[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3221 Enrolled Bill (ENR)]
H.R.3221
One Hundred Tenth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Thursday,
the third day of January, two thousand and eight
An Act
To provide needed housing reform and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
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.
Sec. 1116. Inclusion of minorities and women; diversity in Agency
workforce.
Sec. 1117. Temporary authority for purchase of obligations of regulated
entities by Secretary of Treasury.
Sec. 1118. Consultation between the Director of the Federal Housing
Finance Agency and the Board of Governors of the Federal
Reserve System to ensure financial market stability .
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--HOUSING PRESERVATION
Subtitle A--Preservation Under Federal Housing Programs
Sec. 2801. Clarification of disposition of certain properties.
Sec. 2802. Eligibility of certain projects for enhanced voucher
assistance.
Sec. 2803. Transfer of certain rental assistance contracts.
Sec. 2804. Public housing disaster relief.
Sec. 2805. Preservation of certain affordable housing.
Subtitle B--Coordination of Federal Housing Programs and Tax Incentives
for Housing
Sec. 2831. Short title.
Sec. 2832. Approvals by Department of Housing and Urban Development.
Sec. 2833. Project approvals by rural housing service.
Sec. 2834. Use of FHA loans with housing tax credits.
Sec. 2835. Other HUD programs.
TITLE IX--MISCELLANEOUS
Sec. 2901. Homeless assistance.
Sec. 2902. Increasing access and understanding of energy efficient
mortgages.
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.
Sec. 3027. Transfer of funds appropriated to carry out 2008 recovery
rebates for individuals.
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 the AMT and research credits in lieu
of bonus depreciation.
Sec. 3082. Certain GO Zone incentives.
Sec. 3083. Increase in statutory limit on the public debt.
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. Delay in application of worldwide allocation of interest.
Sec. 3094. Time for payment of corporate estimated taxes.
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(d).
``(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) in subsection (a)--
(A) by striking ``enterprise'' and inserting ``regulated
entity''; and
(B) by striking ``enterprises'' and inserting ``regulated
entities'';
(3) by redesignating subsection (b) as subsection (d); and
(4) 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.''.
SEC. 1116. INCLUSION OF MINORITIES AND WOMEN; DIVERSITY IN AGENCY
WORKFORCE.
Section 1319A of the Housing and Community Development Act of 1992
(12 U.S.C. 4520) is amended--
(1) in the section heading, by striking ``equal opportunity in
solicitation of contracts'' and inserting ``minority and women
inclusion; diversity requirements'';
(2) in subsection (a), by striking ``(a) In General.--Each
enterprise'' and inserting ``(e) Outreach.--Each regulated
entity''; and
(3) by striking subsection (b);
(4) by inserting before subsection (e), as so redesignated by
paragraph (2) of this section, the following new subsections:
``(a) Office of Minority and Women Inclusion.--Each regulated
entity shall establish an Office of Minority and Women Inclusion, or
designate an office of the entity, that shall be responsible for
carrying out this section and all matters of the entity relating to
diversity in management, employment, and business activities in
accordance with such standards and requirements as the Director shall
establish.
``(b) Inclusion in All Levels of Business Activities.--Each
regulated entity shall develop and implement standards and procedures
to ensure, to the maximum extent possible, the inclusion and
utilization of minorities (as such term is defined in section 1204(c)
of the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 1811 note)) and women, and minority- and women-owned
businesses (as such terms are defined in section 21A(r)(4) of the
Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)) (including financial
institutions, investment banking firms, mortgage banking firms, asset
management firms, broker-dealers, financial services firms,
underwriters, accountants, brokers, investment consultants, and
providers of legal services) in all business and activities of the
regulated entity at all levels, including in procurement, insurance,
and all types of contracts (including contracts for the issuance or
guarantee of any debt, equity, or mortgage-related securities, the
management of its mortgage and securities portfolios, the making of its
equity investments, the purchase, sale and servicing of single- and
multi-family mortgage loans, and the implementation of its affordable
housing program and initiatives). The processes established by each
regulated entity for review and evaluation for contract proposals and
to hire service providers shall include a component that gives
consideration to the diversity of the applicant.
``(c) Applicability.--This section shall apply to all contracts of
a regulated entity for services of any kind, including services that
require the services of investment banking, asset management entities,
broker-dealers, financial services entities, underwriters, accountants,
investment consultants, and providers of legal services.
``(d) Inclusion in Annual Reports.--Each regulated entity shall
include, in the annual report submitted by the entity to the Director
pursuant to section 309(k) of the Federal National Mortgage Association
Charter Act (12 U.S.C. 1723a(k)), section 307(c) of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1456(c)), and section 20 of
the Federal Home Loan Bank Act (12 U.S.C. 1440), as applicable,
detailed information describing the actions taken by the entity
pursuant to this section, which shall include a statement of the total
amounts paid by the entity to third party contractors since the last
such report and the percentage of such amounts paid to businesses
described in subsection (b) of this section.''; and
(5) by adding at the end the following new subsection:
``(f) Diversity in Agency Workforce.--The Agency shall take
affirmative steps to seek diversity in its workforce at all levels of
the agency consistent with the demographic diversity of the United
States, which shall include--
``(1) heavily recruiting at historically Black colleges and
universities, Hispanic-serving institutions, women's colleges, and
colleges that typically serve majority minority populations;
``(2) sponsoring and recruiting at job fairs in urban
communities, and placing employment advertisements in newspapers
and magazines oriented toward women and people of color;
``(3) partnering with organizations that are focused on
developing opportunities for minorities and women to place talented
young minorities and women in industry internships, summer
employment, and full-time positions; and
``(4) where feasible, partnering with inner-city high schools,
girls' high schools, and high schools with majority minority
populations to establish or enhance financial literacy programs and
provide mentoring.''.
SEC. 1117. TEMPORARY AUTHORITY FOR PURCHASE OF OBLIGATIONS OF REGULATED
ENTITIES BY SECRETARY OF TREASURY.
(a) Fannie Mae.--Section 304 of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1719) is amended by adding at the
end the following new subsection:
``(g) Temporary Authority of Treasury to Purchase Obligations and
Securities; Conditions.--
``(1) Authority to purchase.--
``(A) General authority.--In addition to the authority
under subsection (c) of this section, the Secretary of the
Treasury is authorized to purchase any obligations and other
securities issued by the corporation under any section of this
Act, on such terms and conditions as the Secretary may
determine and in such amounts as the Secretary may determine.
Nothing in this subsection requires the corporation to issue
obligations or securities to the Secretary without mutual
agreement between the Secretary and the corporation. Nothing in
this subsection permits or authorizes the Secretary, without
the agreement of the corporation, to engage in open market
purchases of the common securities of the corporation.
``(B) Emergency determination required.--In connection with
any use of this authority, the Secretary must determine that
such actions are necessary to--
``(i) provide stability to the financial markets;
``(ii) prevent disruptions in the availability of
mortgage finance; and
``(iii) protect the taxpayer.
``(C) Considerations.--To protect the taxpayers, the
Secretary of the Treasury shall take into consideration the
following in connection with exercising the authority contained
in this paragraph:
``(i) The need for preferences or priorities regarding
payments to the Government.
``(ii) Limits on maturity or disposition of obligations
or securities to be purchased.
``(iii) The corporation's plan for the orderly
resumption of private market funding or capital market
access.
``(iv) The probability of the corporation fulfilling
the terms of any such obligation or other security,
including repayment.
``(v) The need to maintain the corporation's status as
a private shareholder-owned company.
``(vi) Restrictions on the use of corporation
resources, including limitations on the payment of
dividends and executive compensation and any such other
terms and conditions as appropriate for those purposes.
``(D) Reports to congress.--Upon exercise of this
authority, the Secretary shall report to the Committees on the
Budget, Financial Services, and Ways and Means of the House of
Representatives and the Committees on the Budget, Finance, and
Banking, Housing, and Urban Affairs of the Senate as to the
necessity for the purchase and the determinations made by the
Secretary under subparagraph (B) and with respect to the
considerations required under subparagraph (C), and the size,
terms, and probability of repayment or fulfillment of other
terms of such purchase.
``(2) Rights; sale of obligations and securities.--
``(A) Exercise of rights.--The Secretary of the Treasury
may, at any time, exercise any rights received in connection
with such purchases.
``(B) Sale of obligation and securities.--The Secretary of
the Treasury may, at any time, subject to the terms of the
security or otherwise upon terms and conditions and at prices
determined by the Secretary, sell any obligation or security
acquired by the Secretary under this subsection.
``(C) Application of sunset to purchased obligations or
securities.--The authority of the Secretary of the Treasury to
hold, exercise any rights received in connection with, or sell,
any obligations or securities purchased is not subject to the
provisions of paragraph (4).
``(3) Funding.--For the purpose of the authorities granted in
this subsection, the Secretary of the Treasury may use the proceeds
of the sale of any securities issued under chapter 31 of Title 31,
and the purposes for which securities may be issued under chapter
31 of Title 31 are extended to include such purchases and the
exercise of any rights in connection with such purchases. Any funds
expended for the purchase of, or modifications to, obligations and
securities, or the exercise of any rights received in connection
with such purchases under this subsection shall be deemed
appropriated at the time of such purchase, modification, or
exercise.
``(4) Termination of authority.--The authority under this
subsection (g), with the exception of paragraphs (2) and (3) of
this subsection, shall expire December 31, 2009.
``(5) Authority of the director with respect to executive
compensation.--The Director shall have the power to approve,
disapprove, or modify the executive compensation of the
corporation, as defined under Regulation S-K, 17 C.F.R. 229.''.
(b) Freddie Mac.--Section 306 of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1455) is amended by adding at the end the
following new subsection:
``(l) Temporary Authority of Treasury to Purchase Obligations and
Securities; Conditions.--
``(1) Authority to purchase.--
``(A) General authority.--In addition to the authority
under subsection (c) of this section, the Secretary of the
Treasury is authorized to purchase any obligations and other
securities issued by the Corporation under any section of this
Act, on such terms and conditions as the Secretary may
determine and in such amounts as the Secretary may determine.
Nothing in this subsection requires the Corporation to issue
obligations or securities to the Secretary without mutual
agreement between the Secretary and the Corporation. Nothing in
this subsection permits or authorizes the Secretary, without
the agreement of the Corporation, to engage in open market
purchases of the common securities of the Corporation.
``(B) Emergency determination required.--In connection with
any use of this authority, the Secretary must determine that
such actions are necessary to--
``(i) provide stability to the financial markets;
``(ii) prevent disruptions in the availability of
mortgage finance; and
``(iii) protect the taxpayer.
``(C) Considerations.--To protect the taxpayers, the
Secretary of the Treasury shall take into consideration the
following in connection with exercising the authority contained
in this paragraph:
``(i) The need for preferences or priorities regarding
payments to the Government.
``(ii) Limits on maturity or disposition of obligations
or securities to be purchased.
``(iii) The Corporation's plan for the orderly
resumption of private market funding or capital market
access.
``(iv) The probability of the Corporation fulfilling
the terms of any such obligation or other security,
including repayment.
``(v) The need to maintain the Corporation's status as
a private shareholder-owned company.
``(vi) Restrictions on the use of Corporation
resources, including limitations on the payment of
dividends and executive compensation and any such other
terms and conditions as appropriate for those purposes.
``(D) Reports to congress.--Upon exercise of this
authority, the Secretary shall report to the Committees on the
Budget, Financial Services, and Ways and Means of the House of
Representatives and the Committees on the Budget, Finance, and
Banking, Housing, and Urban Affairs of the Senate as to the
necessity for the purchase and the determinations made by the
Secretary under subparagraph (B) and with respect to the
considerations required under subparagraph (C), and the size,
terms, and probability of repayment or fulfillment of other
terms of such purchase.
``(2) Rights; sale of obligations and securities.--
``(A) Exercise of rights.--The Secretary of the Treasury
may, at any time, exercise any rights received in connection
with such purchases.
``(B) Sale of obligation and securities.--The Secretary of
the Treasury may, at any time, subject to the terms of the
security or otherwise upon terms and conditions and at prices
determined by the Secretary, sell any obligation or security
acquired by the Secretary under this subsection.
``(C) Application of sunset to purchased obligations or
securities.--The authority of the Secretary of the Treasury to
hold, exercise any rights received in connection with, or sell,
any obligations or securities purchased is not subject to the
provisions of paragraph (4).
``(3) Funding.--For the purpose of the authorities granted in
this subsection, the Secretary of the Treasury may use the proceeds
of the sale of any securities issued under chapter 31 of Title 31,
and the purposes for which securities may be issued under chapter
31 of Title 31 are extended to include such purchases and the
exercise of any rights in connection with such purchases. Any funds
expended for the purchase of, or modifications to, obligations and
securities, or the exercise of any rights received in connection
with such purchases under this subsection shall be deemed
appropriated at the time of such purchase, modification, or
exercise.
``(4) Termination of authority.--The authority under this
subsection (l), with the exception of paragraphs (2) and (3) of
this subsection, shall expire December 31, 2009.
``(5) Authority of the director with respect to executive
compensation.--The Director shall have the power to approve,
disapprove, or modify the executive compensation of the
Corporation, as defined under Regulation S-K, 17 C.F.R. 229.''.
(c) Federal Home Loan Banks.--Section 11 of the Federal Home Loan
Bank Act (12 U.S.C. 1431) is amended by adding at the end the following
new subsection:
``(l) Temporary Authority of Treasury to Purchase Obligations;
Conditions.--
``(1) Authority to purchase.--
``(A) General authority.--In addition to the authority
under subsection (i) of this section, the Secretary of the
Treasury is authorized to purchase any obligations issued by
any Federal Home Loan Bank under any section of this Act, on
such terms and conditions as the Secretary may determine and in
such amounts as the Secretary may determine. Nothing in this
subsection requires a Federal Home Loan Bank to issue
obligations or securities to the Secretary without mutual
agreement between the Secretary and the Federal Home Loan Bank.
Nothing in this subsection permits or authorizes the Secretary,
without the agreement of the Federal Home Loan Bank, to engage
in open market purchases of the common securities of any
Federal Home Loan Bank.
``(B) Emergency determination required.--In connection with
any use of this authority, the Secretary must determine that
such actions are necessary to--
``(i) provide stability to the financial markets;
``(ii) prevent disruptions in the availability of
mortgage finance; and
``(iii) protect the taxpayer.
``(C) Considerations.--To protect the taxpayers, the
Secretary of the Treasury shall take into consideration the
following in connection with exercising the authority contained
in this paragraph:
``(i) The need for preferences or priorities regarding
payments to the Government.
``(ii) Limits on maturity or disposition of obligations
or securities to be purchased.
``(iii) The Federal Home Loan Bank's plan for the
orderly resumption of private market funding or capital
market access.
``(iv) The probability of the Federal Home Loan Bank
fulfilling the terms of any such obligation or other
security, including repayment.
``(v) The need to maintain the Federal Home Loan Bank's
status as a private shareholder-owned company.
``(vi) Restrictions on the use of Federal Home Loan
Bank resources, including limitations on the payment of
dividends and executive compensation and any such other
terms and conditions as appropriate for those purposes.
``(D) Reports to congress.--Upon exercise of this
authority, the Secretary shall report to the Committees on the
Budget, Financial Services, and Ways and Means of the House of
Representatives and the Committees on the Budget, Finance, and
Banking, Housing, and Urban Affairs of the Senate as to the
necessity for the purchase and the determinations made by the
Secretary under subparagraph (B) and with respect to the
considerations required under subparagraph (C), and the size,
terms, and probability of repayment or fulfillment of other
terms of such purchase.
``(2) Rights; sale of obligations and securities.--
``(A) Exercise of rights.--The Secretary of the Treasury
may, at any time, exercise any rights received in connection
with such purchases.
``(B) Sale of obligations.--The Secretary of the Treasury
may, at any time, subject to the terms of the security or
otherwise upon terms and conditions and at prices determined by
the Secretary, sell any obligation acquired by the Secretary
under this subsection.
``(C) Application of sunset to purchased obligations.--The
authority of the Secretary of the Treasury to hold, exercise
any rights received in connection with, or sell, any
obligations purchased is not subject to the provisions of
paragraph (4).
``(3) Funding.--For the purpose of the authorities granted in
this subsection, the Secretary of the Treasury may use the proceeds
of the sale of any securities issued under chapter 31 of Title 31,
and the purposes for which securities may be issued under chapter
31 of Title 31 are extended to include such purchases and the
exercise of any rights in connection with such purchases. Any funds
expended for the purchase of, or modifications to, obligations and
securities, or the exercise of any rights received in connection
with such purchases under this subsection shall be deemed
appropriated at the time of such purchase, modification, or
exercise.
``(4) Termination of authority.--The authority under this
subsection (l), with the exception of paragraphs (2) and (3) of
this subsection, shall expire December 31, 2009.
``(5) Authority of the director with respect to executive
compensation.--The Director shall have the power to approve,
disapprove, or modify the executive compensation of the Federal
Home Loan Bank, as defined under Regulation S-K, 17 C.F.R. 229.''.
SEC. 1118. CONSULTATION BETWEEN THE DIRECTOR OF THE FEDERAL HOUSING
FINANCE AGENCY AND THE BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM TO ENSURE FINANCIAL MARKET STABILITY .
Subsection (a) of section 1313 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4513), as amended
by the preceding provisions of this Act, is further amended by adding
at the end the following new paragraph:
``(3) Coordination with the chairman of the board of governors
of the federal reserve system.--
``(A) Consultation.-- The Director shall consult with, and
consider the views of, the Chairman of the Board of Governors
of the Federal Reserve System, with respect to the risks posed
by the regulated entities to the financial system, prior to
issuing any proposed or final regulations, orders, and
guidelines with respect to the exercise of the additional
authority provided in this Act regarding prudential management
and operations standards, safe and sound operations of, and
capital requirements and portfolio standards applicable to the
regulated entities (as such term is defined in section 1303).
The Director also shall consult with the Chairman regarding any
decision to place a regulated entity into conservatorship or
receivership.
``(B) Information sharing.--To facilitate the consultative
process, the Director shall share information with the Board of
Governors of the Federal Reserve System on a regular, periodic
basis as determined by the Director and the Board regarding the
capital, asset and liabilities, financial condition, and risk
management practices of the regulated entities as well as any
information related to financial market stability.
``(C) Termination of consultation requirement.--The
requirement of the Director to consult with the Board of
Governors of the Federal Reserve System under this paragraph
shall expire at the conclusion of December 31, 2009.''.
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 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 4-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 4-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 115
percent of the median house price for such size residence exceeds
the foregoing limitation for such size residence, to the lesser of
150 percent of such limitation for such size residence or the
amount that is equal to 115 percent of the median house 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 4-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 4-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 (12 U.S.C. 1454(a)(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 115
percent of the median house price for such size residence exceeds
the foregoing limitation for such size residence, to the lesser of
150 percent of such limitation for such size residence or the
amount that is equal to 115 percent of the median house 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 Goals.--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 2010 and each year thereafter, annual housing goals, with
respect to the mortgage purchases by the enterprises, as follows:
``(1) Single-family housing goals.--Four single-family housing
goals under section 1332.
``(2) Multifamily special affordable housing goal.--One
multifamily special affordable housing goal under section 1333.
``(b) Timing.--The Director shall, by regulation, establish an
annual deadline by which the Director shall establish the annual
housing goals under this subpart for each year, taking into
consideration the need for the enterprises to reasonably and
sufficiently plan their operations and activities in advance, including
operations and activities necessary to meet such annual goals.
``(c) Transition.--The annual housing goals effective for 2008
pursuant to this subpart, as in effect before the enactment of the
Federal Housing Finance Regulatory Reform Act of 2008, shall remain in
effect for 2009, except that not later than the expiration of the 270-
day period beginning on the date of the enactment of such Act, the
Director shall review such goals applicable for 2009 to determine the
feasibility of such goals given the market conditions current at such
time and, after seeking public comment for a period not to exceed 30
days, may make appropriate adjustments consistent with such market
conditions.
``(d) Eliminating Interest Rate Disparities.--
``(1) In general.--Upon request by the Director, an enterprise
shall provide to the Director, in a form determined by the
Director, data the Director may review to determine whether there
exist disparities in interest rates charged on mortgages to
borrowers who are minorities as compared with comparable mortgages
to borrowers of similar creditworthiness who are not minorities.
``(2) Remedial actions upon preliminary finding.--Upon a
preliminary finding by the Director that a pattern of disparities
in interest rates with respect to any lender or lenders exists
pursuant to the data provided by an enterprise in paragraph (1),
the Director shall_
``(A) refer the preliminary finding to the appropriate
regulatory or enforcement agency for further review; and
``(B) require the enterprise to submit additional data with
respect to any lender or lenders, as appropriate and to the
extent practicable, to the Director who shall submit any such
additional data to the regulatory or enforcement agency for
appropriate action.
``(3) Annual report to congress.--The Director shall submit to
the Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the
Senate a report describing the actions taken, and being taken, by
the Director to carry out this subsection. No such report shall
identify any lender or lenders who have not been found to have
engaged in discriminatory lending practices pursuant to a final
adjudication on the record, and after opportunity for an
administrative hearing, in accordance with subchapter II of chapter
5 of title 5, United States Code.
``(4) Protection of identity of individuals.--In carrying out
this subsection, the Director shall ensure that no property-related
or financial information that would enable a borrower to be
identified shall be made public.
``SEC. 1332. SINGLE-FAMILY HOUSING GOALS.
``(a) In General.--The Director shall, by regulation, establish
annual goals for the purchase by each enterprise of the following types
of mortgages for the following categories of families:
``(1) Purchase-money mortgages.--A goal for purchase of
conventional, conforming, single-family, purchase money mortgages
financing owner-occupied housing for each of the following
categories of families:
``(A) Low-income families.
``(B) Families that reside in low-income areas.
``(C) Very low-income families.
``(2) Refinancing mortgages.--A goal for purchase of
conventional, conforming mortgages on owner-occupied, single-family
housing for low-income families that are given to pay off or prepay
an existing loan secured by the same property.
``(b) Goals as a Percentage of Total Mortgage Purchases.--The goals
established under paragraphs (1) and (2) of subsection (a) shall be
established as a percentage of the total number of conventional,
conforming, single-family, owner-occupied, purchase money mortgages
purchased by the enterprise, or as percentage of the total number of
conventional, single-family, owner-occupied refinance mortgages
purchased by the enterprise, as applicable, that are mortgages for the
types of families specified in paragraphs (1) and (2) of subsection
(a).
``(c) Single-Family, Owner-Occupied Rental Housing Units.--The
Director shall require each enterprise to report the number of rental
housing units affordable to low-income families each year which are
contained in mortgages purchased by the enterprise financing 2- to 4-
unit single-family, owner-occupied properties and may, by regulation,
establish additional requirements relating to such units.
``(d) 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 each
such goal established under subsection (a) of this section and any
additional requirements which may be established under subsection
(c) of this section.
``(2) Purchase-money mortgage goals.--An enterprise shall be
considered to be in compliance with a housing goal under
subparagraph (A), (B), or (C) of subsection (a)(1) for a year only
if, for the type of family described in such subparagraph, 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 for the year for such type of family that is established
under subsection (e).
``(3) Refinance goal.--An enterprise shall be considered to be
in compliance with the refinance goal under subsection (a)(2) for a
year only if the percentage of the number of conventional,
conforming, single-family, owner-occupied refinance mortgages
purchased by the enterprise in such year that serve low-income
families meets or exceeds the target for the year that is
established under subsection (e).
``(e) Annual Targets.--
``(1) In general.--The Director shall, by regulation, establish
annual targets for each goal and subgoal under this section,
provided that the Director shall not set prospective targets longer
than three years. In establishing such targets, the Director shall
not consider segments of the market determined to be unacceptable
or contrary to good lending practices, inconsistent with safety and
soundness, or unauthorized for purchase by the enterprises.
``(2) Goals targets.--
``(A) Calculation.--The Director shall calculate, for each
of the types of families described in subsection (a), the
percentage, for each of the three years that most recently
precede such year and for which information under the Home
Mortgage Disclosure Act of 1975 is publicly available--
``(i) of the number of conventional, conforming,
single-family, owner-occupied purchase money mortgages
originated in such year that serve such type of family, or
``(ii) the number of conventional, conforming, single-
family, owner-occupied refinance mortgages originated in
such year that serve low-income families,
as applicable, as determined by the Director using the
information obtained and determined pursuant to paragraphs (4)
and (5).
``(B) Establishment of goal targets.--The Director shall,
by regulation, establish targets for each of the goal
categories, taking into consideration the calculations under
subparagraph (A) and the following factors:
``(i) National housing needs.
``(ii) Economic, housing, and demographic conditions,
including expected market developments.
``(iii) The performance and effort of the enterprises
toward achieving the housing goals under this section in
previous years.
``(iv) The ability of the enterprise to lead the
industry in making mortgage credit available.
``(v) Such other reliable mortgage data as may be
available.
``(vi) The size of the purchase money conventional
mortgage market, or refinance conventional mortgage market,
as applicable, serving each of the types of families
described in subsection (a), relative to the size of the
overall purchase money mortgage market or the overall
refinance mortgage market, respectively.
``(vii) The need to maintain the sound financial
condition of the enterprises.
``(3) Authority to adjust targets.--The Director may, by
regulation, adjust the percentage targets previously established by
regulation pursuant to paragraph (2)(B) for any year, to reflect
subsequent available data and market developments.
``(4) HMDA information.--The Director shall annually obtain
information submitted in compliance with the Home Mortgage
Disclosure Act of 1975 regarding conventional, conforming, single-
family, owner-occupied, purchase money and refinance mortgages
originated and purchased for the previous year.
``(5) Conforming mortgages.--In determining whether a mortgage
is a conforming mortgage for purposes of this paragraph, the
Director shall consider the original principal balance of the
mortgage loan to be the principal balance as reported in the
information referred to in paragraph (4), as rounded to the nearest
thousand dollars.
``(f) 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 a housing goal established under this section and before any
public disclosure thereof, the Director shall provide notice of the
determination to the enterprise, which shall include an analysis
and comparison, by the Director, of the performance of the
enterprise for the year and the targets for the year under
subsection (e).
``(2) Comment period.--The Director shall provide each
enterprise an opportunity to comment on the determination during
the 30-day period beginning upon receipt by the enterprise of the
notice.
``(g) Use of Borrower Income.--In monitoring the performance of
each enterprise pursuant to the housing goals under this section and
evaluating such performance (for purposes of section 1336), the
Director shall consider a mortgagor's income to be such income at the
time of origination of the mortgage.
``(h) Consideration of Properties With Rental Units.--Mortgages
financing two- to four-unit owner-occupied properties shall count
toward the achievement of the single-family housing goals under this
section, if such properties otherwise meet the requirements under this
section, notwithstanding the use of one or more units for rental
purposes.
``(i) Goals Credit.--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
section 1332 and 1333. In making any such determination, the Director
shall consider whether a transaction or activity of an enterprise is
substantially equivalent to a mortgage purchase and either (1) creates
a new market, or (2) adds liquidity to an existing market. No credit
toward the achievement of the housing goals and subgoals established
under this section may be given to the purchase of mortgages, including
any transaction or activity of an enterprise determined to be
substantially equivalent to a mortgage purchase, that is determined to
be unacceptable or contrary to good lending practices, inconsistent
with safety and soundness, or unauthorized for purchase by the
enterprises, pursuant to regulations issued by the Director.
``SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.
``(a) Establishment of Goal.--
``(1) In general.--The Director shall, by regulation, establish
a single annual goal, by either unit or dollar volume, of purchases
by each enterprise of mortgages on multifamily housing that finance
dwelling units affordable to low-income families.
``(2) Additional requirements for units affordable to very low-
income families.--When establishing the goal under this section,
the Director shall establish additional requirements for the
purchase by each enterprise of mortgages on multifamily housing
that finance dwelling units affordable to very low-income families.
``(3) Reporting on smaller properties.--The Director shall
require each enterprise to report on the purchase by each
enterprise of multifamily housing of a smaller or limited size that
is affordable to low-income families, which may be based on
multifamily projects of 5 to 50 units (as such numbers may be
adjusted by the Director) or on mortgages of up to $5,000,000 (as
such amount may be adjusted by the Director), and may, by
regulation, establish such aditional requirements related to such
units.
``(4) Factors.--In establishing the goal and additional
requirements under this section, the Director shall not consider
segments of the market determined to be inconsistent with safety
and soundness or unauthorized for purchase by the enterprises, and
shall take into consideration--
``(A) national multifamily mortgage credit needs and the
ability of the enterprise to provide additional liquidity and
stability for the multifamily mortgage market;
``(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 for
housing affordable to low-income and very low-income families,
including the size of the multifamily markets for housing of a
smaller or limited size;
``(D) the ability of the enterprise to lead the market in
making multifamily mortgage credit available, especially for
multifamily housing described in paragraphs (1) and (2);
``(E) the availability of public subsidies; and
``(F) the need to maintain the sound financial condition of
the enterprise.
``(b) Units Financed by Housing Finance Agency Bonds.--The Director
shall give full credit toward the achievement of the multifamily
special affordable housing goal under this section (for purposes of
section 1336) to dwelling units in multifamily housing that otherwise
qualifies under such goal and that is financed by tax-exempt or taxable
bonds issued by a State or local housing finance agency, if such bonds,
in whole or in part--
``(1) are secured by a guarantee of the enterprise; or
``(2) are purchased by the enterprise, except that the Director
may give less than full credit for purchases of investment grade
bonds, to the extent that such purchases do not provide a new
market or add liquidity to an existing market.
``(c) Measurement of Performance.--The Director shall monitor the
performance of each enterprise in meeting the goals established under
this section and shall evaluate such performance (for purposes of
section 1336) based on whether the rent levels are affordable. A rent
level shall be considered to be affordable for purposes of this
subsection for low-income families if it does not exceed 30 percent of
the maximum income level of such income category, with appropriate
adjustments for unit size as measured by the number of bedrooms.
``(d) Determination of Compliance.--The Director shall determine,
for each year that the housing goal under this section is in effect
pursuant to section 1331(a), whether each enterprise has complied with
such goal and the additional requirements under subsection (a)(2).
``SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS.
``(a) Authority.--An enterprise may petition the Director in
writing at any time during a year to reduce the level of any goal or
subgoal for such year established pursuant to this subpart.
``(b) Standard for Reduction.--The Director may reduce the level
for a goal or subgoal 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 or subgoal would result in the
constraint of liquidity, over-investment in certain market
segments, or other consequences contrary to the intent of this
subpart, or section 301(3) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1716(3)) or section 301(b)(3) of
the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451
note), as applicable.
``(c) Determination.--The Director shall, promptly upon receipt of
a petition regarding a reduction, seek public comment on the reduction
for a period of 30 days. The Director shall make a determination
regarding any proposed reduction within 30 days after the expiration of
such public comment period. The Director may extend such determination
period for a single additional 15-day period, but only if the Director
requests additional information from the enterprise.''.
(c) Conforming Amendments.--The Housing and Community Development
Act of 1992 is amended_
(1) in section 1335(a) (12 U.S.C. 4565(a)), in the matter
preceding paragraph (1), by striking ``low- and moderate-income
housing goal'' and all that follows through ``section 1334'' and
inserting ``housing goals established under this subpart''; and
(2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by striking
``sections 1332, 1333, and 1334,'' and inserting ``this subpart''.
(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
dollar amount limitation in effect at the time of such origination
and applicable to such mortgage, under, as applicable--
``(A) section 302(b)(2) of the Federal National Mortgage
Association Charter Act; or
``(B) section 305(a)(2) of the Federal Home Loan Mortgage
Corporation Act.
``(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)(1)(B), shall include families
having incomes not greater than 100 percent of the area median
income who reside in minority census tracts and shall include
families having incomes not greater than 100 percent of the area
median income who reside in designated disaster areas.
``(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.--To increase the liquidity of mortgage investments
and improve the distribution of investment capital available for
mortgage financing for underserved markets, each enterprise shall
provide leadership to the market in developing loan products and
flexible underwriting guidelines to facilitate a secondary market
for mortgages for very low-, low-, and moderate-income families
with respect to the following underserved markets:
``(A) Manufactured housing.--The enterprise shall develop
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 develop 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;
``(vii) the rural rental housing program under section
515 of the Housing Act of 1949;
``(viii) the low-income housing tax credit under
section 42 of the Internal Revenue Code of 1986; and
``(ix) comparable state and local affordable housing
programs.
``(C) Rural markets.--The enterprise shall develop loan
products and flexible underwriting guidelines to facilitate a
secondary market for mortgages on housing for very low-, and
low-, and moderate-income families in rural areas.''; and
(5) by adding at the end the following new subsections:
``(c) Additional Categories.--The Director may submit
recommendations to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban
Affairs of the Senate for the establishment of additional categories
under subsection (a), provided that the Director makes a preliminary
determination that any such category is important to the mission of the
enterprises, that the category is an underserved market, and that the
establishment of such category is warranted.
``(d) Evaluation and Reporting of Compliance.--
``(1) In general.--The Director shall, by regulation, establish
effective for 2010 and thereafter 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 2010 and each year thereafter, 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, more flexible
underwriting guidelines, and other innovative approaches to
providing financing to each of such underserved markets;
``(B) the extent of outreach to qualified loan sellers and
other market participants in each of such underserved markets;
``(C) the volume of loans purchased in each of such
underserved markets relative to the market opportunities
available to the enterprise, except that the Director shall not
establish specific quantitative targets nor evaluate the
enterprises based solely on the volume of loans purchased; and
``(D) the amount of investments and grants in projects
which assist in meeting the needs of such underserved markets.
``(3) Manufactured housing market.--In determining whether an
enterprise has complied with the duty under subparagraph (A) of
subsection (a)(1), the Director may consider loans secured by both
real and personal property.
``(4) Prohibition of consideration of affordable housing fund
grants for meeting duty to serve.-- In determining whether an
enterprise has complied with the duty referred to in paragraph (1),
the Director may not consider any affordable housing fund grant
amounts used under section 1337 for eligible activities under
subsection (g) of such section.''.
(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 title, 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 be enforceable only under this section, except that such
duty shall not be subject to subsection (c)(7) of this section and
shall not be enforceable under any other provision of this title
(including subpart C of this part) or under any provision of the
Federal National Mortgage Association Charter Act or the Federal
Home Loan Mortgage Corporation Act.''.
(c) Additional Credit for Certain Mortgages.--Section 1336(a) of
the Housing and Community Development Act of 1992 (12 U.S.C. 4566(a))
is amended_
(1) in paragraph (2), by inserting ``, except as provided in
paragraph (5),'' after ``which''; and
(2) by adding at the end the following new paragraph:
``(5) Additional credit.--The Director may assign additional
credit toward achievement, under this section, of the housing goals
for mortgage purchase activities of the enterprises that comply
with the requirements of such goals and support housing that
includes a licensed childcare center. The availability of
additional credit under this paragraph shall not be used to
increase any housing goal, subgoal, or target established under
this subpart.''.
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, or fails to comply with
the plan, the Director may issue a cease and desist order in
accordance with section 1341 and impose civil money penalties in
accordance with section 1345.
``(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 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) Cease and desist orders; civil money penalties.--Solely
with respect to the housing goals established under sections
1332(a) and 1333(a)(1), if the Director requires an enterprise to
submit a housing plan under this subsection and the enterprise
refuses to submit such a plan, submits an unacceptable plan, or
fails to comply with the plan, the Director may issue a cease and
desist order in accordance with section 1341, impose civil money
penalties in accordance with section 1345, exercise other
appropriate enforcement authority or seek other appropriate
actions.''.
(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 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;
``(2) the enterprise has failed to submit the information
required under subsection (m) or (n) of section 309 of the Federal
National Mortgage Association Charter Act, or subsection (e) or (f)
of section 307 of the Federal Home Loan Mortgage Corporation Act;
``(3) solely with respect to the housing goals established
under sections 1332(a) and 1333(a)(1), the enterprise has failed to
submit a housing plan that complies with section 1336(c) within the
applicable period; or
``(4) solely with respect to the housing goals established
under sections 1332(a) and 1333(a)(1), 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) submit a report under section 1327;
``(B) solely with respect to the housing goals established
under sections 1332(a) and 1333(a)(1), submit a housing plan in
compliance with section 1336(c);
``(C) solely with respect to the housing goals established
under sections 1332(a) and 1333(a)(1), comply with the housing
plan in compliance with section 1336(c); or
``(D) 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) 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;
``(2) 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;
``(3) solely with respect to the housing goals established
under sections 1332(a) and 1333(a)(1), submit a housing plan or
perform its responsibilities under a remedial order issued pursuant
to section 1336(c) within the required period; or
``(4) solely with respect to the housing goals established
under sections 1332(a) and 1333(a)(1), 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.--
``(1) In general.--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 (as such term is defined in section 1303) for
use--
``(A) to increase and preserve the supply of rental housing
for extremely low- and very low-income families, including
homeless families; and
``(B) to increase homeownership for extremely low- and very
low-income families.
``(2) Federal assistance.--For purposes of the application of
Federal civil rights laws, all assistance provided from the Housing
Trust Fund shall be considered Federal financial assistance.
``(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 of the 50 States of the United
States or the District of Columbia, the allocation for such
State of the United States or the District of Columbia shall be
$3,000,000, and the increase shall be deducted pro rata from
the allocations made to all other of the States (as such term
is defined in section 1303).
``(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)(D);
``(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)(D).
``(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 or
families with incomes at or below the poverty line (as such
term is defined in section 673 of the Omnibus Budget
Reconciliation Act of 1981 (42 U.S.C. 9902), including any
revision required by such section) applicable to a family of
the size involved, 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) Tenant protections and public participation.--All amounts
from the Trust Fund shall be allocated in accordance with, and any
eligible activities carried out in whole or in part with grant
amounts under this subtitle (including housing provided with such
grant amounts) shall comply with and be operated in compliance
with--
``(A) laws relating to tenant protections and tenant rights
to participate in decision making regarding their residences;
``(B) laws requiring public participation, including laws
relating to Consolidated Plans, Qualified Allocation Plans, and
Public Housing Agency Plans; and
``(C) fair housing laws and laws regarding accessibility in
federally assisted housing, including section 504 of the
Rehabilitation Act of 1973.
``(9) 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.
``(10) 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;
and for the purposes of this subparagraph, the prohibited
use of funds for political activities includes influencing
the selection, nomination, election, or appointment of one
or more candidates to any Federal, State or local office as
codified in section 501 of the Internal Revenue Code of
1986 (26 U.S.C. 501);
``(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) a requirement that, for the purposes of subparagraphs
(A) and (B), any financial statement submitted by a grantee or
recipient to the Secretary shall be reviewed by an independent
certified public accountant in accordance with Statements on
Standards for Accounting and Review Services, issued by the
American Institute of Certified Public Accountants;
``(D) 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;
``(E) 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
``(F) 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.--For purposes of the application of
Federal civil rights laws, all assistance provided using amounts in the
Capital Magnet Fund shall be considered 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) Prohibited uses.--The Secretary shall, by regulation, set
forth prohibited uses of grant amounts awarded under this section,
which shall include use for--
``(A) political activities;
``(B) advocacy;
``(C) lobbying, whether directly or through other parties;
``(D) counseling services;
``(E) travel expenses; and
``(F) preparing or providing advice on tax returns;
and for the purposes of this paragraph, the prohibited use of funds
for political activities includes influencing the selection,
nomination, election, or appointment of one or more candidates to
any Federal, State or local office as codified in section Sec. 501
of the Internal Revenue Code of 1986 (26 U.S.C. 501).
``(6) Additional 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.
``(7) 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.
``(8) 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;
``(C) a requirement that, for the purposes of subparagraphs
(A) and (B), any financial statement submitted by a grantee to
the Secretary shall be reviewed by an independent certified
public accountant in accordance with Statements on Standards
for Accounting and Review Services, issued by the American
Institute of Certified Public Accountants; and
``(D) 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 mortgages 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) Assets insufficient for obligations.--The assets of
the regulated entity are less than the obligations of the
regulated entity to its creditors and others.
``(B) Substantial dissipation.--Substantial dissipation of
assets or earnings due to--
``(i) any violation of any provision of Federal or
State law; or
``(ii) any unsafe or unsound practice.
``(C) Unsafe or unsound condition.--An unsafe or unsound
condition to transact business.
``(D) Cease and desist orders.--Any willful violation of a
cease and desist order that has become final.
``(E) Concealment.--Any concealment of the books, papers,
records, or assets of the regulated entity, or any refusal to
submit the books, papers, records, or affairs of the regulated
entity, for inspection to any examiner or to any lawful agent
of the Director.
``(F) Inability to meet obligations.--The regulated entity
is likely to be unable to pay its obligations or meet the
demands of its creditors in the normal course of business.
``(G) Losses.--The regulated entity has incurred or is
likely to incur losses that will deplete all or substantially
all of its capital, and there is no reasonable prospect for the
regulated entity to become adequately capitalized (as defined
in section 1364(a)(1)).
``(H) Violations of law.--Any violation of any law or
regulation, or any unsafe or unsound practice or condition that
is likely to--
``(i) cause insolvency or substantial dissipation of
assets or earnings; or
``(ii) weaken the condition of the regulated entity.
``(I) Consent.--The regulated entity, by resolution of its
board of directors or its shareholders or members, consents to
the appointment.
``(J) Undercapitalization.--The regulated entity is
undercapitalized or significantly undercapitalized (as defined
in section 1364(a)(3)), 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.
``(K) Critical undercapitalization.--The regulated entity
is critically undercapitalized, as defined in section
1364(a)(4).
``(L) Money laundering.--The Attorney General notifies the
Director in writing that the regulated entity has been found
guilty of a criminal offense under section 1956 or 1957 of
title 18, United States Code, or section 5322 or 5324 of title
31, United States Code.
``(4) Mandatory receivership.--
``(A) In general.--The Director shall appoint the Agency as
receiver for a regulated entity if the Director determines, in
writing, that--
``(i) the assets of the regulated entity are, and
during the preceding 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 may, 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 may 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) Effect 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 and future effect relating to the Federal Home Loan Banks
(other than any regulation, advisory document, or examination guidance
of the Federal Housing Finance Board that the Director reissues after
the authority of the Director over the Federal Home Loan Banks takes
effect), 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) in section 18 (12 U.S.C. 1438), by striking subsection (b);
(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.
``(d) No Waiver of Privilege.--The Director shall not be deemed to
have waived any privilege applicable to any information concerning a
Federal Home Loan Bank by transferring, or permitting the transfer of,
that information to any other Federal Home Loan Bank for the purposes
set out in subsection (a).''.
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, use such percentage as the
Director may by regulation establish of any subsidized advances
set aside to finance homeownership under subparagraph (A) to
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, except as
the Board determines to be necessary to ensure the maintenance of
property standards; and provided that such new outstanding liens
(A) do not reduce the value of the Government's equity in the
borrower's home; and (B) when combined with the mortgagor's
existing mortgage indebtedness, do not exceed 95 percent of the
home's appraised value at the time of the new second lien.
``(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 shall document
and verify the income of the mortgagor or non-filing status by
procuring (A) an income tax return transcript of the income tax
returns of the mortgagor, or(B) a copy of the income tax returns
from the Internal Revenue Service, for the two most recent years
for which the filing deadline for such years has passed and by any
other method, in accordance with procedures and standards that the
Board shall establish.
``(10) Mortgage fraud.--The mortgagor shall not have been
convicted under Federal or State law for fraud during the 10-year
period ending upon the insurance of the mortgage under this
section.
``(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, or their designees.
``(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'
means the person responsible for servicing of a loan (including the
person who makes or holds a loan if such person also services the
loan).''.
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.--The term ``State'' means any State of the United
States, the District of Columbia, any territory of the United
States, Puerto Rico, Guam, American Samoa, the Trust Territory of
the Pacific Islands, the Virgin Islands, and the Northern Mariana
Islands.
(11) 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.
(12) 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.--Subject to the existence of a licensing or
registration regime, as the case may be, 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, or paid into a State fund, 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, or has established a recovery fund paid
into by the loan originators.
(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.
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 subparagraph (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 the heading for subsection (e)(10)(C), by striking
``Bridge Banks'' and inserting ``Bridge Depository Institutions'';
(3) in subsection (e)(10)(C)(i), by striking ``bridge bank''
and inserting ``bridge depository institution'';
(4) in subsection (m)--
(A) in the subsection heading, by striking ``Banks'' and
inserting ``Depository Institutions'';
(B) by striking ``insured bank'' each place such term
appears and inserting ``insured depository institution'';
(C) by striking ``new bank'' each place such term appears
and inserting ``new depository institution'';
(D) by striking ``such bank'' each place such term appears
and inserting ``such depository institution'';
(E) by striking ``the bank'' each place such term appears
and inserting ``the insured depository institution'';
(F) in paragraph (1), by inserting ``or Federal savings
association'' after ``national bank'';
(G) in paragraph (6), by striking ``only bank'' and
inserting ``only depository institution'';
(H) in paragraph (9), by inserting ``or the Director of the
Office of Thrift Supervision, as appropriate'' after
``Comptroller of the Currency'';
(I) in paragraph (15), by striking ``, but in no event''
and all that follows through ``located'';
(J) in paragraph (16)--
(i) by inserting ``or the Director of the Office of
Thrift Supervision, as appropriate,'' after ``Comptroller
of the Currency'' each place such term appears;
(ii) by striking ``the bank'' each place such term
appears and inserting ``the depository institution'';
(iii) by inserting ``or Federal savings association''
after ``national bank'' each place such term appears;
(iv) by inserting ``or Federal savings associations''
after ``national banks''; and
(v) by striking ``Such bank'' and inserting ``Such
depository institution''; and
(K) in paragraph (18), by inserting ``or the Director of
the Office of Thrift Supervision, as appropriate,'' after
``Comptroller of the Currency'' each place such term appears;
(5) in subsection (n)--
(A) in the subsection heading, by striking ``Banks'' and
inserting ``Depository Institutions'';
(B) by striking ``bridge bank'' each place such term
appears and inserting ``bridge depository institution'';
(C) by striking ``bridge banks'' each place such term
appears (other than in paragraph (1)(A))and inserting ``bridge
depository institutions'';
(D) by striking ``bridge bank's'' each place such term
appears and inserting ``bridge depository institution's'';
(E) by striking ``insured bank'' each place such term
appears and inserting ``insured depository institution'';
(F) by striking ``insured banks'' each place such term
appears and inserting ``insured depository institutions'';
(G) by striking ``such bank'' each place such term appears
(other than in paragraph (4)(J)) and inserting ``such
depository institution'';
(H) by striking ``the bank'' each place such term appears
and inserting ``the depository institution'';
(I) by striking ``bank or banks'' each place such term
appears and inserting ``depository institution or
institutions'';
(J) 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''';
(K) in paragraph (1)(B)--
(i) by striking ``of a bank''; and
(ii) by striking ``of that bank'';
(L) in the heading for paragraph (1)(E), by inserting ``or
federal savings association'' before the period;
(M) 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'';
(N) in paragraph (2)--
(i) by inserting ``or Federal savings association''
after ``national bank'' each place such term appears;
(ii) in subparagraph (A), by inserting ``or the
Director of the Office of Thrift Supervision'' after
``Comptroller of the Currency''; and
(iii) in the heading for subparagraph (B), by inserting
``or federal savings association'' before the period;
(O) in paragraph (4)--
(i) in the matter preceding subparagraph (A), by
inserting ``or Federal savings association, as
appropriate'' after ``national bank'';
(ii) in subparagraph (C), by striking ``under section
5138 of the Revised Statutes or any other'' and inserting
``under any'';
(iii) by inserting ``and the Director of the Office of
Thrift Supervision, as appropriate,'' after ``Comptroller
of the Currency'' each place such term appears;
(iv) in subparagraph (D), by striking ``bank's'' and
inserting ``depository institution's''; and
(v) in subparagraph (H), by striking ``a bank in
default'' and inserting ``a depository institution in
default'';
(P) 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'';
(Q) by striking ``bridge bank'' or ``bridge banks'' as the
case may be in the headings for paragraphs (9), (10), (12), and
(13) and inserting ``bridge depository institution'' or
``bridge depository institutions'' as appropriate;
(R) in paragraph (11), by inserting ``or a Federal savings
association, as the case may be,'' after ``national bank'' each
place such term appears;
(S) in paragraph (12)--
(i) by inserting ``or the Director of the Office of
Thrift Supervision, as appropriate,'' after ``Comptroller
of the Currency'' each place such term appears; and
(ii) by inserting ``or Federal savings associations, as
appropriate'' after ``national banks''; and
(T) 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 such 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, united states code.--Section 783 of title 11,
United States Code, is amended by striking ``bridge bank'' and
inserting ``bridge depository institution''.
(4) Title 26, united states code.--Section 414(l)(2)(G) of the
Internal Revenue Code of 1986, is amended by striking ``bridge
bank'' and inserting ``bridge depository institution''.
(c) Repeal of Deposit Limitation.--Section 11(n)(1)(B)(i) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(n)(1)(B)(i)) is amended
by striking ``, except that'' and all that follows through ``another
insured depository institution''.
(d) Federal Reserve Bank Lending to Bridge Depository
Institutions.--Section 11(n)(5) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(n)(5)) is amended by adding at the end the following
new subparagraph:
``(D) Capital levels.--A bridge depository institution
shall not be considered an undercapitalized depository
institution or a critically undercapitalized depository
institution for purposes of section 10B(b) of the Federal
Reserve Act.''.
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
SEC. 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) of the National
Housing Act (12 U.S.C. 1709(b)(2)) is amended--
(1) by striking subparagraphs (A) and (B) and inserting the
following:
``(A) not to exceed the lesser of--
``(i) in the case of a 1-family residence, 115 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 the sixth
sentence of 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 the sixth sentence of such section
305(a)(2) 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 the sixth sentence of 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) Treatment of Up-Front Premiums.--Section 203(d) of the National
Housing Act (12 U.S.C. 1709(d)) is amended--
(1) by striking ``Notwithstanding any'' and inserting the
following: ``Except as provided in paragraph (2) of this
subsection, notwithstanding'';
(2) by inserting ``(1)'' after ``(d)''; and
(3) by adding at the end the following new paragraph:
``(2) The maximum amount of a mortgage determined under subsection
(b)(2)(B) of this section may not be increased as provided in paragraph
(1).''.
(c) 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; 122 Stat.
620).
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
or its equivalent, 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
plus any initial service charges, appraisal, inspection,
and other fees in connection with the mortgage.
``(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).
This subparagraph shall apply only to mortgages for which the
mortgagee has issued credit approval for the borrower on or
after October 1, 2008.''.
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 mortgagor or any other party shall not be required by
the mortgagee or any other party to purchase an insurance, annuity, or
other similar product as a requirement or condition of eligibility for
insurance under subsection (c), except for title insurance, hazard,
flood, or other peril insurance, or other such products that are
customary and normal under subsection (c), as determined by the
Secretary.
``(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) be equal to 2.0 percent of the maximum claim amount of
the mortgage, up to a maximum claim amount of $200,000 plus 1
percent of any portion of the maximum claim amount that is greater
than $200,000, unless adjusted thereafter on the basis of an
analysis of--
``(A) the costs to mortgagors; and
``(B) the impact on the reverse mortgage market;
``(2) be subject to a minimum allowable amount;
``(3) provide that the origination fee may be fully financed
with the mortgage;
``(4) include any fees paid to correspondent mortgagees
approved by the Secretary;
``(5) have the same effective date as subsection (m)(2)
regarding the limitation on principal obligation; and
``(6) be subject to a maximum origination fee of $6,000, except
that such maximum limit shall be adjusted in accordance with the
annual percentage increase in the Consumer Price Index of the
Bureau of Labor Statistics of the Department of Labor in increments
of $500 only when the percentage increase in such index, when
applied to the maximum origination fee, produces dollar increases
that exceed $500.''.
(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 October 1,
2008, the Secretary of Housing and Urban Development shall not take any
action to implement or carry out 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 October 1, 2008, the Secretary of
Housing and Urban Development shall not take any action to implement or
carry out any other 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) Rehabilitation.--Any rehabilitation of a foreclosed-upon
home or residential property under this section shall be to the
extent necessary to comply with applicable laws, codes, and other
requirements relating to housing safety, quality, and habitability,
in order to sell, rent, or redevelop such homes and properties.
Rehabilitation may include improvements to increase the energy
efficiency or conservation of such homes and properties or provide
a renewable energy source or sources for such homes and properties.
(3) 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.
(4) 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 the amount appropriated under section
2401 of this Act pursuant to this section, not less than 15 percent
shall be provided to counseling organizations that target counseling
services regarding loss mitigation to minority and low-income
homeowners or provide such services in neighborhoods with high
concentrations of minority and low-income homeowners: Provided further,
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 further, 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:
Provided further, That the NRC, in awarding counseling grants under
section 2401 of this Act, may consider, where appropriate, whether the
entity has implemented a written plan for providing in-person
counseling and for making contact, including personal contact, with
defaulted mortgagors, for the purpose of providing counseling or
providing information about available counseling.
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 December 31, 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'' and
inserting ``and'';
(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--HOUSING PRESERVATION
Subtitle A--Preservation Under Federal Housing Programs
SEC. 2801. CLARIFICATION OF DISPOSITION OF CERTAIN PROPERTIES.
Notwithstanding any other provision of law, subtitle A of title II
of the Deficit Reduction Act of 2005 (12 U.S.C. 1701z-11 note) and the
amendments made by such title shall not apply to any transaction
regarding a multifamily real property for which--
(1) the Secretary of Housing and Urban Development has
received, before the date of the enactment of such Act, written
expressions of interest in purchasing the property from both a city
government and the housing commission of such city;
(2) after such receipt, the Secretary acquires title to the
property at a foreclosure sale; and
(3) such city government and housing commission have resolved a
previous disagreement with respect to the disposition of the
property.
SEC. 2802. ELIGIBILITY OF CERTAIN PROJECTS FOR ENHANCED VOUCHER
ASSISTANCE.
Notwithstanding any other provision of law--
(1) the property known as The Heritage Apartments (FHA No. 023-
44804), in Malden, Massachusetts, shall be considered eligible low-
income housing for purposes of the eligibility of residents of the
property for enhanced voucher assistance under section 8(t) of the
United States Housing Act of 1937 (42 U.S.C. 1437f(t)), pursuant to
paragraph (2)(A) of section 223(f) of the Low-Income Housing
Preservation and Resident Homeownership Act of 1990 (12 U.S.C.
4113(f)(2)(A));
(2) such residents shall receive enhanced rental housing
vouchers upon the prepayment of the mortgage loan for the property
under section 236 of the National Housing Act (12 U.S.C. 1715z-1);
and
(3) the Secretary shall approve such prepayment and subsequent
transfer of the property without any further condition, except that
the property shall be restricted for occupancy, until the original
maturity date of the prepaid mortgage loan, only by families with
incomes not exceeding 80 percent of the adjusted median income for
the area in which the property is located, as published by the
Secretary.
Amounts for the enhanced vouchers pursuant to this section shall be
provided under amounts appropriated for tenant-based rental assistance
otherwise authorized under section 8(t) of the United States Housing
Act of 1937.
SEC. 2803. TRANSFER OF CERTAIN RENTAL ASSISTANCE CONTRACTS.
(a) Transfer.--Subject to subsection (c) and notwithstanding any
other provision of law, the Secretary of Housing and Urban Development
shall, at the request of the owner, transfer or authorize the transfer,
of the contracts, restrictions, and debt described in subsection (b)--
(1) on the housing that is owned or managed by Community
Properties of Ohio Management Services LLC or an affiliate of Ohio
Capital Corporation for Housing and located in Franklin County,
Ohio, to other properties located in Franklin County, Ohio; and
(2) on the housing that is owned or managed by The Model Group,
Inc., and located in Hamilton County, Ohio, to other properties
located in Hamilton County, Ohio.
(b) Contracts, Restrictions, and Debt Covered.--The contracts,
restrictions, and debt described in this subsection are as follows:
(1) All or a portion of a project-based rental assistance
housing assistance payments contract under section 8 of the United
States Housing Act of 1937 (42 U.S.C. 1437f).
(2) Existing Federal use restrictions, including without
limitation use agreements, regulatory agreements, and accommodation
agreements.
(3) Any subordinate debt held by the Secretary or assigned and
any mortgages securing such debt, all related loan and security
documentation and obligations, and reserve and escrow balances.
(c) Retention of Same Number of Units and Amount of Assistance.--
Any transfer pursuant to subsection (a) shall result in--
(1) a total number of dwelling units (including units retained
by the owners and units transferred) covered by assistance
described in subsection (b)(1) after the transfer remaining the
same as such number assisted before the transfer, with such
increases or decreases in unit sizes as may be contained in a plan
approved by a local planning or development commission or
department; and
(2) no reduction in the total amount of the housing assistance
payments under contracts described in subsection (b)(1).
SEC. 2804. PUBLIC HOUSING DISASTER RELIEF.
Section 9 of the United States Housing Act of 1937 (42 U.S.C.
1437g) is amended--
(1) by striking subsection (k); and
(2) by redesignating subsections (l), (m), and (n) as
subsections (k), (l), and (m), respectively.
SEC. 2805. PRESERVATION OF CERTAIN AFFORDABLE HOUSING.
Notwithstanding any other provision of law--
(1) for the property known as Nihonmachi Terrace (FHA No. 121-
44284), in San Francisco, California, upon the refinancing of the
existing federally insured mortgage pursuant to section 236(b) of
the National Housing Act (12 U.S.C. 1715z-1(b)), unassisted low and
moderate-income residents of the property shall be deemed eligible
for and shall receive voucher assistance under section 8(o) of the
United States Housing Act of 1937 (42 U.S.C. 1437f(o)); and
(2) to preserve the affordability of the property, the housing
authority shall utilize such additional voucher assistance pursuant
to subsection 8(o)(13) of the United States Housing Act of 1937,
without regard to the limitations of subparagraphs (B) and (D) of
that subsection.
Amounts for the vouchers pursuant to this section shall be provided
under amounts appropriated for tenant-based rental assistance otherwise
authorized.
Subtitle B--Coordination of Federal Housing Programs and Tax Incentives
for Housing
SEC. 2831. SHORT TITLE.
This subtitle may be cited as the ``Housing Tax Credit Coordination
Act of 2008''.
SEC. 2832. APPROVALS BY DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.
(a) Administrative and Procedural Changes.--
(1) In general.--The Secretary of Housing and Urban Development
(in this section referred to as the ``Secretary'') shall, not later
than the expiration of the 6-month period beginning upon after the
date of the enactment of this Act, implement administrative and
procedural changes to expedite approval of multifamily housing
projects under the jurisdiction of the Department of Housing and
Urban Development that meet the requirements of the Secretary for
such approvals.
(2) Projects.--The multifamily housing projects referred to in
paragraph (1) shall include--
(A) projects for which assistance is provided by such
Department in conjunction with any low-income housing tax
credits under section 42 of the Internal Revenue Code of 1986
or tax-exempt housing bonds; and
(B) existing public housing projects and assisted housing
projects, for which approval of the Secretary is necessary for
transactions, in conjunction with any such low-income housing
tax credits or tax-exempt housing bonds, involving the
preservation or rehabilitation of the project.
(3) Changes.--The administrative and procedural changes
referred to in paragraph (1) shall include all actions necessary to
carry out paragraph (1), which may include--
(A) improving the efficiency of approval procedures;
(B) simplifying approval requirements,
(C) establishing time deadlines or target deadlines for
required approvals;
(D) modifying division of approval authority between field
and national offices;
(E) improving outreach to project sponsors regarding
information that is required to be submitted for such
approvals;
(F) requesting additional funding for increasing staff, if
necessary; and
(G) any other actions which would expedite approvals.
Any such changes shall be made in a manner that provides for full
compliance with any existing requirements under law or regulation
that are designed to protect families receiving public and assisted
housing assistance, including income targeting, rent, and fair
housing provisions, and shall also comply with requirements
regarding environmental review and protection and wages paid to
laborers.
(b) Consultation.--The Secretary shall consult with the
Commissioner of the Internal Revenue Service and take such actions as
are appropriate in conjunction with such consultation to simplify the
coordination of rules, regulations, forms, and approval requirements
for multifamily housing projects projects for which assistance is
provided by such Department in conjunction with any low-income housing
tax credits under section 42 of the Internal Revenue Code of 1986 or
tax-exempt housing bonds.
(c) Recommendations.--In implementing the changes required under
this section, the Secretary shall solicit recommendations regarding
such changes from project owners and sponsors, investors and
stakeholders in housing tax credits, State and local housing finance
agencies, public housing agencies, tenant advocates, and other
stakeholders in such projects.
(d) Report.--Not later than the expiration of the 9-month period
beginning on the date of the enactment of this Act, the Secretary shall
submit a report to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban
Affairs of the Senate that--
(1) identifies the actions taken by the Secretary to comply
with this section;
(2) includes information regarding any resulting improvements
in the expedited approval for multifamily housing projects;
(3) identifies recommendations made pursuant to subsection (c);
(4) identifies actions taken by the Secretary to implement the
provisions in the amendments made by sections 2834 and 2835 of this
Act; and
(5) makes recommendations for any legislative changes that are
needed to facilitate prompt approval of assistance for such
projects.
SEC. 2833. PROJECT APPROVALS BY RURAL HOUSING SERVICE.
Section 515(h) of the Housing Act of 1949 (42 U.S.C. 1485) is
amended--
(1) by inserting ``(1) Condition.--'' after ``(h)''; and
(2) by adding at the end the following new paragraphs:
``(2) Actions to expedite project approvals.--
``(A) In general.--The Secretary shall take actions to
facilitate timely approval of requests to transfer ownership or
control, for the purpose of rehabilitation or preservation, of
multifamily housing projects for which assistance is provided
by the Secretary of Agriculture in conjunction with any low-
income housing tax credits under section 42 of the Internal
Revenue Code of 1986 or tax-exempt housing bonds.
``(B) Consultation.--The Secretary of Agriculture shall
consult with the Commissioner of the Internal Revenue Service
and take such actions as are appropriate in conjunction with
such consultation to simplify the coordination of rules,
regulations, forms (including applications forms for project
transfers), and approval requirements multifamily housing
projects for which assistance is provided by the Secretary of
Agriculture in conjunction with any low-income housing tax
credits under section 42 of the Internal Revenue Code of 1986
or tax-exempt housing bonds.
``(C) Existing requirements.--Any actions taken pursuant to
this paragraph shall be taken in a manner that provides for
full compliance with any existing requirements under law or
regulation that are designed to protect families receiving
Federal housing assistance, including income targeting, rent,
and fair housing provisions, and shall also comply with
requirements regarding environmental review and protection and
wages paid to laborers.
``(D) Recommendations.--In implementing the changes
required under this paragraph, the Secretary shall solicit
recommendations regarding such changes from project owners and
sponsors, investors and stakeholders in housing tax credits,
State and local housing finance agencies, tenant advocates, and
other stakeholders in such projects.''.
SEC. 2834. USE OF FHA LOANS WITH HOUSING TAX CREDITS.
(a) Subsidy Layering Requirements.--Subsection (d) of section 102
of the Department of Housing and Urban Development Reform Act of 1989
(42 U.S.C. 3545(d)) is amended--
(1) in the first sentence, by inserting after ``assistance
within the jurisdiction of the Department'' the following: ``, as
such term is defined in subsection (m), except that for purposes of
this subsection such term shall not include any mortgage insurance
provided pursuant to title II of the National Housing Act (12
U.S.C. 1707 et seq.)''; and
(2) in the second sentence, by inserting ``such'' before
``assistance''.
(b) Cost Certification.--Section 227 of National Housing Act (12
U.S.C. 1715r) is amended--
(1) in the matter preceding paragraph (a) (relating to a
definition of ``new or rehabilitated multifamily housing'')--
(A) in the first sentence--
(i) by striking ``Notwithstanding'' and inserting
``Except as provided in subsection (b) and
notwithstanding''; and
(ii) by redesignating clauses (a) and (b) as clauses
(A) and (B), respectively; and
(B) by striking ``As used in this section--'';
(2) in paragraph (c) (relating to a definition of ``actual
cost'')--
(A) in clause (i), by redesignating clauses (1) and (2) as
clauses (I) and (II), respectively; and
(B) in clause (ii), by redesignating clauses (1) and (2) as
clauses (I) and (II), respectively;
(3) by redesignating paragraphs (a), (b), and (c) as paragraphs
(1), (2), and (3), respectively;
(4) by inserting before paragraph (1) (as so redesignated by
paragraph (3) of this subsection) the following:
``(b) Exemption for Certain Projects Assisted With Low-Income
Housing Tax Credit.--In the case of any mortgage insured under any
provision of this title that is executed in connection with the
construction, rehabilitation, purchase, or refinancing of a multifamily
housing project for which equity provided through any low-income
housing tax credit pursuant to section 42 of the Internal Revenue Code
of 1986 (26 U.S.C. 42), if the Secretary determines at the time of
issuance of the firm commitment for insurance that the ratio of the
loan proceeds to the actual cost of the project is less than 80
percent, subsection (a) of this section shall not apply.
``(c) Definitions.--For purposes of this section, the following
definitions shall apply:''; and
(5) by inserting ``(a) Requirement.--'' after ``227.''.
(c) Other Provisions Regarding Treatment of Mortgages Covering Tax
Credit Projects.--Title II of the National Housing Act is amended by
inserting after section 227 (12 U.S.C. 1715r) the following new
section:
``SEC. 228. TREATMENT OF MORTGAGES COVERING TAX CREDIT PROJECTS.
``(a) Definition.--For purposes of this section, the term `insured
mortgage covering a tax credit project' means a mortgage insured under
any provision of this title that is executed in connection with the
construction, rehabilitation, purchase, or refinancing of a multifamily
housing project for which equity provided through any low-income
housing tax credit pursuant to section 42 of the Internal Revenue Code
of 1986 (26 U.S.C. 42).
``(b) Acceptance of Letters of Credit.--In the case of an insured
mortgage covering a tax credit project, the Secretary may not require
the escrowing of equity provided by the sale of any low-income housing
tax credits for the project pursuant to section 42 of the Internal
Revenue Code of 1986, or any other form of security, such as a letter
of credit.
``(c) Asset Management Requirements.--In the case of an insured
mortgage covering a tax credit project for which project the applicable
tax credit allocating agency is causing to be performed periodic
inspections in compliance with the requirements of section 42 of the
Internal Revenue Code of 1986, such project shall be exempt from
requirements imposed by the Secretary regarding periodic inspections of
the property by the mortgagee. To the extent that other compliance
monitoring is being performed with respect to such a project by such an
allocating agency pursuant to such section 42, the Secretary shall, to
the extent that the Secretary determines such monitoring is sufficient
to ensure compliance with any requirements established by the
Secretary, accept such agency's evidence of compliance for purposes of
determining compliance with the Secretary's requirements.
``(d) Streamlined Processing Pilot Program.--
``(1) In general.--The Secretary shall establish a pilot
program to demonstrate the effectiveness of streamlining the review
process, which shall include all applications for mortgage
insurance under any provision of this title for mortgages executed
in connection with the construction, rehabilitation, purchase, or
refinancing of a multifamily housing project for which equity
provided through any low-income housing tax credit pursuant to
section 42 of the Internal Revenue Code of 1986. The Secretary
shall issue instructions for implementing the pilot program under
this subsection not later than the expiration of the 180-day period
beginning upon the date of the enactment of the Housing Tax Credit
Coordination Act of 2008.
``(2) Requirements.--Such pilot program shall provide for--
``(A) the Secretary to appoint designated underwriters, who
shall be responsible for reviewing such mortgage insurance
applications and making determinations regarding the
eligibility of such applications for such mortgage insurance in
lieu of the processing functions regarding such applications
that are otherwise performed by other employees of the
Department of Housing and Urban Development;
``(B) submission of applications for such mortgage
insurance by mortgagees who have previously been expressly
approved by the Secretary; and
``(C) determinations regarding the eligibility of such
applications for such mortgage insurance to be made by the
chief underwriter pursuant to requirements prescribed by the
Secretary, which shall include requiring submission of reports
regarding applications of proposed mortgagees by third-party
entities expressly approved by the chief underwriter.''.
SEC. 2835. OTHER HUD PROGRAMS.
(a) Section 8 Assistance.--
(1) PHA project-based assistance.--Section 8(o)(13) of the
United States Housing Act of 1937 (42 U.S.C. 1437f(o)(13)) is
amended--
(A) in subparagraph (D)(i)--
(i) by striking ``building'' and inserting ``project'';
and
(ii) by adding at the end the following: ``For purposes
of this subparagraph, the term''project`` means a single
building, multiple contiguous buildings, or multiple
buildings on contiguous parcels of land.'';
(B) in the first sentence of subparagraph (F), by striking
``10 years'' and inserting ``15 years'';
(C) in subparagraph (G)--
(i) by inserting after the period at the end of the
first sentence the following: ``Such contract may, at the
election of the public housing agency and the owner of the
structure, specify that such contract shall be extended for
renewal terms of up to 15 years each, if the agency makes
the determination required by this subparagraph and the
owner is in compliance with the terms of the contract.'';
and
(ii) by adding at the end the following: ``A public
housing agency may agree to enter into such a contract at
the time it enters into the initial agreement for a housing
assistance payment contract or at any time thereafter that
is before the expiration of the housing assistance payment
contract.'';
(D) in subparagraph (H), by inserting before the period at
the end of the first sentence the following: ``, except that in
the case of a contract unit that has been allocated low-income
housing tax credits and for which the rent limitation pursuant
to such section 42 is less than the amount that would otherwise
be permitted under this subparagraph, the rent for such unit
may, in the sole discretion of a public housing agency, be
established at the higher section 8 rent, subject only to
paragraph (10)(A)'';
(E) in subparagraph (I)(i), by inserting before the
semicolon the following: ``, except that the contract may
provide that the maximum rent permitted for a dwelling unit
shall not be less than the initial rent for the dwelling unit
under the initial housing assistance payments contract covering
the unit''; and
(F) by adding at the end the following new subparagraphs:
``(L) Use in cooperative housing and elevator buildings.--A
public housing agency may enter into a housing assistance
payments contract under this paragraph with respect to--
``(i) dwelling units in cooperative housing; and
``(ii) notwithstanding subsection (c), dwelling units
in a high-rise elevator project, including such a project
that is occupied by families with children, without review
and approval of the contract by the Secretary.
``(M) Reviews.--
``(i) Subsidy layering.--A subsidy layering review in
accordance with section 102(d) of the Department of Housing
and Urban Development Reform Act of 1989 (42 U.S.C.
3545(d)) shall not be required for assistance under this
paragraph in the case of a housing assistance payments
contract for an existing structure, or if a subsidy
layering review has been conducted by the applicable State
or local agency.
``(ii) Environmental review.--A public housing agency
shall not be required to undertake any environmental review
before entering into a housing assistance payments contract
under this paragraph for an existing structure, except to
the extent such a review is otherwise required by law or
regulation.''.
(2) Voucher program rent reasonableness.--Section 8(o)(10) of
the United States Housing Act of 1937 (42 U.S.C. 1437f(o)(10)) is
amended by adding at the end the following new subparagraph;
``(F) Tax credit projects.--In the case of a dwelling unit
receiving tax credits pursuant to section 42 of the Internal
Revenue Code of 1986 or for which assistance is provided under
subtitle A of title II of the Cranston Gonzalez National
Affordable Housing Act of 1990, for which a housing assistance
contract not subject to paragraph (13) of this subsection is
established, rent reasonableness shall be determined as
otherwise provided by this paragraph, except that--
``(i) comparison with rent for units in the private,
unassisted local market shall not be required if the rent
is equal to or less than the rent for other comparable
units receiving such tax credits or assistance in the
project that are not occupied by families assisted with
tenant-based assistance under this subsection; and
``(ii) the rent shall not be considered reasonable for
purposes of this paragraph if it exceeds the greater of--
``(I) the rents charged for other comparable units
receiving such tax credits or assistance in the project
that are not occupied by families assisted with tenant-
based assistance under this subsection; and
``(II) the payment standard established by the
public housing agency for a unit of the size
involved.''.
(b) Section 202 Housing for Elderly Persons.--Subsection (f) of
section 202 of the Housing Act of 1959 (12 U.S.C. 1701q(f)) is
amended--
(1) by striking ``Selection Criteria.--'' and inserting
``Initial Selection Criteria and Processing.-- (1) Selection
criteria.--'';
(2) by redesignating paragraphs (1) through (7) as
subparagraphs (A) through (G), respectively; and
(3) by adding at the end the following new paragraph:
``(2) Delegated processing.--
``(A) In issuing a capital advance under this subsection
for any project for which financing for the purposes described
in the last two sentences of subsection (b) is provided by a
combination of a capital advance under subsection (c)(1) and
sources other than this section, within 30 days of award of the
capital advance, the Secretary shall delegate review and
processing of such projects to a State or local housing agency
that--
``(i) is in geographic proximity to the property;
``(ii) has demonstrated experience in and capacity for
underwriting multifamily housing loans that provide housing
and supportive services;
``(iii) may or may not be providing low-income housing
tax credits in combination with the capital advance under
this section, and
``(iv) agrees to issue a firm commitment within 12
months of delegation.
``(B) The Secretary shall retain the authority to process
capital advances in cases in which no State or local housing
agency has applied to provide delegated processing pursuant to
this paragraph or no such agency has entered into an agreement
with the Secretary to serve as a delegated processing agency.
``(C) An agency to which review and processing is delegated
pursuant to subparagraph (A) may assess a reasonable fee which
shall be included in the capital advance amounts and may
recommend project rental assistance amounts in excess of those
initially awarded by the Secretary. The Secretary shall develop
a schedule for reasonable fees under this subparagraph to be
paid to delegated processing agencies, which shall take into
consideration any other fees to be paid to the agency for other
funding provided to the project by the agency, including bonds,
tax credits, and other gap funding.
``(D) Under such delegated system, the Secretary shall
retain the authority to approve rents and development costs and
to execute a capital advance within 60 days of receipt of the
commitment from the State or local agency. The Secretary shall
provide to such agency and the project sponsor, in writing, the
reasons for any reduction in capital advance amounts or project
rental assistance and such reductions shall be subject to
appeal.''.
(c) McKinney-Vento Act Homeless Assistance Under Shelter Plus Care
Program.--
(1) Term of contracts with owner or lessor.--Part I of subtitle
F of the McKinney-Vento Homeless Assistance Act is amended--
(A) by redesignating sections 462 and 463 (42 U.S.C.
11403g, 11403h) as sections 463 and 464, respectively;
(B) by striking ``section 463'' each place such term
appears in sections 471, 476, 481, 486, and 488 (42 U.S.C.
11404, 11405, 11406, 11407, and 11407b) and inserting ``section
464''; and
(C) by inserting after section 461 (42 U.S.C. 11403f) the
following new section:
``SEC. 462. TERM OF CONTRACT WITH OWNER OR LESSOR.
``An applicant under this subtitle may enter into a contract with
the owner or lessor of a property that receives rental assistance under
this subtitle having a term of not more than 15 years, subject to the
availability of sufficient funds provided in appropriation Acts for the
purpose of renewing expiring contracts for assistance payments. Such
contract may, at the election of the applicant and owner or lessor,
specify that such contract shall be extended for renewal terms of not
more than 15 years each, subject to the availability of sufficient such
appropriated funds.''.
(2) Project-based rental assistance contracts.--Section 478(a)
of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11405a(a))
is amended by inserting before the period at the end the following:
``; except that, in the case of any project for which equity is
provided through any low-income housing tax credit pursuant to
section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42), if
an expenditure of such amount for each unit (including the prorated
share of such work) is required to make the structure decent, safe,
and sanitary, and the owner agrees to reach initial closing on
permanent financing from such other sources within two years and
agrees to carry out the rehabilitation with resources other than
assistance under this subtitle within 60 months of notification of
grant approval, the contract shall be for a term of 10 years
(except that such period may be extended by up to 1 year by the
Secretary, which extension shall be granted unless the Secretary
determines that the sponsor is primarily responsible for the
failure to meet such deadline)''.
(d) Data Collection on Tenants of Housing Tax Credit Projects.--
Title I of the United States Housing Act of 1937 (42 U.S.C. 1437 et
seq.) is amended by adding at the end the following new section:
``SEC. 36. COLLECTION OF INFORMATION ON TENANTS IN TAX CREDIT PROJECTS.
``(a) In General.--Each State agency administering tax credits
under section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42)
shall furnish to the Secretary of Housing and Urban Development, not
less than annually, information concerning the race, ethnicity, family
composition, age, income, use of rental assistance under section 8(o)
of the United States Housing Act of 1937 or other similar assistance,
disability status, and monthly rental payments of households residing
in each property receiving such credits through such agency. Such State
agencies shall, to the extent feasible, collect such information
through existing reporting processes and in a manner that minimizes
burdens on property owners. In the case of any household that continues
to reside in the same dwelling unit, information provided by the
household in a previous year may be used if the information is of a
category that is not subject to change or if information for the
current year is not readily available to the owner of the property.
``(b) Standards.--The Secretary shall establish standards and
definitions for the information collected under subsection (a), provide
States with technical assistance in establishing systems to compile and
submit such information, and, in coordination with other Federal
agencies administering housing programs, establish procedures to
minimize duplicative reporting requirements for properties assisted
under multiple housing programs.
``(c) Public Availability.--The Secretary shall, not less than
annually, compile and make publicly available the information submitted
to the Secretary pursuant to subsection (a).
``(d) Authorization of Appropriations.--There is authorized to be
appropriated for the cost of activities required under subsections (b)
and (c) $2,500,000 for fiscal year 2009 and $900,000 for each of fiscal
years 2010 through 2013.''.
TITLE IX--MISCELLANEOUS
SEC. 2901. HOMELESS ASSISTANCE.
(a) Appropriations.--Section 726 of the McKinney-Vento Homeless
Assistance Act (42 U.S.C. 11435) is amended by striking ``$70,000,000''
and all that follows and inserting ``$100,000,000 for fiscal year 2009
and such sums as may be necessary for each subsequent fiscal year.''.
(b) Emergency Assistance.--Section 722 of the McKinney-Vento
Homeless Assistance Act (42 U.S.C. 11432) is amended by adding at the
end the following:
``(h) Special Rule for Emergency Assistance.--
``(1) Emergency assistance.--
``(A) Reservation of amounts.--Subject to paragraph (4) and
notwithstanding any other provision of this title, the
Secretary shall use funds appropriated under section 726 for
fiscal year 2009, but not to exceed $30,000,000, for the
purposes of providing emergency assistance through grants.
``(B) General authority.--The Secretary shall use the funds
to make grants to State educational agencies under paragraph
(2), to enable the agencies to make subgrants to local
educational agencies under paragraph (3), to provide activities
described in section 723(d) for individuals referred to in
subparagraph (C).
``(C) Eligible individuals.--Funds made available under
this subsection shall be used to provide such activities for
eligible individuals, consisting of homeless children and
youths, and their families, who have become homeless due to
home foreclosure, including children and youths, and their
families, who became homeless when lenders foreclosed on
properties rented by the families.
``(2) Grants to state educational agencies.--
``(A) Disbursement.--The Secretary shall make grants with
funds provided under paragraph (1)(A) to State educational
agencies based on need, consistent with the number of eligible
individuals described in paragraph (1)(C) in the States
involved, as determined by the Secretary.
``(B) Assurance.--To be eligible to receive a grant under
this paragraph, a State educational agency shall provide an
assurance to the Secretary that the State educational agency,
and each local educational agency receiving a subgrant from the
State educational agency under this subsection shall ensure
that the activities carried out under this subsection are
consistent with the activities described in section 723(d).
``(3) Subgrants to local educational agencies.--A State
educational agency that receives a grant under paragraph (2) shall
use the funds made available through the grant to make subgrants to
local educational agencies. The State educational agency shall make
the subgrants to local educational agencies based on need,
consistent with the number of eligible individuals described in
paragraph (1)(C) in the areas served by the local educational
agencies, as determined by the State educational agency.
``(4) Restriction.--The Secretary--
``(A) shall determine the amount (if any) by which the
funds appropriated under section 726 for fiscal year 2009
exceed $70,000,000; and
``(B) may only use funds from that amount to carry out this
subsection.''.
SEC. 2902. INCREASING ACCESS AND UNDERSTANDING OF ENERGY EFFICIENT
MORTGAGES.
(a) Definition.--As used in this section, the term ``energy
efficient mortgage'' has the same meaning as given that term in
paragraph (24) of section 104 of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12704(24)).
(b) Recommendations to Eliminate Barriers to Use of Energy
Efficient Mortgages.--
(1) In general.--Not later than 180 days after the date of
enactment of this section, the Secretary of Housing and Urban
Development, in conjunction with the Secretary of Energy and the
Administrator of the Environmental Protection Agency, shall consult
with the residential mortgage industry and States to develop
recommendations to eliminate the barriers that exist to increasing
the availability, use, and purchase of energy efficient mortgages,
including such barriers as--
(A) the lack of reliable and accessible information on such
mortgages, including estimated energy savings and other
benefits of energy efficient housing;
(B) the confusion regarding underwriting requirements and
differences among various energy efficient mortgage programs;
(C) the complex and time consuming process of securing such
mortgages;
(D) the lack of publicly available research on the default
risk of such mortgages; and
(E) the availability of certified or accredited home energy
rating services.
(2) Report to congress.--The Secretary of Housing and Urban
Development shall submit a report to Congress that--
(A) summarizes the recommendations developed under
paragraph (1); and
(B) includes any recommendations for statutory, regulatory,
or administrative changes that the Secretary deems necessary to
institute such recommendations.
(c) Energy Efficient Mortgages Outreach Campaign.--
(1) In general.--The Secretary of Housing and Urban
Development, in consultation and coordination with the Secretary of
Energy, the Administrator of the Environmental Protection Agency,
and State Energy and Housing Finance Directors, shall carry out an
education and outreach campaign to inform and educate consumers,
home builders, residential lenders, and other real estate
professionals on the availability, benefits, and advantages of--
(A) improved energy efficiency in housing; and
(B) energy efficient mortgages.
(2) Authorization of appropriations.--There are authorized to
be appropriated such sums as are necessary to carry out the
education and outreach campaign described under paragraph (1).
DIVISION C--TAX-RELATED PROVISIONS
SEC. 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.
(c) Table of Contents.--The table of contents for this division is
as follows:
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.
Sec. 3027. Transfer of funds appropriated to carry out 2008 recovery
rebates for individuals.
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 the AMT and research credits in lieu
of bonus depreciation.
Sec. 3082. Certain GO Zone incentives.
Sec. 3083. Increase in statutory limit on the public debt.
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. Delay in application of worldwide allocation of interest.
Sec. 3094. Time for payment of corporate estimated taxes.
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.--
(1) In general.--Subsection (b) of section 42 is amended by
striking paragraph (1), by redesignating paragraph (2) as paragraph
(1), and by inserting after paragraph (1), as so redesignated, the
following new paragraph:
``(2) 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.''.
(2) Conforming amendments.--
(A) Subsection (b) of section 42, as amended by paragraph
(1), is amended by striking ``For purposes of this section--''
and all that follows through ``means the appropriate'' and
inserting the following:
``(1) Determination of applicable percentage.--For purposes of
this section, the term `applicable percentage' means, with respect
to any building, the appropriate''.
(B) Clause (i) of section 42(b)(1)(B), as redesignated by
paragraph (1), is amended by striking ``a building described in
paragraph (1)(A)'' and inserting ``a new building which is not
federally subsidized for the taxable year''.
(C) Clause (ii) of section 42(b)(1)(B), as redesignated by
paragraph (1), is amended by striking ``a building described in
paragraph (1)(B)'' and inserting ``a building not described in
clause (i)''.
(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,
section 515 of the Housing Act of 1949, or any other
housing program administered by the Department of Housing
and Urban Development or by the Rural Housing Service of
the Department of Agriculture.
``(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 to buildings with respect to which housing credit
dollar amounts are 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 buildings financed with bonds issued pursuant to
allocations made 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
(g) of section 42 is amended by adding at the end the following new
paragraph:
``(9) Clarification of general public use requirement.--A
project does not fail to meet the general public use requirement
solely because of occupancy restrictions or preferences that favor
tenants--
``(A) with special needs,
``(B) who are members of a specified group under a Federal
program or State program or policy that supports housing for
such a specified group, or
``(C) who are involved in artistic or literary
activities.''.
(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 on or 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 $7,500.
``(B) Married individuals filing separately.--In the case
of a married individual filing a separate return, subparagraph
(A) shall be applied by substituting `$3,750' for `$7,500'.
``(C) Other individuals.--If two or more individuals who
are not married purchase a principal residence, the amount of
the credit allowed under subsection (a) shall be allocated
among such individuals in such manner as the Secretary may
prescribe, except that the total amount of the credits allowed
to all such individuals shall not exceed $7,500.
``(2) Limitation based on modified adjusted gross income.--
``(A) In general.--The amount allowable as a credit under
subsection (a) (determined without regard to this paragraph)
for the taxable year shall be reduced (but not below zero) by
the amount which bears the same ratio to the amount which is so
allowable as--
``(i) the excess (if any) of--
``(I) the taxpayer's modified adjusted gross income
for such taxable year, over
``(II) $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 such property, and
``(ii) the basis of the property in the hands of the
person acquiring such property 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) Return requirement.--If the tax imposed by this chapter
for the taxable year is increased under this subsection, the
taxpayer shall, notwithstanding section 6012, be required to file a
return with respect to the taxes imposed under this subtitle.
``(7) 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) Election to Treat Purchase in Prior Year.--In the case of a
purchase of a principal residence after December 31, 2008, and before
July 1, 2009, a taxpayer may elect to treat such purchase as made on
December 31, 2008, for purposes of this section (other than subsection
(c)).
``(h) Application of Section.--This section shall only apply to a
principal residence purchased by the taxpayer on or after April 9,
2008, and before July 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 ``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:
``(7) Real property tax deduction.--For purposes of paragraph
(1), the real property tax deduction is the lesser of--
``(A) the amount allowable as a deduction under this
chapter for State and local taxes described in section
164(a)(1), or
``(B) $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.''.
(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.
SEC. 3027. TRANSFER OF FUNDS APPROPRIATED TO CARRY OUT 2008 RECOVERY
REBATES FOR INDIVIDUALS.
Of the funds made available by section 101(e)(1)(A) of the Economic
Stimulus Act of 2008 (Public Law 110-185), the Secretary of the
Treasury may transfer funds among the accounts specified in such
section to carry out section 6428 of the Internal Revenue Code of 1986.
The Secretary shall provide advance notification of any such transfer
to the Committees on Appropriations of the House of Representatives and
the Senate, and any transfer greater than $5,000,000 shall be subject
to the approval of such Committees.
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 dealing, or engaging in substantial and regular
trading, 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) 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 for
purposes of paragraphs (2) or (3), 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.
(a) In General.--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''.
(b) Retention of Existing Law.--Section 857(b)(6) is amended--
(1) by striking subparagraph (G) and redesignating
subparagraphs (H) and (I) as subparagraphs (G) and (H),
respectively, and
(2) in subparagraph (G), as so redesignated, by adding at the
end the following: ``For purposes of the preceding sentence, the
reference to subparagraph (D) shall be a reference to such
subparagraph as in effect on the day before the enactment of the
Housing Assistance Tax Act of 2008, as modified by subparagraph (G)
as so in effect.''.
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 THE AMT AND RESEARCH 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 the amt and research credits in
lieu of bonus depreciation.--
``(A) In general.--If a corporation elects to have this
paragraph apply for the first taxable year of the taxpayer
ending after March 31, 2008, in the case of such taxable year
and each subsequent taxable year--
``(i) paragraph (1) shall not apply to any eligible
qualified property placed in service by the taxpayer,
``(ii) the applicable depreciation method used under
this section with respect to such property shall be the
straight line method, and
``(iii) each of the limitations described in
subparagraph (B) for any such taxable year shall be
increased by the bonus depreciation amount which is--
``(I) determined for such taxable year under
subparagraph (C), and
``(II) allocated to such limitation under
subparagraph (E).
``(B) Limitations to be increased.--The limitations
described in this subparagraph are--
``(i) the limitation imposed by section 38(c), and
``(ii) the limitation imposed by section 53(c).
``(C) Bonus depreciation amount.--For purposes of this
paragraph--
``(i) In general.--The bonus depreciation amount for
any taxable year is an amount equal to 20 percent of the
excess (if any) of--
``(I) the aggregate amount of depreciation which
would be allowed under this section for eligible
qualified property placed in service by the taxpayer
during such taxable year if paragraph (1) applied to
all such property, over
``(II) the aggregate amount of depreciation which
would be allowed under this section for eligible
qualified property placed in service by the taxpayer
during such taxable year if paragraph (1) did not apply
to any such property.
The aggregate amounts determined under subclauses (I) and
(II) shall be determined without regard to any election
made under subsection (b)(2)(C), (b)(3)(D), or (g)(7) and
without regard to subparagraph (A)(ii).
``(ii) Maximum amount.--The bonus depreciation amount
for any taxable year shall not exceed the maximum increase
amount under clause (iii), reduced (but not below zero) by
the sum of the bonus depreciation amounts for all preceding
taxable years.
``(iii) Maximum increase amount.--For purposes of
clause (ii), the term `maximum increase amount' means, with
respect to any corporation, the lesser of--
``(I) $30,000,000, or
``(II) 6 percent of the sum of the business credit
increase amount, and the AMT credit increase amount,
determined with respect to such corporation under
subparagraph (E).
``(iv) Aggregation rule.--All corporations which are
treated as a single employer under section 52(a) shall be
treated--
``(I) as 1 taxpayer for purposes of this paragraph,
and
``(II) as having elected the application of this
paragraph if any such corporation so elects.
``(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 paragraph--
``(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,
and
``(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.
``(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 for the taxable year which is
to be allocated to each of the limitations described in
subparagraph (B) for such taxable year.
``(ii) Limitation on allocations.--The portion of the
bonus depreciation amount which may be allocated under
clause (i) to the limitations described in subparagraph (B)
for any taxable year shall not exceed--
``(I) in the case of the limitation described in
subparagraph (B)(i), the excess of the business credit
increase amount over the bonus depreciation amount
allocated to such limitation for all preceding taxable
years, and
``(II) in the case of the limitation described in
subparagraph (B)(ii), the excess of the AMT credit
increase amount over the bonus depreciation amount
allocated to such limitation for all preceding taxable
years.
``(iii) Business credit increase amount.--For purposes
of this paragraph, the term `business credit increase
amount' means the amount equal to the portion of the credit
allowable under section 38 (determined without regard to
subsection (c) thereof) for the first taxable year ending
after March 31, 2008, 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).
``(iv) AMT credit increase amount.--For purposes of
this paragraph, the term `AMT credit increase amount' means
the amount equal to the portion of the minimum tax credit
under section 53(b) for the first taxable year ending after
March 31, 2008, determined by taking into account only the
adjusted minimum tax 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.--For purposes of section 6401(b),
the aggregate increase in the credits allowable under part IV
of subchapter A for any taxable year resulting from the
application of this paragraph shall be treated as allowed under
subpart C of such part (and not any other subpart).
``(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) Partnerships with electing partners.--In the
case of a corporation making an election under subparagraph
(A) and which is a partner in a partnership, for purposes
of determining such corporation's distributive share of
partnership items under section 702--
``(I) paragraph (1) shall not apply to any eligible
qualified property, and
``(II) the applicable depreciation method used
under this section with respect to such property shall
be the straight line method.
``(iii) Special rule for passenger aircraft.--In the
case of any passenger aircraft, the written binding
contract limitation under paragraph (2)(A)(iii)(I) shall
not apply for purposes of subparagraphs (C)(i)(I) and
(D).''.
(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 with
respect to such property under section 168 of such Code,
(ii) the applicable depreciation method used with
respect to such property shall be the straight line method,
and
(C) 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 section 168(k)(4) of such Code 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.
SEC. 3083. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT.
Subsection (b) of section 3101 of title 31, United States Code, is
amended by striking out the dollar limitation contained in such
subsection and inserting in lieu thereof $10,615,000,000,000.
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 payment
transactions are made, and
``(2) the gross amount of the reportable payment 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 entity, and
``(B) in the case of a third party network transaction, the
third party settlement organization.
``(2) Merchant acquiring entity.--The term `merchant acquiring
entity' 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
payment 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 payment 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 Payment Transaction.--For purposes of this
section--
``(1) In general.--The term `reportable payment 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.--Except as provided by
the Secretary in regulations or other guidance, such term shall
not include any person with a foreign address.
``(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 entities 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 by a substantial number of persons who--
``(i) are unrelated to such organization,
``(ii) provide goods or services, and
``(iii) have agreed to settle transactions for the
provision of such goods or services pursuant to such
agreement or arrangement,
``(B) which provides for standards and mechanisms for
settling such transactions, and
``(C) 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 be required
to report any information under subsection (a) with respect to third
party network transactions of any participating payee only if--
``(1) the amount which would otherwise be reported under
subsection (a)(2) with respect to such transactions exceeds
$20,000, and
``(2) the aggregate number of such transactions exceeds 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 the reportable payment transactions
with respect 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. Such statement may be furnished electronically,
and if so, the email address of the person required to make such return
may be shown in lieu of the phone number.
``(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.--
(A) In general.--The amendment made by subsection (c) shall
apply to amounts paid after December 31, 2011.
(B) Eligibility for tin matching program.--Solely for
purposes of carrying out any TIN matching program established
by the Secretary under section 3406(i) of the Internal Revenue
Code of 1986--
(i) the amendments made this section shall be treated
as taking effect on the date of the enactment of this Act,
and
(ii) each person responsible for setting the standards
and mechanisms referred to in section 6050W(d)(2)(C) of
such Code, as added by this section, for settling
transactions involving payment cards shall be treated in
the same manner as a payment settlement entity.
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. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.
(a) In General.--Paragraphs (5)(D) and (6) of section 864(f) are
each amended by striking ``December 31, 2008'' and inserting ``December
31, 2010''.
(b) Transitional Rule.--Subsection (f) of section 864 is amended by
adding at the end the following new paragraph:
``(7) Transition.--In the case of the first taxable year to
which this subsection applies, the increase (if any) in the amount
of the interest expense allocable to sources within the United
States by reason of the application of this subsection shall be 30
percent of the amount of such increase determined without regard to
this paragraph.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
SEC. 3094. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
(a) Repeal of Adjustment for 2012.--Subparagraph (B) of section
401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 is
amended by striking the percentage contained therein and inserting
``100 percent''. No other provision of law which would change such
percentage shall have any force and effect.
(b) Modification of Adjustment for 2013.--The percentage under
subparagraph (C) of section 401(1) of the Tax Increase Prevention and
Reconciliation Act of 2005 in effect on the date of the enactment of
this Act is increased by 16.75 percentage points.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.