
Limitation.--Section 207 of the Servicemembers Civil Relief Act (50 
U.S.C. App. 527) is amended--
            (1) in subsection (a)(1), by striking ``in excess of 6 
        percent'' the second place it appears and all that follows and 
        inserting ``in excess of 6 percent--
                    ``(A) during the period of military service and one 
                year thereafter, in the case of an obligation or 
                liability consisting of a mortgage, trust deed, or 
                other security in the nature of a mortgage; or
                    ``(B) during the period of military service, in the 
                case of any other obligation or liability.''; and
            (2) by striking subsection (d) and inserting the following 
        new subsection:
    ``(d) Definitions.--In this section:
            ``(1) Interest.--The term `interest' includes service 
        charges, renewal charges, fees, or any other charges (except 
        bona fide insurance) with respect to an obligation or 
        liability.
            ``(2) Obligation or liability.--The term `obligation or 
        liability' includes an obligation or liability consisting of a 
        mortgage, trust deed, or other security in the nature of a 
        mortgage.''.
    (c) Effective Date; Sunset.--
            (1) Effective date.--The amendment made by subsection (a) 
        shall take effect on the date of enactment of this Act.
            (2) Sunset.--The amendments made by subsection (a) shall 
        expire on December 31, 2010. Effective January 1, 2011, the 
        provisions of subsections (b) and (c) of section 303 of the 
        Servicemembers Civil Relief Act, as in effect on the day before 
        the date of the enactment of this Act, are hereby revived.

TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND 
                            FORECLOSED HOMES

SEC. 2301. EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND 
              FORECLOSED HOMES.

    (a) Direct Appropriations.--There are appropriated out of any money 
in the Treasury not otherwise appropriated for the fiscal year 2008, 
$4,000,000,000, to remain available until expended, for assistance to 
States and units of general local government (as such terms are defined 
in section 102 of the Housing and Community Development Act of 1974 (42 
U.S.C. 5302)) for the redevelopment of abandoned and foreclosed upon 
homes and residential properties.
    (b) Allocation of Appropriated Amounts.--
            (1) In general.--The amounts appropriated or otherwise made 
        available to States and units of general local government under 
        this section shall be allocated based on a funding formula 
        established by the Secretary of Housing and Urban Development 
        (in this title referred to as the ``Secretary'').
            (2) Formula to be devised swiftly.--The funding formula 
        required under paragraph (1) shall be established not later 
        than 60 days after the date of enactment of this section.
            (3) Criteria.--The funding formula required under paragraph 
        (1) shall ensure that any amounts appropriated or otherwise 
        made available under this section are allocated to States and 
        units of general local government with the greatest need, as 
        such need is determined in the discretion of the Secretary 
        based on--
                    (A) the number and percentage of home foreclosures 
                in each State or unit of general local government;
                    (B) the number and percentage of homes financed by 
                a subprime mortgage related loan in each State or unit 
                of general local government; and
                    (C) the number and percentage of homes in default 
                or delinquency in each State or unit of general local 
                government.
            (4) Distribution.--Amounts appropriated or otherwise made 
        available under this section shall be distributed according to 
        the funding formula established by the Secretary under 
        paragraph (1) not later than 30 days after the establishment of 
        such formula.
    (c) Use of Funds.--
            (1) In general.--Any State or unit of general local 
        government that receives amounts pursuant to this section 
        shall, not later than 18 months after the receipt of such 
        amounts, use such amounts to purchase and redevelop abandoned 
        and foreclosed homes and residential properties.
            (2) Priority.--Any State or unit of general local 
        government that receives amounts pursuant to this section shall 
        in distributing such amounts give priority emphasis and 
        consideration to those metropolitan areas, metropolitan cities, 
        urban areas, rural areas, low- and moderate-income areas, and 
        other areas with the greatest need, including those--
                    (A) with the greatest percentage of home 
                foreclosures;
                    (B) with the highest percentage of homes financed 
                by a subprime mortgage related loan; and
                    (C) identified by the State or unit of general 
                local government as likely to face a significant rise 
                in the rate of home foreclosures.
            (3) Eligible uses.--Amounts made available under this 
        section may be used to--
                    (A) establish financing mechanisms for purchase and 
                redevelopment of foreclosed upon homes and residential 
                properties, including such mechanisms as soft-seconds, 
                loan loss reserves, and shared-equity loans for low- 
                and moderate-income homebuyers;
                    (B) purchase and rehabilitate homes and residential 
                properties that have been abandoned or foreclosed upon, 
                in order to sell, rent, or redevelop such homes and 
                properties;
                    (C) establish land banks for homes that have been 
                foreclosed upon;
                    (D) demolish blighted structures; and
                    (E) redevelop demolished or vacant properties.
    (d) Limitations.--
            (1) On purchases.--Any purchase of a foreclosed upon home 
        or residential property under this section shall be at a 
        discount from the current market appraised value of the home or 
        property, taking into account its current condition, and such 
        discount shall ensure that purchasers are paying below-market 
        value for the home or property.
            (2) Sale of homes.--If an abandoned or foreclosed upon home 
        or residential property is purchased, redeveloped, or otherwise 
        sold to an individual as a primary residence, then such sale 
        shall be in an amount equal to or less than the cost to acquire 
        and redevelop or rehabilitate such home or property up to a 
        decent, safe, and habitable condition.
            (3) Reinvestment of profits.--
                    (A) Profits from sales, rentals, and 
                redevelopment.--
                            (i) 5-year reinvestment period.--During the 
                        5-year period following the date of enactment 
                        of this Act, any revenue generated from the 
                        sale, rental, redevelopment, rehabilitation, or 
                        any other eligible use that is in excess of the 
                        cost to acquire and redevelop (including 
                        reasonable development fees) or rehabilitate an 
                        abandoned or foreclosed upon home or 
                        residential property shall be provided to and 
                        used by the State or unit of general local 
                        government in accordance with, and in 
                        furtherance of, the intent and provisions of 
                        this section.
                            (ii) Deposits in the treasury.--
                                    (I) Profits.--Upon the expiration 
                                of the 5-year period set forth under 
                                clause (i), any revenue generated from 
                                the sale, rental, redevelopment, 
                                rehabilitation, or any other eligible 
                                use that is in excess of the cost to 
                                acquire and redevelop (including 
                                reasonable development fees) or 
                                rehabilitate an abandoned or foreclosed 
                                upon home or residential property shall 
                                be deposited in the Treasury of the 
                                United States as miscellaneous 
                                receipts, unless the Secretary approves 
                                a request to use the funds for purposes 
                                under this Act.
                                    (II) Other amounts.--Upon the 
                                expiration of the 5-year period set 
                                forth under clause (i), any other 
                                revenue not described under subclause 
                                (I) generated from the sale, rental, 
                                redevelopment, rehabilitation, or any 
                                other eligible use of an abandoned or 
                                foreclosed upon home or residential 
                                property shall be deposited in the 
                                Treasury of the United States as 
                                miscellaneous receipts.
                    (B) Other revenues.--Any revenue generated under 
                subparagraphs (A), (C) or (D) of subsection (c)(3) 
                shall be provided to and used by the State or unit of 
                general local government in accordance with, and in 
                furtherance of, the intent and provisions of this 
                section.
    (e) Rules of Construction.--
            (1) In general.--Except as otherwise provided by this 
        section, amounts appropriated, revenues generated, or amounts 
        otherwise made available to States and units of general local 
        government under this section shall be treated as though such 
        funds were community development block grant funds under title 
        I of the Housing and Community Development Act of 1974 (42 
        U.S.C. 5301 et seq.).
            (2) No match.--No matching funds shall be required in order 
        for a State or unit of general local government to receive any 
        amounts under this section.
    (f) Authority To Specify Alternative Requirements.--
            (1) In general.--In administering any amounts appropriated 
        or otherwise made available under this section, the Secretary 
        may specify alternative requirements to any provision under 
        title I of the Housing and Community Development Act of 1974 
        (except for those related to fair housing, nondiscrimination, 
        labor standards, and the environment) in accordance with the 
        terms of this section and for the sole purpose of expediting 
        the use of such funds.
            (2) Notice.--The Secretary shall provide written notice of 
        its intent to exercise the authority to specify alternative 
        requirements under paragraph (1) to the Committee on Banking, 
        Housing and Urban Affairs of the Senate and the Committee on 
        Financial Services of the House of Representatives not later 
        than 10 business days before such exercise of authority is to 
        occur.
            (3) Low and moderate income requirement.--
                    (A) In general.--Notwithstanding the authority of 
                the Secretary under paragraph (1)--
                            (i) all of the funds appropriated or 
                        otherwise made available under this section 
                        shall be used with respect to individuals and 
                        families whose income does not exceed 120 
                        percent of area median income; and
                            (ii) not less than 25 percent of the funds 
                        appropriated or otherwise made available under 
                        this section shall be used for the purchase and 
                        redevelopment of abandoned or foreclosed upon 
                        homes or residential properties that will be 
                        used to house individuals or families whose 
                        incomes do not exceed 50 percent of area median 
                        income.
                    (B) Recurrent requirement.--The Secretary shall, by 
                rule or order, ensure, to the maximum extent 
                practicable and for the longest feasible term, that the 
                sale, rental, or redevelopment of abandoned and 
                foreclosed upon homes and residential properties under 
                this section remain affordable to individuals or 
                families described in subparagraph (A).
    (g) Periodic Audits.--In consultation with the Secretary of Housing 
and Urban Development, the Comptroller General of the United States 
shall conduct periodic audits to ensure that funds appropriated, made 
available, or otherwise distributed under this section are being used 
in a manner consistent with the criteria provided in this section.

SEC. 2302. NATIONWIDE DISTRIBUTION OF RESOURCES.

    Notwithstanding any other provision of this Act or the amendments 
made by this Act, each State shall receive not less than 0.5 percent of 
funds made available under section 2301 (relating to emergency 
assistance for the redevelopment of abandoned and foreclosed homes).

SEC. 2303. LIMITATION ON USE OF FUNDS WITH RESPECT TO EMINENT DOMAIN.

    No State or unit of general local government may use any amounts 
received pursuant to section 2301 to fund any project that seeks to use 
the power of eminent domain, unless eminent domain is employed only for 
a public use: Provided, That for purposes of this section, public use 
shall not be construed to include economic development that primarily 
benefits private entities.

SEC. 2304. LIMITATION ON DISTRIBUTION OF FUNDS.

    (a) In General.--None of the funds made available under this title 
or title IV shall be distributed to--
            (1) an organization which has been indicted for a violation 
        under Federal law relating to an election for Federal office; 
        or
            (2) an organization which employs applicable individuals.
    (b) Applicable Individuals Defined.--In this section, the term 
``applicable individual'' means an individual who--
            (1) is--
                    (A) employed by the organization in a permanent or 
                temporary capacity;
                    (B) contracted or retained by the organization; or
                    (C) acting on behalf of, or with the express or 
                apparent authority of, the organization; and
            (2) has been indicted for a violation under Federal law 
        relating to an election for Federal office.

SEC. 2305. COUNSELING INTERMEDIARIES.

    Notwithstanding any other provision of this Act, the amount 
appropriated under section 2301(a) of this Act shall be $3,920,000,000 
and the amount appropriated under section 2401 of this Act shall be 
$180,000,000: Provided, That of amounts appropriated under such section 
2401 $30,000,000 shall be used by the Neighborhood Reinvestment 
Corporation (referred to in this section as the ``NRC'') to make grants 
to counseling intermediaries approved by the Department of Housing and 
Urban Development or the NRC to hire attorneys to assist homeowners who 
have legal issues directly related to the homeowner's foreclosure, 
delinquency or short sale. Such attorneys shall be capable of assisting 
homeowners of owner-occupied homes with mortgages in default, in danger 
of default, or subject to or at risk of foreclosure and who have legal 
issues that cannot be handled by counselors already employed by such 
intermediaries: Provided, That of the amounts provided for in the prior 
provisos the NRC shall give priority consideration to counseling 
intermediaries and legal organizations that (1) 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 (2) have the capacity to begin using the 
financial assistance within 90 days after receipt of the assistance: 
Provided further, That no funds provided under this Act shall be used 
to provide, obtain, or arrange on behalf of a homeowner, legal 
representation involving or for the purposes of civil litigation.

                 TITLE IV--HOUSING COUNSELING RESOURCES

SEC. 2401. HOUSING COUNSELING RESOURCES.

    There are appropriated out of any money in the Treasury not 
otherwise appropriated for the fiscal year 2008, for an additional 
amount for the ``Neighborhood Reinvestment Corporation--Payment to the 
Neighborhood Reinvestment Corporation'' $100,000,000, to remain 
available until September 30, 2008, for foreclosure mitigation 
activities under the terms and conditions contained in the second 
undesignated paragraph (beginning with the phrase ``For an additional 
amount'') under the heading ``Neighborhood Reinvestment Corporation--
Payment to the Neighborhood Reinvestment Corporation'' of Public Law 
110-161.

SEC. 2402. CREDIT COUNSELING.

    (a) In General.--Entities approved by the Neighborhood Reinvestment 
Corporation or the Secretary and State housing finance entities 
receiving funds under this title shall work to identify and coordinate 
with non-profit organizations operating national or statewide toll-free 
foreclosure prevention hotlines, including those that--
            (1) serve as a consumer referral source and data repository 
        for borrowers experiencing some form of delinquency or 
        foreclosure;
            (2) connect callers with local housing counseling agencies 
        approved by the Neighborhood Reinvestment Corporation or the 
        Secretary to assist with working out a positive resolution to 
        their mortgage delinquency or foreclosure; or
            (3) facilitate or offer free assistance to help homeowners 
        to understand their options, negotiate solutions, and find the 
        best resolution for their particular circumstances.

              TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

SEC. 2501. SHORT TITLE.

    This title may be cited as the ``Mortgage Disclosure Improvement 
Act of 2008''.

SEC. 2502. ENHANCED MORTGAGE LOAN DISCLOSURES.

    (a) Truth in Lending Act Disclosures.--Section 128(b)(2) of the 
Truth in Lending Act (15 U.S.C. 1638(b)(2)) is amended--
            (1) by inserting ``(A)'' before ``In the'';
            (2) by striking ``a residential mortgage transaction, as 
        defined in section 103(w)'' and inserting ``any extension of 
        credit that is secured by the dwelling of a consumer'';
            (3) by striking ``before the credit is extended, or'';
            (4) by inserting ``, which shall be at least 7 business 
        days before consummation of the transaction'' after ``written 
        application'';
            (5) by striking ``, whichever is earlier''; and
            (6) by striking ``If the'' and all that follows through the 
        end of the paragraph and inserting the following:
            ``(B) In the case of an extension of credit that is secured 
        by the dwelling of a consumer, the disclosures provided under 
        subparagraph (A), shall be in addition to the other disclosures 
        required by subsection (a), and shall--
                    ``(i) state in conspicuous type size and format, 
                the following: `You are not required to complete this 
                agreement merely because you have received these 
                disclosures or signed a loan application.'; and
                    ``(ii) be provided in the form of final disclosures 
                at the time of consummation of the transaction, in the 
                form and manner prescribed by this section.
            ``(C) In the case of an extension of credit that is secured 
        by the dwelling of a consumer, under which the annual rate of 
        interest is variable, or with respect to which the regular 
        payments may otherwise be variable, in addition to the other 
        disclosures required by subsection (a), the disclosures 
        provided under this subsection shall do the following:
                    ``(i) Label the payment schedule as follows: 
                `Payment Schedule: Payments Will Vary Based on Interest 
                Rate Changes'.
                    ``(ii) State in conspicuous type size and format 
                examples of adjustments to the regular required payment 
                on the extension of credit based on the change in the 
                interest rates specified by the contract for such 
                extension of credit. Among the examples required to be 
                provided under this clause is an example that reflects 
                the maximum payment amount of the regular required 
                payments on the extension of credit, based on the 
                maximum interest rate allowed under the contract, in 
                accordance with the rules of the Board. Prior to 
                issuing any rules pursuant to this clause, the Board 
                shall conduct consumer testing to determine the 
                appropriate format for providing the disclosures 
                required under this subparagraph to consumers so that 
                such disclosures can be easily understood, including 
                the fact that the initial regular payments are for a 
                specific time period that will end on a certain date, 
                that payments will adjust afterwards potentially to a 
                higher amount, and that there is no guarantee that the 
                borrower will be able to refinance to a lower amount.
            ``(D) In any case in which the disclosure statement under 
        subparagraph (A) contains an annual percentage rate of interest 
        that is no longer accurate, as determined under section 107(c), 
        the creditor shall furnish an additional, corrected statement 
        to the borrower, not later than 3 business days before the date 
        of consummation of the transaction.
            ``(E) The consumer shall receive the disclosures required 
        under this paragraph before paying any fee to the creditor or 
        other person in connection with the consumer's application for 
        an extension of credit that is secured by the dwelling of a 
        consumer. If the disclosures are mailed to the consumer, the 
        consumer is considered to have received them 3 business days 
        after they are mailed. A creditor or other person may impose a 
        fee for obtaining the consumer's credit report before the 
        consumer has received the disclosures under this paragraph, 
        provided the fee is bona fide and reasonable in amount.
            ``(F) Waiver of timeliness of disclosures.--To expedite 
        consummation of a transaction, if the consumer determines that 
        the extension of credit is needed to meet a bona fide personal 
        financial emergency, the consumer may waive or modify the 
        timing requirements for disclosures under subparagraph (A), 
        provided that--
                    ``(i) the term `bona fide personal emergency' may 
                be further defined in regulations issued by the Board;
                    ``(ii) the consumer provides to the creditor a 
                dated, written statement describing the emergency and 
                specifically waiving or modifying those timing 
                requirements, which statement shall bear the signature 
                of all consumers entitled to receive the disclosures 
                required by this paragraph; and
                    ``(iii) the creditor provides to the consumers at 
                or before the time of such waiver or modification, the 
                final disclosures required by paragraph (1).
            ``(G) The requirements of subparagraphs (B), (C), (D) and 
        (E) shall not apply to extensions of credit relating to plans 
        described in section 101(53D) of title 11, United States 
        Code.''.
    (b) Civil Liability.--Section 130(a) of the Truth in Lending Act 
(15 U.S.C. 1640(a)) is amended--
            (1) in paragraph (2)(A)(iii), by striking ``not less than 
        $200 or greater than $2,000'' and inserting ``not less than 
        $400 or greater than $4,000''; and
            (2) in the penultimate sentence of the undesignated matter 
        following paragraph (4)--
                    (A) by inserting ``or section 128(b)(2)(C)(ii),'' 
                after ``128(a),''; and
                    (B) by inserting ``or section 128(b)(2)(C)(ii)'' 
                before the period.
    (c) Effective Dates.--
            (1) General disclosures.--Except as provided in paragraph 
        (2), the amendments made by subsection (a) shall become 
        effective 12 months after the date of enactment of this Act.
            (2) Variable interest rates.--Subparagraph (C) of section 
        128(b)(2) of the Truth in Lending Act (15 U.S.C. 
        1638(b)(2)(C)), as added by subsection (a) of this section, 
        shall become effective on the earlier of--
                    (A) the compliance date established by the Board 
                for such purpose, by regulation; or
                    (B) 30 months after the date of enactment of this 
                Act.

SEC. 2503. COMMUNITY DEVELOPMENT INVESTMENT AUTHORITY FOR DEPOSITORY 
              INSTITUTIONS.

    (a) 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) 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) State Member Banks.--The first sentence of the 23rd paragraph 
of section 9 of the Federal Reserve Act (12 U.S.C. 338a) 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''.

                   TITLE VI--VETERANS HOUSING MATTERS

SEC. 2601. HOME IMPROVEMENTS AND STRUCTURAL ALTERATIONS FOR TOTALLY 
              DISABLED MEMBERS OF THE ARMED FORCES BEFORE DISCHARGE OR 
              RELEASE FROM THE ARMED FORCES.

    Section 1717 of title 38, United States Code, is amended by adding 
at the end the following new subsection:
    ``(d)(1) In the case of a member of the Armed Forces who, as 
determined by the Secretary, has a disability permanent in nature 
incurred or aggravated in the line of duty in the active military, 
naval, or air service, the Secretary may furnish improvements and 
structural alterations for such member for such disability or as 
otherwise described in subsection (a)(2) while such member is 
hospitalized or receiving outpatient medical care, services, or 
treatment for such disability if the Secretary determines that such 
member is likely to be discharged or released from the Armed Forces for 
such disability.
    ``(2) The furnishing of improvements and alterations under 
paragraph (1) in connection with the furnishing of medical services 
described in subparagraph (A) or (B) of subsection (a)(2) shall be 
subject to the limitation specified in the applicable subparagraph.''.

SEC. 2602. ELIGIBILITY FOR SPECIALLY ADAPTED HOUSING BENEFITS AND 
              ASSISTANCE FOR MEMBERS OF THE ARMED FORCES WITH SERVICE-
              CONNECTED DISABILITIES AND INDIVIDUALS RESIDING OUTSIDE 
              THE UNITED STATES.

    (a) Eligibility.--Chapter 21 of title 38, United States Code, is 
amended by inserting after section 2101 the following new section:
``Sec. 2101A. Eligibility for benefits and assistance: members of the 
              Armed Forces with service-connected disabilities; 
              individuals residing outside the United States
    ``(a) Members With Service-Connected Disabilities.--(1) The 
Secretary may provide assistance under this chapter to a member of the 
Armed Forces serving on active duty who is suffering from a disability 
that meets applicable criteria for benefits under this chapter if the 
disability is incurred or aggravated in line of duty in the active 
military, naval, or air service. Such assistance shall be provided to 
the same extent as assistance is provided under this chapter to 
veterans eligible for assistance under this chapter and subject to the 
same requirements as veterans under this chapter.
    ``(2) For purposes of this chapter, any reference to a veteran or 
eligible individual shall be treated as a reference to a member of the 
Armed Forces described in subsection (a) who is similarly situated to 
the veteran or other eligible individual so referred to.
    ``(b) Benefits and Assistance for Individuals Residing Outside the 
United States.--(1) Subject to paragraph (2), the Secretary may, at the 
Secretary's discretion, provide benefits and assistance under this 
chapter (other than benefits under section 2106 of this title) to any 
individual otherwise eligible for such benefits and assistance who 
resides outside the United States.
    ``(2) The Secretary may provide benefits and assistance to an 
individual under paragraph (1) only if--
            ``(A) the country or political subdivision in which the 
        housing or residence involved is or will be located permits the 
        individual to have or acquire a beneficial property interest 
        (as determined by the Secretary) in such housing or residence; 
        and
            ``(B) the individual has or will acquire a beneficial 
        property interest (as so determined) in such housing or 
        residence.
    ``(c) Regulations.--Benefits and assistance under this chapter by 
reason of this section shall be provided in accordance with such 
regulations as the Secretary may prescribe.''.
    (b) Conforming Amendments.--
            (1) Repeal of superseded authority.--Section 2101 of title 
        38, United States Code, is amended--
                    (A) by striking subsection (c); and
                    (B) by redesignating subsection (d) as subsection 
                (c).
            (2) Limitations on assistance.--Section 2102 of title 38, 
        United States Code, is amended--
                    (A) in subsection (a)--
                            (i) by striking ``veteran'' each place it 
                        appears and inserting ``individual''; and
                            (ii) in paragraph (3), by striking 
                        ``veteran's'' and inserting ``individual's'';
                    (B) in subsection (b)(1), by striking ``a veteran'' 
                and inserting ``an individual'';
                    (C) in subsection (c)--
                            (i) by striking ``a veteran'' and inserting 
                        ``an individual''; and
                            (ii) by striking ``the veteran'' each place 
                        it appears and inserting ``the individual''; 
                        and
                    (D) in subsection (d), by striking ``a veteran'' 
                each place it appears and inserting ``an individual''.
            (3) Assistance for individuals temporarily residing in 
        housing of family member.--Section 2102A of title 38, United 
        States Code, is amended--
                    (A) by striking ``veteran'' each place it appears 
                (other than in subsection (b)) and inserting 
                ``individual'';
                    (B) in subsection (a), by striking ``veteran's'' 
                each place it appears and inserting ``individual's''; 
                and
                    (C) in subsection (b), by striking ``a veteran'' 
                each place it appears and inserting ``an individual''.
            (4) Furnishing of plans and specifications.--Section 2103 
        of title 38, United States Code, is amended by striking 
        ``veterans'' both places it appears and inserting 
        ``individuals''.
            (5) Construction of benefits.--Section 2104 of title 38, 
        United States Code, is amended--
                    (A) in subsection (a), by striking ``veteran'' each 
                place it appears and inserting ``individual''; and
                    (B) in subsection (b)--
                            (i) in the first sentence, by striking ``A 
                        veteran'' and inserting ``An individual'';
                            (ii) in the second sentence, by striking 
                        ``a veteran'' and inserting ``an individual''; 
                        and
                            (iii) by striking ``such veteran'' each 
                        place it appears and inserting ``such 
                        individual''.
            (6) Veterans' mortgage life insurance.--Section 2106 of 
        title 38, United States Code, is amended--
                    (A) in subsection (a)--
                            (i) by striking ``any eligible veteran'' 
                        and inserting ``any eligible individual''; and
                            (ii) by striking ``the veterans''' and 
                        inserting ``the individual's'';
                    (B) in subsection (b), by striking ``an eligible 
                veteran'' and inserting ``an eligible individual'';
                    (C) in subsection (e), by striking ``an eligible 
                veteran'' and inserting ``an individual'';
                    (D) in subsection (h), by striking ``each veteran'' 
                and inserting ``each individual'';
                    (E) in subsection (i), by striking ``the 
                veteran's'' each place it appears and inserting ``the 
                individual's'';
                    (F) by striking ``the veteran'' each place it 
                appears and inserting ``the individual''; and
                    (G) by striking ``a veteran'' each place it appears 
                and inserting ``an individual''.
            (7) Heading amendments.--(A) The heading of section 2101 of 
        title 38, United States Code, is amended to read as follows:
``Sec. 2101. Acquisition and adaptation of housing: eligible 
              veterans''.
            (B) The heading of section 2102A of such title is amended 
        to read as follows:
``Sec. 2102A. Assistance for individuals residing temporarily in 
              housing owned by a family member''.
            (8) Clerical amendments.--The table of sections at the 
        beginning of chapter 21 of title 38, United States Code, is 
        amended--
                    (A) by striking the item relating to section 2101 
                and inserting the following new item:

``2101. Acquisition and adaptation of housing: eligible veterans.'';
                    (B) by inserting after the item relating to section 
                2101, as so amended, the following new item:

``2101A. Eligibility for benefits and assistance: members of the Armed 
                            Forces with service-connected disabilities; 
                            individuals residing outside the United 
                            States.'';
                and
                    (C) by striking the item relating to section 2102A 
                and inserting the following new item:

``2102A. Assistance for individuals residing temporarily in housing 
                            owned by a family member.''.

SEC. 2603. SPECIALLY ADAPTED HOUSING ASSISTANCE FOR INDIVIDUALS WITH 
              SEVERE BURN INJURIES.

    Section 2101 of title 38, United States Code, is amended--
            (1) in subsection (a)(2), by adding at the end the 
        following new subparagraph:
            ``(E) The disability is due to a severe burn injury (as 
        determined pursuant to regulations prescribed by the 
        Secretary).''; and
            (2) in subsection (b)(2)--
                    (A) by striking ``either'' and inserting ``any''; 
                and
                    (B) by adding at the end the following new 
                subparagraph:
            ``(C) The disability is due to a severe burn injury (as so 
        determined).''.

SEC. 2604. EXTENSION OF ASSISTANCE FOR INDIVIDUALS RESIDING TEMPORARILY 
              IN HOUSING OWNED BY A FAMILY MEMBER.

    Section 2102A(e) of title 38, United States Code, is amended by 
striking ``after the end of the five-year period that begins on the 
date of the enactment of the Veterans' Housing Opportunity and Benefits 
Improvement Act of 2006'' and inserting ``after December 31, 2011''.

SEC. 2605. INCREASE IN SPECIALLY ADAPTED HOUSING BENEFITS FOR DISABLED 
              VETERANS.

    (a) In General.--Section 2102 of title 38, United States Code, is 
amended--
            (1) in subsection (b)(2), by striking ``$10,000'' and 
        inserting ``$12,000'';
            (2) in subsection (d)--
                    (A) in paragraph (1), by striking ``$50,000'' and 
                inserting ``$60,000''; and
                    (B) in paragraph (2), by striking ``$10,000'' and 
                inserting ``$12,000''; and
            (3) by adding at the end the following new subsection:
    ``(e)(1) Effective on October 1 of each year (beginning in 2009), 
the Secretary shall increase the amounts described in subsection (b)(2) 
and paragraphs (1) and (2) of subsection (d) in accordance with this 
subsection.
    ``(2) The increase in amounts under paragraph (1) to take effect on 
October 1 of a year shall be by an amount of such amounts equal to the 
percentage by which--
            ``(A) the residential home cost-of-construction index for 
        the preceding calendar year, exceeds
            ``(B) the residential home cost-of-construction index for 
        the year preceding the year described in subparagraph (A).
    ``(3) The Secretary shall establish a residential home cost-of-
construction index for the purposes of this subsection. The index shall 
reflect a uniform, national average change in the cost of residential 
home construction, determined on a calendar year basis. The Secretary 
may use an index developed in the private sector that the Secretary 
determines is appropriate for purposes of this subsection.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on July 1, 2008, and shall apply with respect to payments made 
in accordance with section 2102 of title 38, United States Code, on or 
after that date.

SEC. 2606. REPORT ON SPECIALLY ADAPTED HOUSING FOR DISABLED 
              INDIVIDUALS.

    (a) In General.--Not later than December 31, 2008, the Secretary of 
Veterans Affairs shall submit to the Committee on Veterans' Affairs of 
the Senate and the Committee on Veterans' Affairs of the House of 
Representatives a report that contains an assessment of the adequacy of 
the authorities available to the Secretary under law to assist eligible 
disabled individuals in acquiring--
            (1) suitable housing units with special fixtures or movable 
        facilities required for their disabilities, and necessary land 
        therefor;
            (2) such adaptations to their residences as are reasonably 
        necessary because of their disabilities; and
            (3) residences already adapted with special features 
        determined by the Secretary to be reasonably necessary as a 
        result of their disabilities.
    (b) Focus on Particular Disabilities.--The report required by 
subsection (a) shall set forth a specific assessment of the needs of--
            (1) veterans who have disabilities that are not described 
        in subsections (a)(2) and (b)(2) of section 2101 of title 38, 
        United States Code; and
            (2) other disabled individuals eligible for specially 
        adapted housing under chapter 21 of such title by reason of 
        section 2101A of such title (as added by section 2602(a) of 
        this Act) who have disabilities that are not described in such 
        subsections.

SEC. 2607. REPORT ON SPECIALLY ADAPTED HOUSING ASSISTANCE FOR 
              INDIVIDUALS WHO RESIDE IN HOUSING OWNED BY A FAMILY 
              MEMBER ON PERMANENT BASIS.

    Not later than December 31, 2008, the Secretary of Veterans Affairs 
shall submit to the Committee on Veterans' Affairs of the Senate and 
the Committee on Veterans' Affairs of the House of Representatives a 
report on the advisability of providing assistance under section 2102A 
of title 38, United States Code, to veterans described in subsection 
(a) of such section, and to members of the Armed Forces covered by such 
section 2102A by reason of section 2101A of title 38, United States 
Code (as added by section 2602(a) of this Act), who reside with family 
members on a permanent basis.

SEC. 2608. DEFINITION OF ANNUAL INCOME FOR PURPOSES OF SECTION 8 AND 
              OTHER PUBLIC HOUSING PROGRAMS.

    Section 3(b)(4) of the United States Housing Act of 1937 (42 U.S.C. 
1437a(3)(b)(4)) is amended by inserting ``or any deferred Department of 
Veterans Affairs disability benefits that are received in a lump sum 
amount or in prospective monthly amounts'' before ``may not be 
considered''.

SEC. 2609. PAYMENT OF TRANSPORTATION OF BAGGAGE AND HOUSEHOLD EFFECTS 
              FOR MEMBERS OF THE ARMED FORCES WHO RELOCATE DUE TO 
              FORECLOSURE OF LEASED HOUSING.

    Section 406 of title 37, United States Code, is amended--
            (1) by redesignating subsections (k) and (l) as subsections 
        (l) and (m), respectively; and
            (2) by inserting after subsection (j) the following new 
        subsection (k):
    ``(k) A member of the armed forces who relocates from leased or 
rental housing by reason of the foreclosure of such housing is entitled 
to transportation of baggage and household effects under subsection 
(b)(1) in the same manner, and subject to the same conditions and 
limitations, as similarly circumstanced members entitled to 
transportation of baggage and household effects under that 
subsection.''.

  TITLE VII--SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK REDUCTION ACT

SEC. 2701. SHORT TITLE.

    This title may be cited as the ``Small Public Housing Authorities 
Paperwork Reduction Act''.

SEC. 2702. PUBLIC HOUSING AGENCY PLANS FOR CERTAIN QUALIFIED PUBLIC 
              HOUSING AGENCIES.

    (a) In General.--Section 5A(b) of the United States Housing Act of 
1937 (42 U.S.C. 1437c-1(b)) is amended by adding at the end the 
following:
            ``(3) Exemption of certain phas from filing requirement.--
                    ``(A) In general.--Notwithstanding paragraph (1) or 
                any other provision of this Act--
                            ``(i) the requirement under paragraph (1) 
                        shall not apply to any qualified public housing 
                        agency; and
                            ``(ii) except as provided in subsection 
                        (e)(4)(B), any reference in this section or any 
                        other provision of law to a `public housing 
                        agency' shall not be considered to refer to any 
                        qualified public housing agency, to the extent 
                        such reference applies to the requirement to 
                        submit an annual public housing agency plan 
                        under this subsection.
                    ``(B) Civil rights certification.--Notwithstanding 
                that qualified public housing agencies are exempt under 
                subparagraph (A) from the requirement under this 
                section to prepare and submit an annual public housing 
                plan, each qualified public housing agency shall, on an 
                annual basis, make the certification described in 
                paragraph (16) of subsection (d), except that for 
                purposes of such qualified public housing agencies, 
                such paragraph shall be applied by substituting `the 
                public housing program of the agency' for `the public 
                housing agency plan'.
                    ``(C) Definition.--For purposes of this section, 
                the term `qualified public housing agency' means a 
                public housing agency that meets the following 
                requirements:
                            ``(i) The sum of (I) the number of public 
                        housing dwelling units administered by the 
                        agency, and (II) the number of vouchers under 
                        section 8(o) of the United States Housing Act 
                        of 1937 (42 U.S.C. 1437f(o)) administered by 
                        the agency, is 550 or fewer.
                            ``(ii) The agency is not designated under 
                        section 6(j)(2) as a troubled public housing 
                        agency, and does not have a failing score under 
                        the section 8 Management Assessment Program 
                        during the prior 12 months.''.
    (b) Resident Participation.--Section 5A of the United States 
Housing Act of 1937 (42 U.S.C. 1437c-1) is amended--
            (1) in subsection (e), by inserting after paragraph (3) the 
        following:
            ``(4) Qualified public housing agencies.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), nothing in this section may be 
                construed to exempt a qualified public housing agency 
                from the requirement under paragraph (1) to establish 1 
                or more resident advisory boards. Notwithstanding that 
                qualified public housing agencies are exempt under 
                subsection (b)(3)(A) from the requirement under this 
                section to prepare and submit an annual public housing 
                plan, each qualified public housing agency shall 
                consult with, and consider the recommendations of the 
                resident advisory boards for the agency, at the annual 
                public hearing required under subsection (f)(5), 
                regarding any changes to the goals, objectives, and 
                policies of that agency.
                    ``(B) Applicability of waiver authority.--Paragraph 
                (3) shall apply to qualified public housing agencies, 
                except that for purposes of such qualified public 
                housing agencies, subparagraph (B) of such paragraph 
                shall be applied by substituting `the functions 
                described in the second sentence of paragraph (4)(A)' 
                for `the functions described in paragraph (2)'.
    ``(f) Public Hearings.--''; and
            (2) in subsection (f) (as so designated by the amendment 
        made by paragraph (1)), by adding at the end the following:
            ``(5) Qualified public housing agencies.--
                    ``(A) Requirement.--Notwithstanding that qualified 
                public housing agencies are exempt under subsection 
                (b)(3)(A) from the requirement under this section to 
                conduct a public hearing regarding the annual public 
                housing plan of the agency, each qualified public 
                housing agency shall annually conduct a public 
                hearing--
                            ``(i) to discuss any changes to the goals, 
                        objectives, and policies of the agency; and
                            ``(ii) to invite public comment regarding 
                        such changes.
                    ``(B) Availability of information and notice.--Not 
                later than 45 days before the date of any hearing 
                described in subparagraph (A), a qualified public 
                housing agency shall--
                            ``(i) make all information relevant to the 
                        hearing and any determinations of the agency 
                        regarding changes to the goals, objectives, and 
                        policies of the agency to be considered at the 
                        hearing available for inspection by the public 
                        at the principal office of the public housing 
                        agency during normal business hours; and
                            ``(ii) publish a notice informing the 
                        public that--
                                    ``(I) the information is available 
                                as required under clause (i); and
                                    ``(II) a public hearing under 
                                subparagraph (A) will be conducted.''.

            TITLE VIII--FORECLOSURE RESCUE FRAUD PROTECTION

SEC. 2801. SHORT TITLE.

    This title may be cited as the ``Foreclosure Rescue Fraud Act of 
2008''.

SEC. 2802. DEFINITIONS.

    In this title:
            (1) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (2) Foreclosure consultant.--The term ``foreclosure 
        consultant''--
                    (A) means a person who makes any solicitation, 
                representation, or offer to a homeowner facing 
                foreclosure on residential real property to perform, 
                for gain, or who performs, for gain, any service that 
                such person represents will prevent, postpone, or 
                reverse the effect of such foreclosure; and
                    (B) does not include--
                            (i) an attorney licensed to practice law in 
                        the State in which the property is located who 
                        has established an attorney-client relationship 
                        with the homeowner;
                            (ii) a person licensed as a real estate 
                        broker or salesperson in the State where the 
                        property is located, and such person engages in 
                        acts permitted under the licensure laws of such 
                        State;
                            (iii) a housing counseling agency approved 
                        by the Secretary;
                            (iv) a depository institution (as defined 
                        in section 3 of the Federal Deposit Insurance 
                        Act (12 U.S.C. 1813));
                            (v) a Federal credit union or a State 
                        credit union (as defined in section 101 of the 
                        Federal Credit Union Act (12 U.S.C. 1752)); or
                            (vi) an insurance company organized under 
                        the laws of any State.
            (3) Homeowner.--The term ``homeowner'', with respect to 
        residential real property for which an action to foreclose on 
        the mortgage or deed of trust on such real property is filed, 
        means the person holding record title to such property as of 
        the date on which such action is filed.
            (4) Loan servicer.--The term ``loan servicer'' has the same 
        meaning as the term ``servicer'' in section 6(i)(2) of the Real 
        Estate Settlement Procedures Act of 1974 (12 U.S.C. 
        2605(i)(2)).
            (5) Residential mortgage loan.--The term ``residential 
        mortgage loan'' means any loan primarily for personal, family, 
        or household use that is secured by a mortgage, deed of trust, 
        or other equivalent consensual security interest on a dwelling 
        (as defined in section 103(v) of the Truth in Lending Act (15 
        U.S.C. 1602)(v)) or residential real estate upon which is 
        constructed or intended to be constructed a dwelling (as so 
        defined).
            (6) Residential real property.--The term ``residential real 
        property'' has the meaning given the term ``dwelling'' in 
        section 103 of the Consumer Credit Protection Act (15 U.S.C. 
        1602).
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.

SEC. 2803. MORTGAGE RESCUE FRAUD PROTECTION.

    (a) Limits on Foreclosure Consultants.--A foreclosure consultant 
may not--
            (1) claim, demand, charge, collect, or receive any 
        compensation from a homeowner for services performed by such 
        foreclosure consultant with respect to residential real 
        property until such foreclosure consultant has fully performed 
        each service that such foreclosure consultant contracted to 
        perform or represented would be performed with respect to such 
        residential real property;
            (2) hold any power of attorney from any homeowner, except 
        to inspect documents, as provided by applicable law;
            (3) receive any consideration from a third party in 
        connection with services rendered to a homeowner by such third 
        party with respect to the foreclosure of residential real 
        property, unless such consideration is fully disclosed, in a 
        clear and conspicuous manner, to such homeowner in writing 
        before such services are rendered;
            (4) accept any wage assignment, any lien of any type on 
        real or personal property, or other security to secure the 
        payment of compensation with respect to services provided by 
        such foreclosure consultant in connection with the foreclosure 
        of residential real property; or
            (5) acquire any interest, directly or indirectly, in the 
        residence of a homeowner with whom the foreclosure consultant 
        has contracted.
    (b) Contract Requirements.--
            (1) Written contract required.--Notwithstanding any other 
        provision of law, a foreclosure consultant may not provide to a 
        homeowner a service related to the foreclosure of residential 
        real property--
                    (A) unless--
                            (i) a written contract for the purchase of 
                        such service has been signed and dated by the 
                        homeowner; and
                            (ii) such contract complies with the 
                        requirements described in paragraph (2); and
                    (B) before the end of the 3-business-day period 
                beginning on the date on which the contract is signed.
            (2) Terms and conditions of contract.--The requirements 
        described in this paragraph, with respect to a contract, are as 
        follows:
                    (A) The contract includes, in writing--
                            (i) a full and detailed description of the 
                        exact nature of the contract and the total 
                        amount and terms of compensation;
                            (ii) the name, physical address, phone 
                        number, email address, and facsimile number, if 
                        any, of the foreclosure consultant to whom a 
                        notice of cancellation can be mailed or sent 
                        under subsection (d); and
                            (iii) a conspicuous statement in at least 
                        12 point bold face type in immediate proximity 
                        to the space reserved for the homeowner's 
                        signature on the contract that reads as 
                        follows: ``You may cancel this contract without 
                        penalty or obligation at any time before 
                        midnight of the 3rd business day after the date 
                        on which you sign the contract. See the 
                        attached notice of cancellation form for an 
                        explanation of this right.''.
                    (B) The contract is written in the principal 
                language used to solicit or market the services to the 
                homeowner.
                    (C) The contract is accompanied by the form 
                required by subsection (c)(2).
    (c) Right To Cancel Contract.--
            (1) In general.--With respect to a contract between a 
        homeowner and a foreclosure consultant regarding the 
        foreclosure on the residential real property of such homeowner, 
        such homeowner may cancel such contract without penalty or 
        obligation by mailing a notice of cancellation not later than 
        midnight of the 3rd business day after the date on which such 
        contract is executed or would become enforceable against the 
        parties to such contract.
            (2) Cancellation form and other information.--Each contract 
        described in paragraph (1) shall be accompanied by a form, in 
        duplicate, that--
                    (A) has the heading ``Notice of Cancellation'' in 
                boldface type; and
                    (B) contains in boldface type the following 
                statement:
            ``You may cancel this contract, without any penalty or 
        obligation, at any time before midnight of the 3rd day after 
        the date on which the contract is signed by you.
            ``To cancel this contract, mail or deliver a signed and 
        dated copy of this cancellation notice or any other equivalent 
        written notice to [insert name of foreclosure consultant] at 
        [insert address of foreclosure consultant] before midnight on 
        [insert date].
            ``I hereby cancel this transaction on [insert date] [insert 
        homeowner signature].''.
    (d) Waiver of Rights and Protections Prohibited.--
            (1) In general.--A waiver by a homeowner of any protection 
        provided by this section or any right of a homeowner under this 
        section--
                    (A) shall be treated as void; and
                    (B) may not be enforced by any Federal or State 
                court or by any person.
            (2) Attempt to obtain a waiver.--Any attempt by any person 
        to obtain a waiver from any homeowner of any protection 
        provided by this section or any right of the homeowner under 
        this section shall be treated as a violation of this section.
            (3) Contracts not in compliance.--Any contract that does 
        not comply with the applicable provisions of this title shall 
        be void and may not be enforceable by any party.

SEC. 2804. WARNINGS TO HOMEOWNERS OF FORECLOSURE RESCUE SCAMS.

    (a) In General.--If a loan servicer finds that a homeowner has 
failed to make 2 consecutive payments on a residential mortgage loan 
and such loan is at risk of being foreclosed upon, the loan servicer 
shall notify such homeowner of the dangers of fraudulent activities 
associated with foreclosure.
    (b) Notice Requirements.--Each notice provided under subsection (a) 
shall--
            (1) be in writing;
            (2) be included with a mailing of account information;
            (3) have the heading ``Notice Required by Federal Law'' in 
        a 14-point boldface type in English and Spanish at the top of 
        such notice; and
            (4) contain the following statement in English and Spanish: 
        ``Mortgage foreclosure is a complex process. Some people may 
        approach you about saving your home. You should be careful 
        about any such promises. There are government and nonprofit 
        agencies you may contact for helpful information about the 
        foreclosure process. Contact your lender immediately at [____], 
        call the Department of Housing and Urban Development Housing 
        Counseling Line at (800) 569-4287 to find a housing counseling 
        agency certified by the Department to assist you in avoiding 
        foreclosure, or visit the Department's Tips for Avoiding 
        Foreclosure website at http://www.hud.gov/foreclosure for 
        additional assistance.'' (the blank space to be filled in by 
        the loan servicer and successor telephone numbers and Uniform 
        Resource Locators (URLs) for the Department of Housing and 
        Urban Development Housing Counseling Line and Tips for Avoiding 
        Foreclosure website, respectively).

SEC. 2805. CIVIL LIABILITY.

    (a) In General.--Any foreclosure consultant who fails to comply 
with any provision of section 2803 or 2804 with respect to any other 
person shall be liable to such person in an amount equal to the greater 
of--
            (1) the amount of any actual damage sustained by such 
        person as a result of such failure; or
            (2) any amount paid by the person to the foreclosure 
        consultant.
    (b) Class Actions Prohibited.--No Federal court may certify a civil 
action under subsection (a) as a class action under rule 23 of the 
Federal Rules of Civil Procedure.

SEC. 2806. ADMINISTRATIVE ENFORCEMENT.

    (a) Enforcement by Federal Trade Commission.--
            (1) Unfair or deceptive act or practice.--A violation of a 
        prohibition described in section 2803 or a failure to comply 
        with any provision of section 2803 or 2804 shall be treated as 
        a violation of a rule defining an unfair or deceptive act or 
        practice described under section 18(a)(1)(B) of the Federal 
        Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
            (2) Actions by the federal trade commission.--The Federal 
        Trade Commission shall enforce the provisions of sections 2803 
        and 2804 in the same manner, by the same means, and with the 
        same jurisdiction, powers, and duties as though all applicable 
        terms and provisions of the Federal Trade Commission Act (15 
        U.S.C. 41 et seq.) were incorporated into and made part of this 
        title.
    (b) State Action for Violations.--
            (1) Authority of states.--In addition to such other 
        remedies as are provided under State law, whenever the chief 
        law enforcement officer of a State, or an official or agency 
        designated by a State, has reason to believe that any person 
        has violated or is violating the provisions of section 2803 or 
        2804, the State--
                    (A) may bring an action to enjoin such violation;
                    (B) may bring an action on behalf of its residents 
                to recover damages for which the person is liable to 
                such residents under section 2805 as a result of the 
                violation; and
                    (C) in the case of any successful action under 
                subparagraph (A) or (B), shall be awarded the costs of 
                the action.
            (2) Rights of federal trade commission.--
                    (A) Notice to commission.--The State shall serve 
                prior written notice of any civil action under 
                paragraph (1) upon the Commission and provide the 
                Commission with a copy of its complaint, except in any 
                case in which such prior notice is not feasible, in 
                which case the State shall serve such notice 
                immediately upon instituting such action.
                    (B) Intervention.--The Commission shall have the 
                right--
                            (i) to intervene in any action referred to 
                        in subparagraph (A);
                            (ii) upon so intervening, to be heard on 
                        all matters arising in the action; and
                            (iii) to file petitions for appeal in such 
                        actions.
            (3) Investigatory powers.--For purposes of bringing any 
        action under this subsection, nothing in this subsection shall 
        prevent the chief law enforcement officer, or an official or 
        agency designated by a State, from exercising the powers 
        conferred on the chief law enforcement officer or such official 
        by the laws of such State to conduct investigations or to 
        administer oaths or affirmations, or to compel the attendance 
        of witnesses or the production of documentary and other 
        evidence.
            (4) Limitation.--Whenever the Federal Trade Commission has 
        instituted a civil action for a violation of section 2803 or 
        2804, no State may, during the pendency of such action, bring 
        an action under this section against any defendant named in the 
        complaint of the Commission for any violation of section 2803 
        or 2804 that is alleged in that complaint.

SEC. 2807. LIMITATION.

    No violation of a prohibition described in section 2803 or a 
failure to comply with any provision of section 2803 or 2804 shall 
provide grounds for the halt, delay, or modification of a foreclosure 
process or proceeding.

SEC. 2808. PREEMPTION.

    Nothing in this title affects any provision of State or local law 
respecting any foreclosure consultant, residential mortgage loan, or 
residential real property that provides equal or greater protection to 
homeowners than what is provided under this title.

                   DIVISION C--TAX-RELATED PROVISIONS

SECTION 3000. SHORT TITLE; ETC.

    (a) Short Title.--This division may be cited as the ``Housing 
Assistance Tax Act of 2008''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this division 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.

                    TITLE I--HOUSING TAX INCENTIVES

                    Subtitle A--Multi-Family Housing

                 PART I--LOW-INCOME HOUSING TAX CREDIT

SEC. 3001. 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--
                            ``(i) 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, and
                            ``(ii) the dollar amount in effect under 
                        subparagraph (C)(ii)(II) for such calendar year 
                        (after any increase under subparagraph (H)) 
                        shall be increased by an amount equal to 10 
                        percent of such dollar amount (rounded to the 
                        next lowest multiple of $5,000).''.

SEC. 3002. DETERMINATION OF CREDIT RATE.

    (a) Temporary Minimum Credit Rate for Non-Federally Subsidized New 
Buildings.--Subsection (b) of section 42 is amended by redesignating 
paragraph (3) as paragraph (4) and by inserting after paragraph (2) the 
following new paragraph:
            ``(3) Temporary minimum credit rate for non-federally 
        subsidized new buildings.--In the case of any new building--
                    ``(A) which is placed in service by the taxpayer 
                after the date of the enactment of this paragraph and 
                before December 31, 2013, and
                    ``(B) which is not federally subsidized for the 
                taxable year,
        the applicable percentage shall not be less than 9 percent.''.
    (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. 3003. 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 (g), 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) 25 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 $15,000,000, 
                                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 (g)(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) Exception to 10-Year Nonacquisition Period for Existing 
Buildings Applicable to Federally- or State-Assisted Buildings.--
Paragraph (6) of section 42(d) is amended to read as follows:
            ``(6) Credit allowable for certain buildings acquired 
        during 10-year period described in paragraph (2)(B)(ii).--
                    ``(A) In general.--Paragraph (2)(B)(ii) shall not 
                apply to any Federally- or State-assisted building.
                    ``(B) Buildings acquired from insured depository 
                institutions in default.--On application by the 
                taxpayer, the Secretary may waive paragraph (2)(B)(ii) 
                with respect to any building acquired from an insured 
                depository institution in default (as defined in 
                section 3 of the Federal Deposit Insurance Act) or from 
                a receiver or conservator of such an institution.
                    ``(C) Federally- or state-assisted building.--For 
                purposes of this paragraph--
                            ``(i) Federally-assisted building.--The 
                        term `Federally-assisted building' means any 
                        building which is substantially assisted, 
                        financed, or operated under section 8 of the 
                        United States Housing Act of 1937, section 
                        221(d)(3), 221(d)(4), or 236 of the National 
                        Housing Act, or section 515 of the Housing Act 
                        of 1949 (as such Acts are in effect on the date 
                        of the enactment of the Tax Reform Act of 
                        1986).
                            ``(ii) State-assisted building.--The term 
                        `State-assisted building' means any building 
                        which is substantially assisted, financed, or 
                        operated under any State law similar in 
                        purposes to any of the laws referred to in 
                        clause (i).''.
    (g) 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).
    (h) Effective Date.--
            (1) In general.--Except as otherwise provided in paragraph 
        (2), the amendments made by this subsection shall apply to 
        buildings placed in service after the date of the enactment of 
        this Act.
            (2) Rehabilitation requirements.--
                    (A) In general.--The amendments made by subsection 
                (b) shall apply with respect to housing credit dollar 
                amounts allocated after the date of the enactment of 
                this Act.
                    (B) Buildings not subject to allocation limits.--To 
                the extent paragraph (1) of section 42(h) of the 
                Internal Revenue Code of 1986 does not apply to any 
                building by reason of paragraph (4) thereof, the 
                amendments made by subsection (b) shall apply to 
                buildings placed in service after the date of the 
                enactment of this Act.

SEC. 3004. 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) Clarification of General Public Use Requirement.--Subsection 
(c) of section 42 is amended by adding at the end the following new 
paragraph:
            ``(3) Clarification of general public use requirement.--
                    ``(A) In general.--A building which meets the 
                requirements of subparagraph (B) shall not fail to be 
                treated as a qualified low-income building solely 
                because occupancy in such building is restricted to 
                individuals who have special needs, share a common 
                occupation or common interests, or are members of a 
                specified group based on Federal, State, or local 
                programs or requirements.
                    ``(B) Basic public use requirements.--A building 
                meets the requirements of this subparagraph if--
                            ``(i) such building is used consistent with 
                        housing policy governing non-discrimination as 
                        evidenced by rules and regulations of the 
                        Department of Housing and Urban Development,
                            ``(ii) occupancy in such building is not 
                        restricted on the basis of membership in a 
                        social organization or on the basis of 
                        employment by specific employers, and
                            ``(iii) such building is not part of a 
                        hospital, nursing home, sanitarium, lifecare 
                        facility, trailer park, or intermediate care 
                        facility for the mentally or physically 
                        handicapped.''.
    (h) GAO Study Regarding Modifications to Low-Income Housing Tax 
Credit.--Not later than December 31, 2012, the Comptroller General of 
the United States shall submit to Congress a report which analyzes the 
implementation of the modifications made by this subtitle to the low-
income housing tax credit under section 42 of the Internal Revenue Code 
of 1986. Such report shall include an analysis of the distribution of 
credit allocations before and after the effective date of such 
modifications.
    (i) 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.
            (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.
            (6) Clarification of general public use requirement.--The 
        amendment made by subsection (g) shall apply to buildings 
        placed in service before, on, or after the date of the 
        enactment of this Act.

SEC. 3005. TREATMENT OF MILITARY BASIC PAY.

    (a) In General.--Subparagraph (B) of section 142(d)(2) (relating to 
income of individuals; area median gross income) is amended--
            (1) by striking ``The income'' and inserting the following:
                            ``(i) In general.--The income'', and
            (2) by adding at the end the following:
                            ``(ii) Special rule relating to basic 
                        housing allowances.--For purposes of 
                        determining income under this subparagraph, 
                        payments under section 403 of title 37, United 
                        States Code, as a basic pay allowance for 
                        housing shall be disregarded with respect to 
                        any qualified building.
                            ``(iii) Qualified building.--For purposes 
                        of clause (ii), the term `qualified building' 
                        means any building located--
                                    ``(I) in any county in which is 
                                located a qualified military 
                                installation to which the number of 
                                members of the Armed Forces of the 
                                United States assigned to units based 
                                out of such qualified military 
                                installation, as of June 1, 2008, has 
                                increased by not less than 20 percent, 
                                as compared to such number on December 
                                31, 2005, or
                                    ``(II) in any county adjacent to a 
                                county described in subclause (I).
                            ``(iv) Qualified military installation.--
                        For purposes of clause (iii), the term 
                        `qualified military installation' means any 
                        military installation or facility the number of 
                        members of the Armed Forces of the United 
                        States assigned to which, as of June 1, 2008, 
                        is not less than 1,000.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to--
            (1) determinations made after the date of the enactment of 
        this Act and before January 1, 2012, in the case of any 
        qualified building (as defined in section 142(d)(2)(B)(iii) of 
        the Internal Revenue Code of 1986)--
                    (A) with respect to which housing credit dollar 
                amounts have been allocated before the date of the 
                enactment of this Act, or
                    (B) with respect to buildings placed in service 
                before such date of enactment, to the extent paragraph 
                (1) of section 42(h) of such Code does not apply to 
                such building by reason of paragraph (4) thereof, but 
                only with respect to bonds issued before such date of 
                enactment, and
            (2) determinations made after the date of enactment of this 
        Act, in the case of qualified buildings (as so defined)--
                    (A) with respect to which housing credit dollar 
                amounts are allocated after the date of the enactment 
                of this Act and before January 1, 2012, or
                    (B) with respect to which buildings placed in 
                service after the date of enactment of this Act and 
                before January 1, 2012, to the extent paragraph (1) of 
                section 42(h) of such Code does not apply to such 
                building by reason of paragraph (4) thereof, but only 
                with respect to bonds issued after such date of 
                enactment and before January 1, 2012.

        PART II--MODIFICATIONS TO TAX-EXEMPT HOUSING BOND RULES

SEC. 3007. 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. 3008. 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 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.

  PART III--REFORMS RELATED TO THE LOW-INCOME HOUSING CREDIT AND TAX-
                          EXEMPT HOUSING BONDS

SEC. 3009. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS INCOME.

    (a) In General.--Paragraph (2) of section 142(d), as amended by 
section 3008, is 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. 3010. 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.

                   Subtitle B--Single Family Housing

SEC. 3011. 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 $8,000.
                    ``(B) Married individuals filing separately.--In 
                the case of a married individual filing a separate 
                return, subparagraph (A) shall be applied by 
                substituting `$4,000' for `$8,000'.
                    ``(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 
                $8,000.
            ``(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) $75,000 ($150,000 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. 3012. 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:
            ``(8) Real property tax deduction.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the real property tax deduction is the lesser of--
                            ``(i) the amount allowable as a deduction 
                        under this chapter for State and local taxes 
                        described in section 164(a)(1), or
                            ``(ii) $500 ($1,000 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.
                    ``(B) Exception.--The real property tax deduction 
                shall not be allowed in the case of a taxpayer living 
                in a jurisdiction in which the rate of tax for all 
                residential real property taxes is increased, net of 
                any tax rebates, through rate increases or the repeal 
                or reduction of otherwise applicable deductions, 
                credits, or offsets, at any time after the date of the 
                enactment of this paragraph and before December 31, 
                2008. This subparagraph shall not apply in the case of 
                a jurisdiction in which the rate of tax for all 
                residential real property taxes is increased pursuant 
                to an equalization policy in effect before the date of 
                the enactment of this paragraph or as a result of any 
                votes of the residents of such jurisdiction to increase 
                funding for pre-school, primary, secondary, or higher 
                education.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.

                     Subtitle C--General Provisions

SEC. 3021. 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 $11,000,000,000 
                multiplied by a fraction--
                            ``(i) the numerator of which is the State 
                        ceiling applicable to the State for calendar 
                        year 2008, determined without regard to this 
                        paragraph, and
                            ``(ii) the denominator of which is the sum 
                        of the State ceilings determined under clause 
                        (i) for 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. 3022. 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. 3023. 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) subject to subparagraph (E), 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 clause 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. 3024. 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. 3025. 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.

SEC. 3026. EXTENSION OF SPECIAL RULE FOR MORTGAGE REVENUE BONDS FOR 
              RESIDENCES LOCATED IN DISASTER AREAS.

    (a) In General.--Paragraph (11) of section 143(k) is amended--
            (1) by striking ``December 31, 1996'' and inserting ``May 
        1, 2008'', and
            (2) by striking ``January 1, 1999'' and inserting ``January 
        1, 2010''.
    (b) Effective Date.--The amendments made by this section shall 
apply to bonds issued after May 1, 2008.

       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

      Subtitle A--Foreign Currency and Other Qualified Activities

SEC. 3031. REVISIONS TO REIT INCOME TESTS.

    (a) Foreign Currency Gains Not Gross Income in Applying REIT Income 
Tests.--Section 856 (defining real estate investment trust) is amended 
by adding at the end the following new subsection:
    ``(n) Rules Regarding Foreign Currency Transactions.--
            ``(1) In general.--For purposes of this part--
                    ``(A) passive foreign exchange gain for any taxable 
                year shall not constitute gross income for purposes of 
                subsection (c)(2), and
                    ``(B) real estate foreign exchange gain for any 
                taxable year shall not constitute gross income for 
                purposes of subsection (c)(3).
            ``(2) Real estate foreign exchange gain.--For purposes of 
        this subsection, the term `real estate foreign exchange gain' 
        means--
                    ``(A) foreign currency gain (as defined in section 
                988(b)(1)) which is attributable to--
                            ``(i) any item of income or gain described 
                        in subsection (c)(3),
                            ``(ii) the acquisition or ownership of 
                        obligations secured by mortgages on real 
                        property or on interests in real property 
                        (other than foreign currency gain attributable 
                        to any item of income or gain 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 gain attributable 
                        to any item of income or gain described in 
                        clause (i)),
                    ``(B) section 987 gain 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) 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 gain as determined 
                by the Secretary.
            ``(3) Passive foreign exchange gain.--For purposes of this 
        subsection, the term `passive foreign exchange gain' means--
                    ``(A) real estate foreign exchange gain,
                    ``(B) foreign currency gain (as defined in section 
                988(b)(1)) which is not described in subparagraph (A) 
                and which is attributable to--
                            ``(i) any item of income or gain described 
                        in subsection (c)(2),
                            ``(ii) the acquisition or ownership of 
                        obligations (other than foreign currency gain 
                        attributable to any item of income or gain 
                        described in clause (i)), or
                            ``(iii) becoming or being the obligor under 
                        obligations (other than foreign currency gain 
                        attributable to any item of income or gain 
                        described in clause (i)), and
                    ``(C) any other foreign currency gain as determined 
                by the Secretary.
            ``(4) Exception for income from substantial and regular 
        trading.--Notwithstanding this subsection or any other 
        provision of this part, any section 988 gain derived by a 
        corporation, trust, or association from engaging in substantial 
        and regular trading or dealing in securities (as defined in 
        section 475(c)(2)) shall constitute gross income which does not 
        qualify under paragraph (2) or (3) of subsection (c). This 
        paragraph shall not apply to income which does not constitute 
        gross income by reason of subsection (c)(5)(G).''.
    (b) 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 
                        of income or gain described in paragraph (2) or 
                        (3) (or any property which generates such 
                        income or gain), 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).''.
    (c) Authority To Exclude Items of Income From REIT Income Tests.--
Section 856(c)(5), as amended by the Heartland, Habitat, Harvest, and 
Horticulture Act of 2008, is amended by adding at the end the following 
new subparagraph:
                    ``(J) Secretarial authority to exclude other items 
                of income.--To the extent necessary to carry out the 
                purposes of this part, the Secretary is authorized to 
                determine, solely for purposes of this part, whether 
                any item of income or gain which--
                            ``(i) does not otherwise qualify under 
                        paragraph (2) or (3) may be considered as not 
                        constituting gross income, or
                            ``(ii) otherwise constitutes gross income 
                        not qualifying under paragraph (2) or (3) may 
                        be considered as gross income which qualifies 
                        under paragraph (2) or (3).''.

SEC. 3032. 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 3031(c), is amended by adding at the 
end the following new subparagraph:
                    ``(K) Cash.--If the real estate investment trust or 
                its qualified business unit (as defined in section 989) 
                uses any foreign currency as its functional currency 
                (as defined in section 985(b)), the term `cash' 
                includes such foreign currency but only to the extent 
                such foreign currency--
                            ``(i) is held for use in the normal course 
                        of the activities of the trust or qualified 
                        business unit which give rise to items of 
                        income or gain described in paragraph (2) or 
                        (3) of subsection (c) or are directly related 
                        to acquiring or holding assets described in 
                        subsection (c)(4), and
                            ``(ii) is not held in connection with an 
                        activity described in subsection (n)(4).''.

SEC. 3033. 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;''.

                 Subtitle B--Taxable REIT Subsidiaries

SEC. 3041. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.

    Section 856(c)(4)(B)(ii) is amended--
            (1) by striking ``20 percent'' and inserting ``25 
        percent'', and
            (2) by striking ``REIT subsidiaries'' and all that follows, 
        and inserting ``REIT subsidiaries,''.

                        Subtitle C--Dealer Sales

SEC. 3051. 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. 3052. 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,''.

                     Subtitle D--Health Care REITs

SEC. 3061. 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 (as 
                defined in paragraph (9)(D)) 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--
                            ``(i) directly or indirectly possesses a 
                        license, permit, or similar instrument enabling 
                        it to do so, or
                            ``(ii) employs individuals working at such 
                        facility or property located outside the United 
                        States, but only if an eligible independent 
                        contractor is responsible for the daily 
                        supervision and direction of such individuals 
                        on behalf of the taxable REIT subsidiary 
                        pursuant to a management agreement or similar 
                        service contract.''.
    (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''.

                      Subtitle E--Effective Dates

SEC. 3071. EFFECTIVE DATES.

    (a) In General.--Except as otherwise provided in this section, the 
amendments made by this title shall apply to taxable years beginning 
after the date of the enactment of this Act.
    (b) REIT Income Tests.--
            (1) The amendments made by section 3031(a) and (c) shall 
        apply to gains and items of income recognized after the date of 
        the enactment of this Act.
            (2) The amendment made by section 3031(b) shall apply to 
        transactions entered into after the date of the enactment of 
        this Act.
    (c) Conforming Foreign Currency Revisions.--
            (1) The amendment made by section 3033(a) shall apply to 
        gains recognized after the date of the enactment of this Act.
            (2) The amendment made by section 3033(b) shall apply to 
        gains and deductions recognized after the date of the enactment 
        of this Act.
    (d) Dealer Sales.--The amendments made by subtitle C shall apply to 
sales made after the date of the enactment of this Act.

                     TITLE III--REVENUE PROVISIONS

                     Subtitle A--General Provisions

SEC. 3081. ELECTION TO ACCELERATE AMT AND R AND D CREDITS IN LIEU OF 
              BONUS DEPRECIATION.

    (a) In General.--Section 168(k) is amended by adding at the end the 
following new paragraph:
            ``(4) Election to accelerate amt and r and d credits in 
        lieu of bonus depreciation.--
                    ``(A) In general.--If a corporation elects to have 
                this paragraph apply--
                            ``(i) no additional depreciation shall be 
                        allowed under paragraph (1) for any eligible 
                        qualified property placed in service during any 
                        taxable year to which paragraph (1) would 
                        otherwise apply,
                            ``(ii) the applicable depreciation method 
                        used under this section with respect to such 
                        eligible qualified property shall be the 
                        straight line method rather than the method 
                        that would otherwise be used, and
                            ``(iii) the limitations described in 
                        subparagraph (B) for such taxable year shall be 
                        increased by an aggregate amount not in excess 
                        of the bonus depreciation amount for such 
                        taxable year.
                    ``(B) Limitations to be increased.--The limitations 
                described in this subparagraph are--
                            ``(i) the limitation under section 38(c), 
                        and
                            ``(ii) the limitation under section 53(c).
                    ``(C) Bonus depreciation amount.--For purposes of 
                this paragraph--
                            ``(i) In general.--The bonus depreciation 
                        amount for any applicable taxable year is an 
                        amount equal to the product of 20 percent and 
                        the excess (if any) of--
                                    ``(I) the aggregate amount of 
                                depreciation which would be determined 
                                under this section for property placed 
                                in service during the taxable year if 
                                no election under this paragraph were 
                                made, over
                                    ``(II) the aggregate amount of 
                                depreciation allowable under this 
                                section for property placed in service 
                                during the taxable year.
                        In the case of property which is a passenger 
                        aircraft, the amount determined under subclause 
                        (I) shall be calculated without regard to the 
                        written binding contract limitation under 
                        paragraph (2)(A)(iii)(I).
                            ``(ii) Maximum amount.--The bonus 
                        depreciation amount for any applicable taxable 
                        year shall not exceed the applicable limitation 
                        under clause (iii), reduced (but not below 
                        zero) by the bonus depreciation amount for any 
                        preceding taxable year.
                            ``(iii) Applicable limitation.--For 
                        purposes of clause (ii), the term `applicable 
                        limitation' means, with respect to any eligible 
                        taxpayer, the lesser of--
                                    ``(I) $30,000,000, or
                                    ``(II) 6 percent of the sum of the 
                                amounts determined with respect to the 
                                taxpayer under clauses (ii) and (iii) 
                                of subparagraph (E).
                            ``(iv) Aggregation rule.--All corporations 
                        which are treated as a single employer under 
                        section 52(a) shall be treated as 1 taxpayer 
                        for purposes of applying the limitation under 
                        this subparagraph and determining the 
                        applicable limitation under clause (iii).
                    ``(D) Eligible qualified property.--For purposes of 
                this paragraph, the term `eligible qualified property' 
                means qualified property under paragraph (2), except 
                that in applying paragraph (2) for purposes of this 
                clause--
                            ``(i) `March 31, 2008' shall be substituted 
                        for `December 31, 2007' each place it appears 
                        in subparagraph (A) and clauses (i) and (ii) of 
                        subparagraph (E) thereof,
                            ``(ii) only adjusted basis attributable to 
                        manufacture, construction, or production after 
                        March 31, 2008, and before January 1, 2009, 
                        shall be taken into account under subparagraph 
                        (B)(ii) thereof, and
                            ``(iii) in the case of property which is a 
                        passenger aircraft, the written binding 
                        contract limitation under subparagraph 
                        (A)(iii)(I) thereof shall not apply.
                    ``(E) Allocation of bonus depreciation amounts.--
                            ``(i) In general.--Subject to clauses (ii) 
                        and (iii), the taxpayer shall, at such time and 
                        in such manner as the Secretary may prescribe, 
                        specify the portion (if any) of the bonus 
                        depreciation amount which is to be allocated to 
                        each of the limitations described in 
                        subparagraph (B).
                            ``(ii) Business credit limitation.--The 
                        portion of the bonus depreciation amount 
                        allocated to the limitation described in 
                        subparagraph (B)(i) shall not exceed an amount 
                        equal to the portion of the credit allowable 
                        under section 38 for the taxable year which is 
                        allocable to business credit carryforwards to 
                        such taxable year which are--
                                    ``(I) from taxable years beginning 
                                before January 1, 2006, and
                                    ``(II) properly allocable 
                                (determined under the rules of section 
                                38(d)) to the research credit 
                                determined under section 41(a).
                            ``(iii) Alternative minimum tax credit 
                        limitation.--The portion of the bonus 
                        depreciation amount allocated to the limitation 
                        described in subparagraph (B)(ii) shall not 
                        exceed an amount equal to the portion of the 
                        minimum tax credit allowable under section 53 
                        for the taxable year which is allocable to the 
                        adjusted minimum tax imposed for taxable years 
                        beginning before January 1, 2006. For purposes 
                        of the preceding sentence, credits shall be 
                        treated as allowed on a first-in, first-out 
                        basis.
                    ``(F) Credit refundable.--Any aggregate increases 
                in the credits allowed under section 38 or 53 by reason 
                of this paragraph shall, for purposes of this title, be 
                treated as a credit allowed to the taxpayer under 
                subpart C of part IV of subchapter A.
                    ``(G) Other rules.--
                            ``(i) Election.--Any election under this 
                        paragraph (including any allocation under 
                        subparagraph (E)) may be revoked only with the 
                        consent of the Secretary.
                            ``(ii) Deduction allowed in computing 
                        minimum tax.--Notwithstanding this paragraph, 
                        paragraph (2)(G) shall apply with respect to 
                        the deduction computed under this section 
                        (after application of this paragraph) with 
                        respect to property placed in service during 
                        any applicable taxable year.''.
    (b) Application to Certain Automotive Partnerships.--
            (1) In general.--If an applicable partnership elects the 
        application of this subsection--
                    (A) the partnership shall be treated as having made 
                a payment against the tax imposed by chapter 1 of the 
                Internal Revenue Code of 1986 for any applicable 
                taxable year of the partnership in the amount 
                determined under paragraph (3),
                    (B) in the case of any eligible qualified property 
                placed in service by the partnership during any 
                applicable taxable year--
                            (i) section 168(k) of such Code shall not 
                        apply in determining the amount of the 
                        deduction allowable to the partnership or any 
                        partner with respect to such property under 
                        section 168 of such Code,
                            (ii) the applicable depreciation method 
                        used by the partnership or any partner under 
                        such section with respect to such property 
                        shall be the straight line method rather than 
                        the method that would otherwise be used,
                    (C) no election may be made under section 168(k)(4) 
                of such Code with respect to the partnership, and
                    (D) the amount of the credit determined under 
                section 41 of such Code for any applicable taxable year 
                with respect to the partnership shall be reduced by the 
                amount of the deemed payment under subparagraph (A) for 
                the taxable year.
            (2) Treatment of deemed payment.--
                    (A) In general.--Notwithstanding any other 
                provision of the Internal Revenue Code of 1986, the 
                Secretary of the Treasury or his delegate shall not use 
                the payment of tax described in paragraph (1) as an 
                offset or credit against any tax liability of the 
                applicable partnership or any partner but shall refund 
                such payment to the applicable partnership.
                    (B) No interest.--The payment described in 
                paragraph (1) shall not be taken into account in 
                determining any amount of interest under such Code.
            (3) Amount of deemed payment.--The amount determined under 
        this paragraph for any applicable taxable year shall be the 
        least of the following:
                    (A) The amount which would be determined for the 
                taxable year under section 168(k)(4)(C)(i) of the 
                Internal Revenue Code of 1986 (as added by the 
                amendments made by this section) if an election under 
                such section were in effect with respect to the 
                partnership.
                    (B) The amount of the credit determined under 
                section 41 of such Code for the taxable year with 
                respect to the partnership.
                    (C) $30,000,000, reduced by the amount of any 
                payment under this subsection for any preceding taxable 
                year.
            (4) Definitions.--For purposes of this subsection--
                    (A) Applicable partnership.--The term ``applicable 
                partnership'' means a domestic partnership that--
                            (i) was formed effective on August 3, 2007, 
                        and
                            (ii) will produce in excess of 675,000 
                        automobiles during the period beginning on 
                        January 1, 2008, and ending on June 30, 2008.
                    (B) Applicable taxable year.--The term ``applicable 
                taxable year'' means any taxable year during which 
                eligible qualified property is placed in service.
                    (C) Eligible qualified property.--The term 
                ``eligible qualified property'' has the meaning given 
                such term by section 168(k)(4)(D) of the Internal 
                Revenue Code of 1986 (as added by the amendments made 
                by this section).
    (c) Conforming Amendment.--Section 1324(b)(2) of title 31, United 
States Code, as amended by this Act, is amended--
            (1) by inserting ``168(k)(4)(F),'' after ``36,'', and
            (2) by inserting ``, or due under section 3081(b)(2) of the 
        Housing Assistance Tax Act of 2008'' before the period at the 
        end.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after March 31, 2008.

SEC. 3082. CERTAIN GO ZONE INCENTIVES.

    (a) Use of Amended Income Tax Returns To Take Into Account Receipt 
of Certain Hurricane-Related Casualty Loss Grants by Disallowing 
Previously Taken Casualty Loss Deductions.--
            (1) In general.--Notwithstanding any other provision of the 
        Internal Revenue Code of 1986, if a taxpayer claims a deduction 
        for any taxable year with respect to a casualty loss to a 
        principal residence (within the meaning of section 121 of such 
        Code) resulting from Hurricane Katrina, Hurricane Rita, or 
        Hurricane Wilma and in a subsequent taxable year receives a 
        grant under Public Law 109-148, 109-234, or 110-116 as 
        reimbursement for such loss, such taxpayer may elect to file an 
        amended income tax return for the taxable year in which such 
        deduction was allowed (and for any taxable year to which such 
        deduction is carried) and reduce (but not below zero) the 
        amount of such deduction by the amount of such reimbursement.
            (2) Time of filing amended return.--Paragraph (1) shall 
        apply with respect to any grant only if any amended income tax 
        returns with respect to such grant are filed not later than the 
        later of--
                    (A) the due date for filing the tax return for the 
                taxable year in which the taxpayer receives such grant, 
                or
                    (B) the date which is 1 year after the date of the 
                enactment of this Act.
            (3) Waiver of penalties and interest.--Any underpayment of 
        tax resulting from the reduction under paragraph (1) of the 
        amount otherwise allowable as a deduction shall not be subject 
        to any penalty or interest under such Code if such tax is paid 
        not later than 1 year after the filing of the amended return to 
        which such reduction relates.
    (b) Waiver of Deadline on Construction of GO Zone Property Eligible 
for Bonus Depreciation.--
            (1) In general.--Subparagraph (B) of section 1400N(d)(3) is 
        amended to read as follows:
                    ``(B) without regard to `and before January 1, 
                2009' in clause (i) thereof, and''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to property placed in service after December 31, 
        2007.
    (c) Inclusion of Certain Counties in Gulf Opportunity Zone for 
Purposes of Tax-Exempt Bond Financing.--
            (1) In general.--Subsection (a) of section 1400N is amended 
        by adding at the end the following new paragraph:
            ``(8) Inclusion of certain counties.--For purposes of this 
        subsection, the Gulf Opportunity Zone includes Colbert County, 
        Alabama and Dallas County, Alabama.''.
            (2) Effective date.--The amendment made by this subsection 
        shall take effect as if included in the provisions of the Gulf 
        Opportunity Zone Act of 2005 to which it relates.

                      Subtitle B--Revenue Offsets

SEC. 3091. RETURNS RELATING TO PAYMENTS MADE IN SETTLEMENT OF PAYMENT 
              CARD AND THIRD PARTY NETWORK TRANSACTIONS.

    (a) In General.--Subpart B of part III of subchapter A of chapter 
61 is amended by adding at the end the following new section:

``SEC. 6050W. RETURNS RELATING TO PAYMENTS MADE IN SETTLEMENT OF 
              PAYMENT CARD AND THIRD PARTY NETWORK TRANSACTIONS.

    ``(a) In General.--Each payment settlement entity shall make a 
return for each calendar year setting forth--
            ``(1) the name, address, and TIN of each participating 
        payee to whom one or more payments in settlement of reportable 
        transactions are made, and
            ``(2) the gross amount of the reportable transactions with 
        respect to each such participating payee.
Such return shall be made at such time and in such form and manner as 
the Secretary may require by regulations.
    ``(b) Payment Settlement Entity.--For purposes of this section--
            ``(1) In general.--The term `payment settlement entity' 
        means--
                    ``(A) in the case of a payment card transaction, 
                the merchant acquiring bank, and
                    ``(B) in the case of a third party network 
                transaction, the third party settlement organization.
            ``(2) Merchant acquiring bank.--The term `merchant 
        acquiring bank' means the bank or other organization which has 
        the contractual obligation to make payment to participating 
        payees in settlement of payment card transactions.
            ``(3) Third party settlement organization.--The term `third 
        party settlement organization' means the central organization 
        which has the contractual obligation to make payment to 
        participating payees of third party network transactions.
            ``(4) Special rules related to intermediaries.--For 
        purposes of this section--
                    ``(A) Aggregated payees.--In any case where 
                reportable transactions of more than one participating 
                payee are settled through an intermediary--
                            ``(i) such intermediary shall be treated as 
                        the participating payee for purposes of 
                        determining the reporting obligations of the 
                        payment settlement entity with respect to such 
                        transactions, and
                            ``(ii) such intermediary shall be treated 
                        as the payment settlement entity with respect 
                        to the settlement of such transactions with the 
                        participating payees.
                    ``(B) Electronic payment facilitators.--In any case 
                where an electronic payment facilitator or other third 
                party makes payments in settlement of reportable 
                transactions on behalf of the payment settlement 
                entity, the return under subsection (a) shall be made 
                by such electronic payment facilitator or other third 
                party in lieu of the payment settlement entity.
    ``(c) Reportable Transaction.--For purposes of this section--
            ``(1) In general.--The term `reportable transaction' means 
        any payment card transaction and any third party network 
        transaction.
            ``(2) Payment card transaction.--The term `payment card 
        transaction' means any transaction in which a payment card is 
        accepted as payment.
            ``(3) Third party network transaction.--The term `third 
        party network transaction' means any transaction which is 
        settled through a third party payment network.
    ``(d) Other Definitions.--For purposes of this section--
            ``(1) Participating payee.--
                    ``(A) In general.--The term `participating payee' 
                means--
                            ``(i) in the case of a payment card 
                        transaction, any person who accepts a payment 
                        card as payment, and
                            ``(ii) in the case of a third party network 
                        transaction, any person who accepts payment 
                        from a third party settlement organization in 
                        settlement of such transaction.
                    ``(B) Exclusion of foreign persons.--To the extent 
                provided by the Secretary in regulations or other 
                guidance, such term shall not include any foreign 
                person.
                    ``(C) Inclusion of governmental units.--The term 
                `person' includes any governmental unit (and any agency 
                or instrumentality thereof).
            ``(2) Payment card.--The term `payment card' means any card 
        which is issued pursuant to an agreement or arrangement which 
        provides for--
                    ``(A) one or more issuers of such cards,
                    ``(B) a network of persons unrelated to each other, 
                and to the issuer, who agree to accept such cards as 
                payment, and
                    ``(C) standards and mechanisms for settling the 
                transactions between the merchant acquiring banks and 
                the persons who agree to accept such cards as payment.
        The acceptance as payment of any account number or other 
        indicia associated with a payment card shall be treated for 
        purposes of this section in the same manner as accepting such 
        payment card as payment.
            ``(3) Third party payment network.--The term `third party 
        payment network' means any agreement or arrangement--
                    ``(A) which involves the establishment of accounts 
                with a central organization for the purpose of settling 
                transactions between persons who establish such 
                accounts,
                    ``(B) which provides for standards and mechanisms 
                for settling such transactions,
                    ``(C) which involves a substantial number of 
                persons unrelated to such central organization who 
                provide goods or services and who have agreed to settle 
                transactions for the provision of such goods or 
                services pursuant to such agreement or arrangement, and
                    ``(D) which guarantees persons providing goods or 
                services pursuant to such agreement or arrangement that 
                such persons will be paid for providing such goods or 
                services.
        Such term shall not include any agreement or arrangement which 
        provides for the issuance of payment cards.
    ``(e) Exception for De Minimis Payments by Third Party Settlement 
Organizations.--A third party settlement organization shall not be 
required to report any information under subsection (a) with respect to 
third party network transactions of any participating payee if the 
amount which would otherwise be reported under subsection (a)(2) with 
respect to such transactions does not exceed $10,000 and the aggregate 
number of such transactions does not exceed 200.
    ``(f) Statements To Be Furnished to Persons With Respect to Whom 
Information Is Required.--Every person required to make a return under 
subsection (a) shall furnish to each person with respect to whom such a 
return is required a written statement showing--
            ``(1) the name, address, and phone number of the 
        information contact of the person required to make such return, 
        and
            ``(2) the gross amount of payments made to the person 
        required to be shown on the return.
The written statement required under the preceding sentence shall be 
furnished to the person on or before January 31 of the year following 
the calendar year for which the return under subsection (a) was 
required to be made.
    ``(g) Regulations.--The Secretary may prescribe such regulations or 
other guidance as may be necessary or appropriate to carry out this 
section, including rules to prevent the reporting of the same 
transaction more than once.''.
    (b) Penalty for Failure To File.--
            (1) Return.--Subparagraph (B) of section 6724(d)(1) is 
        amended--
                    (A) by striking ``or'' at the end of clause (xx),
                    (B) by redesignating the clause (xix) that follows 
                clause (xx) as clause (xxi),
                    (C) by striking ``and'' at the end of clause (xxi), 
                as redesignated by subparagraph (B) and inserting 
                ``or'', and
                    (D) by adding at the end the following:
                            ``(xxii) section 6050W (relating to returns 
                        to payments made in settlement of payment card 
                        transactions), and''.
            (2) Statement.--Paragraph (2) of section 6724(d) is amended 
        by striking ``or'' at the end of subparagraph (BB), by striking 
        the period at the end of the subparagraph (CC) and inserting 
        ``, or'', and by inserting after subparagraph (CC) the 
        following:
                    ``(DD) section 6050W(c) (relating to returns 
                relating to payments made in settlement of payment card 
                transactions).''.
    (c) Application of Backup Withholding.--Paragraph (3) of section 
3406(b) is amended by striking ``or'' at the end of subparagraph (D), 
by striking the period at the end of subparagraph (E) and inserting ``, 
or'', and by adding at the end the following new subparagraph:
                    ``(F) section 6050W (relating to returns relating 
                to payments made in settlement of payment card 
                transactions).''.
    (d) 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 6050V the following:

``Sec. 6050W. Returns relating to payments made in settlement of 
                            payment card transactions.''.
    (e) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        returns for calendar years beginning after December 31, 2010.
            (2) Application of backup withholding.--The amendment made 
        by subsection (c) shall apply to amounts paid after December 
        31, 2011.

SEC. 3092. GAIN FROM SALE OF PRINCIPAL RESIDENCE ALLOCATED TO 
              NONQUALIFIED USE NOT EXCLUDED FROM INCOME.

    (a) In General.--Subsection (b) of section 121 of the Internal 
Revenue Code of 1986 (relating to limitations) is amended by adding at 
the end the following new paragraph:
            ``(4) Exclusion of gain allocated to nonqualified use.--
                    ``(A) In general.--Subsection (a) shall not apply 
                to so much of the gain from the sale or exchange of 
                property as is allocated to periods of nonqualified 
                use.
                    ``(B) Gain allocated to periods of nonqualified 
                use.--For purposes of subparagraph (A), gain shall be 
                allocated to periods of nonqualified use based on the 
                ratio which--
                            ``(i) the aggregate periods of nonqualified 
                        use during the period such property was owned 
                        by the taxpayer, bears to
                            ``(ii) the period such property was owned 
                        by the taxpayer.
                    ``(C) Period of nonqualified use.--For purposes of 
                this paragraph--
                            ``(i) In general.--The term `period of 
                        nonqualified use' means any period (other than 
                        the portion of any period preceding January 1, 
                        2009) during which the property is not used as 
                        the principal residence of the taxpayer or the 
                        taxpayer's spouse or former spouse.
                            ``(ii) Exceptions.--The term `period of 
                        nonqualified use' does not include--
                                    ``(I) any portion of the 5-year 
                                period described in subsection (a) 
                                which is after the last date that such 
                                property is used as the principal 
                                residence of the taxpayer or the 
                                taxpayer's spouse,
                                    ``(II) any period (not to exceed an 
                                aggregate period of 10 years) during 
                                which the taxpayer or the taxpayer's 
                                spouse is serving on qualified official 
                                extended duty (as defined in subsection 
                                (d)(9)(C)) described in clause (i), 
                                (ii), or (iii) of subsection (d)(9)(A), 
                                and
                                    ``(III) any other period of 
                                temporary absence (not to exceed an 
                                aggregate period of 2 years) due to 
                                change of employment, health 
                                conditions, or such other unforeseen 
                                circumstances as may be specified by 
                                the Secretary.
                    ``(D) Coordination with recognition of gain 
                attributable to depreciation.--For purposes of this 
                paragraph--
                            ``(i) subparagraph (A) shall be applied 
                        after the application of subsection (d)(6), and
                            ``(ii) subparagraph (B) shall be applied 
                        without regard to any gain to which subsection 
                        (d)(6) applies.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to sales and exchanges after December 31, 2008.

SEC. 3093. INCREASE IN INFORMATION RETURN PENALTIES.

    (a) Failure To File Correct Information Returns.--
            (1) In general.--Subsections (a)(1), (b)(1)(A), and 
        (b)(2)(A) of section 6721 are each amended by striking ``$50'' 
        and inserting ``$100''.
            (2) Aggregate annual limitation.--Subsections (a)(1), 
        (d)(1)(A), and (e)(3)(A) of section 6721 are each amended by 
        striking ``$250,000'' and inserting ``$1,500,000''.
    (b) Reduction Where Correction Within 30 Days.--
            (1) In general.--Subparagraph (A) of section 6721(b)(1) is 
        amended by striking ``$15'' and inserting ``$50''.
            (2) Aggregate annual limitation.--Subsections (b)(1)(B) and 
        (d)(1)(B) of section 6721 are each amended by striking 
        ``$75,000'' and inserting ``$500,000''.
    (c) Reduction Where Correction on or Before August 1.--
            (1) In general.--Subparagraph (A) of section 6721(b)(2) is 
        amended by striking ``$30'' and inserting ``$75''.
            (2) Aggregate annual limitation.--Subsections (b)(2)(B) and 
        (d)(1)(C) of section 6721are each amended by striking 
        ``$150,000'' and inserting ``$1,000,000''.
    (d) Aggregate Annual Limitations for Persons With Gross Receipts of 
Not More Than $5,000,000.--Paragraph (1) of section 6721(d) is 
amended--
            (1) by striking ``$100,000'' in subparagraph (A) and 
        inserting ``$500,000'',
            (2) by striking ``$25,000'' in subparagraph (B) and 
        inserting ``$100,000'', and
            (3) by striking ``$50,000'' in subparagraph (C) and 
        inserting ``$250,000''.
    (e) Penalty in Case of Intentional Disregard.--Paragraph (2) of 
section 6721(e) is amended by striking ``$100'' and inserting ``$250''.
    (f) Failure To Furnish Correct Payee Statements.--
            (1) In general.--Subsection (a) of section 6722 is amended 
        by striking ``$50'' and inserting ``$100''.
            (2) Aggregate annual limitation.--Subsections (a) and 
        (c)(2)(A) of section 6722 are each amended by striking 
        ``$100,000'' and inserting ``$500,000''.
            (3) Penalty in case of intentional disregard.--Paragraph 
        (1) of section 6722(c) is amended by striking ``$100'' and 
        inserting ``$250''.
    (g) Failure To Comply With Other Information Reporting 
Requirements.--Section 6723 is amended--
            (1) by striking ``$50'' and inserting ``$100'', and
            (2) by striking ``$100,000'' and inserting ``$500,000''.
    (h) Effective Date.--The amendments made by this section shall 
apply with respect to information returns required to be filed on or 
after January 1, 2009.

SEC. 3094. INCREASE IN PENALTY FOR FAILURE TO FILE S CORPORATION 
              RETURNS.

    (a) In General.--Paragraph (1) of section 6699(b) (relating to 
amount per month) is amended by striking ``$85'' and inserting 
``$100''.
    (b) Effective Date.--The amendment made by this section shall apply 
to returns the due date for the filing of which (including extensions) 
is after the date of the enactment of this Act.

SEC. 3095. INCREASE IN PENALTY FOR FAILURE TO FILE PARTNERSHIP RETURNS.

    (a) Increase in Penalty Amount.--Paragraph (1) of section 6698(b) 
(relating to amount per month) is amended by striking ``$85'' and 
inserting ``$100''.
    (b) Effective Date.--The amendment made by this section shall apply 
to returns the due date for the filing of which (including extensions) 
is after the date of the enactment of this Act.

SEC. 3096. INCREASE IN MINIMUM PENALTY ON FAILURE TO FILE A RETURN OF 
              TAX.

    (a) In General.--Subsection (a) of section 6651, as amended by 
section 303(a) of the Heroes Earnings Assistance and Relief Tax Act of 
2008, is amended by striking ``$135'' in the last sentence and 
inserting ``$225''.
    (b) Effective Date.--The amendment made by this section shall apply 
to returns the due date for the filing of which (including extensions) 
is after the date of the enactment of this Act.

    Resolved further, That on July 8, 2008, the Senate concurs in the House 
amendments, striking titles VI through XI, to the Senate amendment to the 
aforesaid bill;
    Resolved further, That on July 11, 2008, the Senate disagrees to the 
amendments of the House, adding a new title and inserting a new section to the 
amendment of the Senate to the aforesaid bill.

            Attest:

                                                             Secretary.
110th CONGRESS

  2d Session

                               H.R. 3221

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        SENATE AMENDMENT TO HOUSE AMENDMENTS TO SENATE AMENDMENT