[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3777 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3777

 To temporarily raise the portfolio caps applicable to Freddie Mac and 
Fannie Mae, to provide the necessary financing to curb foreclosures by 
 facilitating the refinancing of at-risk subprime borrowers into safe, 
prime loans, to preserve liquidity in the mortgage lending markets, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 9, 2007

  Ms. Bean (for herself and Mr. Neugebauer) introduced the following 
    bill; which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To temporarily raise the portfolio caps applicable to Freddie Mac and 
Fannie Mae, to provide the necessary financing to curb foreclosures by 
 facilitating the refinancing of at-risk subprime borrowers into safe, 
prime loans, to preserve liquidity in the mortgage lending markets, 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.

    This Act may be cited as the ``Protecting Access to Safe Mortgages 
Act''.

SEC. 2. FINDINGS.

    The Congress finds that--
            (1) American families will be severely harmed by an 
        unprecedented wave of potential foreclosures expected to occur 
        in the next 12 months, as adjustable rate subprime mortgages 
        reset to higher interest rates;
            (2) preventing such foreclosures and facilitating the 
        refinancing of at-risk subprime borrowers into safe prime loans 
        will require additional capacity on the part of the government 
        sponsored enterprises, the Federal National Mortgage 
        Association, and the Federal Home Loan Mortgage Association, 
        and any affiliates thereof, to purchase additional financing;
            (3) there is a lack of liquidity in the financial markets 
        for mortgage backed securities, which threatens to impair 
        financing for all mortgages; and
            (4) the government sponsored enterprises, the Federal 
        National Mortgage Association, and the Federal Home Loan 
        Mortgage Corporation, and any affiliates thereof, are uniquely 
        positioned to provide the financing necessary to alleviate the 
        predicted wave of upcoming foreclosures, and the liquidity 
        necessary to help United States markets.

SEC. 3. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Director.--The term ``Director'' means the Director of 
        the Office of Federal Housing Enterprise Oversight of the 
        Department of Housing and Urban Development.
            (2) Enterprise.--The term ``enterprise'' means--
                    (A) the Federal National Mortgage Association, and 
                any affiliate thereof; and
                    (B) the Federal Home Loan Mortgage Corporation, and 
                any affiliate thereof.
            (3) Fannie mae consent order.--The term ``Fannie Mae 
        Consent Order'' means the order of the Office of Federal 
        Housing Enterprises Oversight dated May 23, 2006, in the matter 
        of the Federal National Mortgage Association.
            (4) Freddie mac letter.--The term ``Freddie Mac Letter'' 
        means the letter dated July 31, 2006, from the Chairman and 
        Chief Executive Officer of the Federal Home Loan Mortgage 
        Corporation to the Director.
            (5) OFHEO.--The term ``OFHEO'' means the Office of Federal 
        Housing Enterprises Oversight.

SEC. 4. LIFTING OF PORTFOLIO CAPS.

    (a) In General.--Immediately upon the date of enactment of this 
Act, the Director shall terminate, suspend, modify, or otherwise lift--
            (1) the limitation on growth provision set forth in section 
        4, Article III of the Fannie Mae Consent Order, as interpreted 
        and modified by OFHEO on September 19, 2007; and
            (2) the voluntary temporary growth limitation described in 
        the Freddie Mac Letter, as interpreted and modified by OFHEO on 
        September 19, 2007.
    (b) Factors.--In carrying out subsection (a), the Director shall 
increase the mortgage portfolio limitations of both enterprises by not 
less than 10 percent, unless the Director certifies in writing to the 
Committee on Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Representatives, and 
demonstrates by compelling evidence that such action is likely to 
result in a significant depletion of the core capital of an enterprise, 
or otherwise create an unsafe and unsound condition.
    (c) Rule of Construction.--Nothing in this section shall be 
construed to prevent or prohibit the Director from exercising any 
authority of the Director to terminate, suspend, modify, or otherwise 
lift the limitations referred to in paragraphs (1) and (2) of 
subsection (a) beyond the minimum increase specified in subsection (b), 
as the Director deems appropriate.

SEC. 5. SUNSET PROVISION.

    This Act is repealed, effective 1 year after the date of enactment 
of this Act.
                                 <all>