Short title

This Act may be cited as the

Protecting Access to Safe Mortgages Act

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.

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.

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.

Sunset provision

This Act is repealed, effective 1 year after the date of enactment of this Act.