[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5830 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 5830

 To create a voluntary FHA program that provides mortgage refinancing 
     assistance to allow families to stay in their homes, protect 
         neighborhoods, and help stabilize the housing market.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 17, 2008

 Mr. Frank of Massachusetts (for himself, Ms. Waters, Mrs. Maloney of 
New York, Mr. Watt, Mr. Ackerman, Mr. Meeks of New York, Mr. Clay, Mr. 
Lynch, Mr. Al Green of Texas, Ms. Moore of Wisconsin, Mr. Lincoln Davis 
of Tennessee, Mr. Hodes, Mr. Wilson of Ohio, Mr. Perlmutter, Mr. Murphy 
 of Connecticut, Mr. Donnelly, Mr. Wexler, Mr. Shays, Ms. Ginny Brown-
Waite of Florida, Mr. Dingell, Ms. Schakowsky, Mr. Levin, Mr. Hinchey, 
Mr. Fattah, Mr. Jackson of Illinois, Mrs. Christensen, Ms. Lee, Mr. Wu, 
    Ms. McCollum of Minnesota, Mr. Van Hollen, Mr. Butterfield, Mr. 
   Courtney, Mr. Sestak, Mr. Sires, and Ms. Tsongas) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
 To create a voluntary FHA program that provides mortgage refinancing 
     assistance to allow families to stay in their homes, protect 
         neighborhoods, and help stabilize the housing market.

    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 ``FHA Housing Stabilization and 
Homeownership Retention Act of 2008''.

SEC. 2. PURPOSES.

    The purposes of this Act are--
            (1) to create an FHA program, which is voluntary on the 
        part of borrowers and existing mortgage loan holders, to insure 
        refinance loans for substantial numbers of borrowers at risk of 
        foreclosure, at levels which are reasonably likely to be 
        sustainable through enhanced affordability of debt service;
            (2) to provide flexible underwriting for FHA-insured loans 
        under such a program to provide refinancing opportunities under 
        fiscally responsible terms, including higher fees commensurate 
        with higher risk levels, a seasoning requirement for higher 
        debt to income loans, and additional program controls to limit 
        and control risk;
            (3) to bar speculators and second home owners from 
        participation in such program;
            (4) to require existing mortgage loan holders to take 
        substantial loan writedowns in exchange for having the Federal 
        Government and the borrower assume the ongoing risk of the 
        refinanced loan;
            (5) to set a loan-to-value limit on such loans that 
        provides the FHA with an equity buffer against potential loan 
        losses, provides protections against the risk of future home 
        price declines, and creates incentives for borrowers to 
        maintain payments on the loan;
            (6) to protect the FHA against losses which may exceed 
        normal FHA loss levels by establishing higher fee levels, 
        including an exit fee and profit sharing during the first five 
        years of the loan, with such higher fee levels effectively 
        being funded through the required lender writedown;
            (7) to provide a fair level of incentives for junior lien 
        holders to provide the necessary releases of their lien 
        interests, in order to meet program requirements that all 
        outstanding liens must be extinguished, and thereby permit the 
        refinancing to be completed;
            (8) to enhance the administrative capacity of the FHA to 
        carry out its expanded role under the program through 
        establishment of an Oversight Board which adds expertise from 
        the Federal Reserve and the Department of the Treasury, through 
        additional funding to contract out for the provision of any 
        needed expertise in designing program requirements and 
        oversight, and through additional funding to increase FHA 
        personnel resources as needed to handle the increased loan 
        volume resulting from the program;
            (9) to sunset the program when it is no longer needed; and
            (10) to study the need for and efficacy of an auction or 
        bulk refinancing mechanism to facilitate more expeditious 
        refinancing of larger volumes of existing mortgages that are at 
        risk for foreclosure into FHA-insured mortgages.

SEC. 3. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

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

``SEC. 257. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

    ``(a) Oversight Board.--
            ``(1) Establishment.--There is hereby established the 
        Refinance Program Oversight Board (in this section referred to 
        as the `Oversight Board').
            ``(2) Membership.--The Oversight Board shall consist of the 
        following members or their designees:
                    ``(A) The Secretary of the Treasury.
                    ``(B) The Secretary of Housing and Urban 
                Development.
                    ``(C) The Chairman of the Board of Governors of the 
                Federal Reserve System.
            ``(3) No additional compensation.--Members of the Oversight 
        Board shall receive no additional pay by reason of service on 
        the Oversight Board.
            ``(4) Responsibilities.--The Oversight Board shall be 
        responsible for establishing program and oversight requirements 
        for the program under this section, which shall include--
                    ``(A) detailed program requirements under 
                subsection (c);
                    ``(B) flexible underwriting criteria under 
                subsection (d);
                    ``(C) a mortgage premium structure under subsection 
                (e);
                    ``(D) a reasonable fee and rate limitation under 
                subsection (f);
                    ``(E) enhancement of FHA capacity under subsection 
                (h), including oversight of such activities and 
                personnel as may be contracted for as provided therein;
                    ``(F) monitoring of underwriting risk under 
                subsection (i); and
                    ``(G) such additional requirements as may be 
                necessary and appropriate to oversee and implement the 
                program.
            ``(5) Use of resources.--In carrying out its functions 
        under this section, the Oversight Board may utilize, with their 
        consent and to the extent practical, the personnel, services, 
        and facilities of the Department of the Treasury, the 
        Department of Housing and Urban Development, the Board of 
        Governors of the Federal Reserve System, the Federal Reserve 
        Banks, and other Federal agencies, with or without 
        reimbursement therefore.
    ``(b) Authority.--
            ``(1) In general.--The Secretary shall, subject only to the 
        absence of qualified requests for insurance under this section 
        and to the limitations under subsection (g) of this section and 
        section 531(a), make commitments to insure and insure any 
        mortgage covering a 1- to 4-family residence that is made for 
        the purpose of paying or prepaying outstanding obligations 
        under an existing mortgage or mortgages on the residence if the 
        mortgage being insured under this section meets the 
        requirements of this section, as established by the Oversight 
        Board, and of section 203, except as modified by this section.
            ``(2) Establishment and implementation of program 
        requirements.--The Oversight Board shall establish program 
        requirements and standards under this section and the Secretary 
        shall implement such requirements and standards. The Oversight 
        Board and the Secretary may establish and implement any 
        requirements or standards through interim guidance and 
        mortgagee letters.
    ``(c) Requirements.--To be eligible for insurance under this 
section, a mortgage shall comply with all of the following 
requirements:
            ``(1) Owner-occupied principal residence requirement.--The 
        residence to be covered by the mortgage insured under this 
        section shall be occupied by the mortgagor as the principal 
        residence of the mortgagor.
            ``(2) Lack of capacity to pay existing mortgage or 
        mortgages.--
                    ``(A) Borrower certification.--The mortgagor shall 
                provide a certification to the originator of the 
                mortgage that the mortgagor has not intentionally 
                defaulted on the existing mortgage or mortgages.
                    ``(B) Current borrower debt-to-income ratio.--As of 
                March 1, 2008, the mortgagor shall have had a ratio of 
                mortgage debt to income, taking into consideration all 
                existing mortgages at such time, greater than 35 
                percent, except that the Oversight Board may decrease 
                such percentage for all mortgagors or identifiable 
                classes of mortgagors if the Oversight Board considers 
                such decrease necessary or appropriate to make eligible 
                for the program those mortgagors who cannot reasonably 
                afford their existing mortgage loan or loans but who 
                would be able to afford the new mortgage under the 
                program under this section.
                    ``(C) Loss mitigation responsibilities.--This 
                section may not be construed to alter or in any way 
                affect the responsibilities of any party (including the 
                mortgage servicer) to engage in any or all loan 
                modification or other loss mitigation strategies to 
                maximize value to investors as established by any 
                applicable contract.
            ``(3) Eligibility of mortgages by date of origination.--The 
        existing senior mortgage shall have been originated on or 
        before December 31, 2007.
            ``(4) Maximum loan-to-value ratio for new loans.--The 
        mortgage being insured under this section shall involve a 
        principal obligation (including such initial service charges, 
        appraisal, inspection, and other fees as the Secretary shall 
        approve and including the mortgage insurance premium paid 
        pursuant to subsection (e)(1)) in an amount not to exceed 90 
        percent of the current appraised value of the property. Section 
        203(d) shall not apply to mortgages insured under this section.
            ``(5) Required waiver of prepayment penalties and fees.--
        All penalties for prepayment of the existing mortgage or 
        mortgages, and all fees and penalties related to default or 
        delinquency on all existing mortgages or mortgages, shall be 
        waived or forgiven.
            ``(6) Required loan reduction.--
                    ``(A) Reduction of indebtedness under existing 
                senior mortgage.--The amount of indebtedness on the 
                existing mortgage or mortgages on the residence shall 
                have been substantially reduced by such percentage as 
                the Oversight Board or Secretary may require, and such 
                reduction shall be at least sufficient to--
                            ``(i) provide for the refinancing of such 
                        existing mortgage or mortgages in an amount not 
                        greater than 90 percent of the current 
                        appraised value of the property involved;
                            ``(ii) pay the full amount of the single 
                        premium to be collected pursuant to subsection 
                        (e)(1) (which shall be an amount equal to 3.0 
                        percent of the amount of the original insured 
                        principal obligation of the mortgage insured 
                        under this section and which shall serve as an 
                        additional reserve to cover possible loan 
                        losses); and
                            ``(iii) pay the full amount of the loan 
                        origination fee and any other closing costs, 
                        not to exceed 2.0 percent of the amount of the 
                        original insured principal obligation of the 
                        mortgage insured under this section.
                    ``(B) Extinguishment of debt by refinancing.--
                            ``(i) Required agreement.--All existing 
                        holders of mortgage liens on the property 
                        involved shall agree to accept the proceeds of 
                        the insured loan as payment in full of all 
                        indebtedness under all existing mortgages, and 
                        all encumbrances related to such mortgages 
                        shall be removed. The Oversight Board may take 
                        such actions as the Oversight Board considers 
                        necessary or appropriate to facilitate 
                        coordination and agreement between the holders 
                        of the existing senior mortgage and any 
                        existing subordinate mortgages, taking into 
                        consideration the subordinate lien status of 
                        such subordinate mortgages, to comply with the 
                        requirement under this subparagraph.
                            ``(ii) Treatment of multiple mortgage 
                        liens.--In addition to clause (i), the 
                        Oversight Board shall adopt one of the 
                        following approaches for all mortgages or such 
                        classes of mortgages as the Oversight Board may 
                        determine and may, from time to time, 
                        reconsider:
                                    ``(I) Fixed price.--As a 
                                requirement for participating in this 
                                program, all existing lien holders will 
                                agree to not provide any payment to 
                                subordinate lien holders other than 
                                such payment in accordance with a 
                                formula established by the Oversight 
                                Board as set forth in clause (iii); 
                                except that the Oversight Board may 
                                establish a short period within which 
                                first and subordinate lien holders may 
                                negotiate to extinguish all subordinate 
                                liens for compensation that may be 
                                different from the amount determined 
                                under such formula set forth in clause 
                                (iii).
                                    ``(II) Shared equity.--The 
                                Oversight Board may require the 
                                mortgagor under a mortgage insured 
                                under this section to agree to share a 
                                portion of any future equity in the 
                                mortgaged property with holders of 
                                existing subordinate mortgages, in 
                                accordance with a formula for such 
                                shared equity established by the 
                                Oversight Board as set forth in clause 
                                (iii), except that payments of such 
                                shared equity may be made only after 
                                the Secretary recovers all amounts owed 
                                to the Secretary with respect to such 
                                mortgage pursuant to the program under 
                                this section (including amounts owed 
                                pursuant to paragraph (8)).
                            ``(iii) Formula.--In determining a formula 
                        for determining any payments to subordinate 
                        lien holders pursuant to subclauses (I) and 
                        (II) of clause (ii), and in any reconsideration 
                        of such formula as the Oversight Board may from 
                        time to time undertake, the Oversight Board 
                        shall take into consideration the current 
                        market value of such liens. In no case may a 
                        formula provide for the payment of more than 1 
                        percent of the current appraised value of the 
                        mortgaged property to a subordinate lien holder 
                        if the outstanding balance owed to more senior 
                        lien holders is equal to or exceeds such 
                        current appraised value.
                            ``(iv) Voluntary program.--This 
                        subparagraph may not be construed to require 
                        any holder of any existing mortgage to 
                        participate in the program under this section 
                        generally, or with respect to any particular 
                        loan.
                            ``(v) Source of payments for subordinate 
                        loans.--Any amounts paid to holders of any 
                        existing subordinate mortgages in connection 
                        with the origination and insurance of a 
                        mortgage under this section shall derive only 
                        from--
                                    ``(I) the holder of the existing 
                                senior mortgage; or
                                    ``(II) in the case only of the 
                                shared equity approach under clause 
                                (ii)(II), the mortgagor under the 
                                mortgage insured under this section
            ``(7) Required reduction of debt service.--The debt service 
        payments due under the mortgage insured under this section 
        shall be in an amount that is substantially reduced from the 
        debt service payments due under the existing mortgage or 
        mortgages, which reduction may be achieved through a reduction 
        of indebtedness, a reduction in the interest rate being paid, 
        or an extension of the term of the mortgage, or any combination 
        thereof.
            ``(8) Financial recovery to federal government through exit 
        premium.--
                    ``(A) Subordinate lien.--The mortgage shall provide 
                that the Secretary shall retain a lien on the residence 
                involved, which shall be subordinate to the mortgage 
                insured under this section but senior to all other 
                mortgages on the residence that may exist at any time, 
                and which shall secure the repayment of the amount due 
                under subparagraph (D).
                    ``(B) No interest or payment during mortgage.--The 
                amount secured by the lien retained by the Secretary 
                pursuant to subparagraph (A) shall not bear interest 
                and shall not be repayable to the Secretary except as 
                provided in subparagraph (D) of this paragraph.
                    ``(C) Net proceeds available for exit premium.--
                Upon the sale, refinancing, or other disposition of the 
                residence covered by a mortgage insured under this 
                section, any proceeds resulting from such disposition 
                that remain after deducting the remaining insured 
                principal balance of the mortgage insured under this 
                section shall be available to meet the obligation under 
                subparagraph (D).
                    ``(D) Exit premium.--Upon any refinancing of the 
                mortgage insured under this section or any sale or 
                disposition of the residence covered by the mortgage, 
                the Secretary shall, subject to the availability of 
                sufficient net proceeds described in subparagraph (C), 
                receive the greater of--
                            ``(i) 3 percent of the amount of the 
                        original insured principal obligation of the 
                        mortgage; or
                            ``(ii) a percentage of the portion of the 
                        net proceeds described in subparagraph (C), 
                        which shall be--
                                    ``(I) in the case of any 
                                refinancing, sale, or disposition 
                                occurring during the first year of the 
                                term of the mortgage, 100 percent of 
                                such net proceeds;
                                    ``(II) in the case of any 
                                refinancing, sale, or disposition 
                                occurring during the second year of the 
                                term of the mortgage, 80 percent;
                                    ``(III) in the case of any 
                                refinancing, sale, or disposition 
                                occurring during the third year of the 
                                term of the mortgage, 60 percent;
                                    ``(IV) in the case of any 
                                refinancing, sale, or disposition 
                                occurring during the fourth year of the 
                                term of the mortgage, 40 percent;
                                    ``(V) in the case of any 
                                refinancing, sale, or disposition 
                                occurring during the fifth year of the 
                                term of the mortgage, 20 percent; and
                                    ``(VI) in the case of any 
                                refinancing, sale, or disposition 
                                occurring after the end of the fifth 
                                year, 0 percent.
                    ``(E) Authority to prohibit new second liens.--The 
                Oversight Board may prohibit borrowers from granting a 
                new second lien on the mortgaged property during the 
                first five years of the term of the mortgage insured 
                under this section, except as the Oversight Board 
                determines to be necessary to ensure the appropriate 
                maintenance of the mortgaged property.
            ``(9) Documentation and verification of income.--In 
        complying with the FHA underwriting requirements under the 
        program under this section, the mortgagee under the mortgage 
        shall document and verify the income of the mortgagor in 
        accordance with procedures and standards that the Oversight 
        Board or the Secretary shall establish.
            ``(10) Fixed rate mortgage.--The mortgage insured under 
        this section shall bear interest at a single rate that is fixed 
        for the entire term of the mortgage.
            ``(11) Maximum loan amount.--Notwithstanding section 
        203(b)(2), the mortgage being insured under this section shall 
        involve a principal obligation in an amount that does not 
        exceed the limitation (for a property of the applicable size) 
        on the amount of the principal obligation that would be 
        allowable under the terms of section 202(a) of the Economic 
        Stimulus Act of 2008 if the mortgage were insured pursuant to 
        such section. The limitation on the amount of the principal 
        obligation allowable under such Act shall apply for the 
        purposes of this Act until the termination under subsection (m) 
        of the program under this subsection.
    ``(d) Flexible Underwriting Criteria.--The Oversight Board shall 
establish, and the Secretary acting on behalf of the Oversight Board 
shall implement, underwriting standards for mortgages insured under 
this section that--
            ``(1) ensure that each mortgagor under a mortgage insured 
        under this section has a reasonable expectation of repaying the 
        mortgage, taking into consideration the mortgagor's income, 
        assets, liabilities, payment history, and other applicable 
        criteria, but which shall not result in a denial of insurance 
        solely on the basis of the mortgagor's current FICO or other 
        credit scores, or any delinquency or default by the mortgagor 
        under the existing mortgage or mortgages;
            ``(2) subject to the provisions of paragraph (1) and except 
        as provided in paragraph (3), permit a total debt-to-income 
        ratio of up to 43 percent;
            ``(3) subject to the provisions of paragraph (1), permit a 
        total debt-to-income ratio of more than 43 percent, but not 
        more than 50 percent, if the mortgagor has made, on a timely 
        basis before the endorsement of the mortgage insured under this 
        section, not less than six months of payments in an amount not 
        less than the amount of the monthly payment due under the 
        mortgage to be insured under this section; except that the 
        Oversight Board may increase the maximum percentage under this 
        paragraph for a class of borrowers, who will be subject to such 
        additional requirements as the Oversight Board shall establish, 
        to not more than 55 percent upon making a finding that such 
        increase is necessary to achieve the purposes of this section 
        and can be accomplished under reasonable underwriting 
        standards; and the holder of the existing senior mortgage shall 
        exercise forbearance with respect to such mortgage during the 
        period in which such payments are made; and
            ``(4) provide for the underwriter of the insured loan to 
        provide such representations and warranties as the Oversight 
        Board considers necessary or appropriate for the Secretary to 
        enforce compliance with all underwriting and appraisal 
        standards of the program.
    ``(e) Premiums.--For each mortgage insured under this section, the 
Oversight Board shall establish and the Secretary shall collect--
            ``(1) at the time of insurance, a single premium payment in 
        an amount equal to 3.0 percent of the amount of the original 
        insured principal obligation of the mortgage, which shall be 
        paid from the proceeds of the mortgage being insured under this 
        section, through the reduction of the amount of indebtedness on 
        the existing senior mortgage required under subsection 
        (c)(6)(A);
            ``(2) in addition to the premium under paragraph (1), 
        annual premium payments in an amount equal to 1.50 percent of 
        the remaining insured principal balance of the mortgage; and
            ``(3) an exit premium in the amount determined under 
        subsection (c)(8), but which shall not be less than 3.0 percent 
        of the original insured principal obligation of the mortgage, 
        subject only to the availability of sufficient net proceeds 
        from sale, refinancing, or other disposition of the property, 
        as determined in subsection (c)(8).
    ``(f) Origination Fees and Mortgage Rate.--The Oversight Board 
shall establish and the Secretary shall implement a reasonable 
limitation on origination fees for mortgages insured under this section 
and shall establish procedures to ensure that interest rates on such 
mortgages shall be commensurate with market rate interest rates on such 
types of loans.
    ``(g) Limitation on Aggregate Insurance Authority.--The aggregate 
original principal obligation of all mortgages insured under this 
section may not exceed $300,000,000,000.
    ``(h) Enhancement of FHA Capacity.--Under the direction of the 
Oversight Board, the Secretary shall take such actions as may be 
necessary to--
            ``(1) contract for the establishment of underwriting 
        criteria, automated underwriting systems, pricing standards, 
        and other factors relating to eligibility for mortgages insured 
        under this section;
            ``(2) contract for independent quality reviews of 
        underwriting, including appraisal reviews and fraud detection, 
        of mortgages insured under this section or pools of such 
        mortgages; and
            ``(3) increase personnel of the Department as necessary to 
        process or monitor the processing of mortgages insured under 
        this section.
    ``(i) Monitoring of Underwriting Risk.--
            ``(1) Monitoring of designated underwriters.--The Oversight 
        Board and the Secretary shall monitor independent quality 
        reviews as established pursuant to subsection (h)(2) to--
                    ``(A) determine compliance of designated 
                underwriters with underwriting standards;
                    ``(B) determine rates of delinquency, claims rates, 
                and loss rates of designated underwriters; and
                    ``(C) terminate eligibility of designated 
                underwriters that do not meet minimum performance 
                standards as the Oversight Board may establish and the 
                Secretary implements.
            ``(2) Reports by oversight board.--The Oversight Board 
        shall submit monthly reports to the Congress identifying the 
        progress of the program for mortgage insurance under this 
        section, which shall contain the following information for each 
        month:
                    ``(A) The number of new mortgages insured under 
                this section, including the location of the properties 
                subject to such mortgages by census tract.
                    ``(B) The aggregate principal obligation of new 
                mortgages insured under this section.
                    ``(C) The average amount by which the indebtedness 
                on existing mortgages is reduced in accordance with 
                subsection (c)(6).
                    ``(D) The average amount by which the debt service 
                payments on existing mortgages is reduced in accordance 
                with subsection (c)(7).
                    ``(E) The amount of premiums collected for 
                insurance of mortgages under this section.
                    ``(F) The claim and loss rates for mortgages 
                insured under this section.
                    ``(G) The race, ethnicity, gender, and income of 
                the mortgagors, aggregated by geographical areas at 
                least as specific as census tracts, except where 
                necessary to protect privacy of the borrower.
                    ``(H) Any other information that the Oversight 
                Board considers appropriate.
            ``(3) Report by inspector general.--The Inspector General 
        of the Department of Housing and Urban Development shall 
        conduct an annual audit of the program for mortgage insurance 
        under this section to determine compliance with this section 
        and program rules.
    ``(j) 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.
    ``(k) Special Risk Insurance Fund.--The insurance of each mortgage 
under this section shall be the obligation of the Special Risk 
Insurance Fund established by section 238.
    ``(l) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Existing mortgage.--The term `existing mortgage' 
        means, with respect to a mortgage insured under this section, a 
        mortgage that is to be extinguished, and paid or prepaid, from 
        the proceeds of the mortgage insured under this section.
            ``(2) Existing senior mortgage.--The term `existing senior 
        mortgage' means, with respect to a mortgage insured under this 
        section, the existing mortgage that has superior priority.
            ``(3) Existing subordinate mortgage.--The term `existing 
        subordinate mortgage' means, with respect to a mortgage insured 
        under this section, an existing mortgage that has subordinate 
        priority to the existing senior mortgage.
    ``(m) Sunset.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        authority of the Secretary to make any new commitment to insure 
        any mortgage under this section shall terminate upon the 
        expiration of the 2-year period beginning on the date of the 
        enactment of the FHA Housing Stabilization and Homeownership 
        Retention Act of 2008.
            ``(2) Extensions.--The Oversight Board may, not more than 
        four times, extend the authority to enter into new commitments 
        to insure mortgages under this section beyond the date 
        specified in paragraph (1), except that each such extension 
        shall--
                    ``(A) be effective only if, before the program 
                terminates pursuant to paragraph (1) or any previous 
                extension pursuant to this paragraph, the Oversight 
                Board--
                            ``(i) certifies the need for such extension 
                        in writing to the Congress; and
                            ``(ii) causes notice of such extension to 
                        be published in the Federal Register no later 
                        than the beginning of the 3-month period that 
                        ends upon the scheduled termination date of the 
                        program; and
                    ``(B) be for a period of not more than 6 months.
    ``(n) Authorizations of Appropriations.--There is authorized to be 
appropriated for each of fiscal years 2008 and 2009--
            ``(1) $200,000,000 for providing counseling regarding loss 
        mitigation for mortgagors with 1- to 4-family residences, 
        including determining eligibility for the program under this 
        section, with grants to be administered through the 
        Neighborhood Reinvestment Corporation, except that--
                    ``(A) not less than 15 percent of the funds made 
                available pursuant to this paragraph shall be provided 
                to counseling organizations that target counseling 
                services regarding loss mitigation to minority and low-
                income homeowners or provide such services in 
                neighborhoods with high concentrations of minority and 
                low-income homeowners; and
                    ``(B) $30,000,000 of the funds made available 
                pursuant to this paragraph shall be used by the 
                Neighborhood Reinvestment Corporation (referred to in 
                this subparagraph as the `NRC') to make grants to 
                counseling intermediaries approved by the Department of 
                Housing and Urban Development or the NRC to hire 
                attorneys to assist homeowners who have legal issues 
                related to home ownership preservation, home 
                foreclosure prevention, tenancy associated with home 
                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; of 
                the amount provided under this subparagraph, the NRC 
                shall give priority consideration to counseling 
                intermediaries and legal organizations that (i) provide 
                legal assistance in the 100 metropolitan statistical 
                areas (as defined by the Director of the Office of 
                Management and Budget) with the highest home 
                foreclosure rates, and (ii) have the capacity to begin 
                using the financial assistance within 90 days after 
                receipt of the assistance; and
            ``(2) $150,000,000 for costs of activities under subsection 
        (h).''.
    (b) Special Risk Insurance Fund.--Section 238 of the National 
Housing Act (12 U.S.C. 1715z-3) is amended--
            (1) in subsection (a)(1), by striking ``or 243'' each place 
        such term appears and inserting ``243, or 257''; and
            (2) in subsection (b), by striking ``and 243'' each place 
        such term appears and inserting ``243, and 257''.

SEC. 4. STUDY OF AUCTION OR BULK REFINANCE PROGRAM.

    (a) Study.--The Board of Governors of the Federal Reserve System 
(in this section referred to as the ``Board of Governors''), in 
consultation with other members of the Oversight Board established by 
section 257(a) of the National Housing Act (as added by the amendment 
made by section 3(a) of this Act), shall conduct a study of the need 
for and efficacy of an auction or bulk refinancing mechanism to 
facilitate refinancing of existing residential mortgages that are at 
risk for foreclosure into mortgages insured under the mortgage 
insurance program under title II of the National Housing Act. The study 
shall identify and examine various options for mechanisms under which 
lenders and servicers of such mortgages may make bids for forward 
commitments for such insurance in an expedited manner.
    (b) Content.--
            (1) Analysis.--The study required under subsection (a) 
        shall analyze--
                    (A) the feasibility of establishing a mechanism 
                that would facilitate the more rapid refinancing of 
                borrowers at risk of foreclosure into performing 
                mortgages insured under title II of the National 
                Housing Act;
                    (B) whether such a mechanism would provide an 
                effective and efficient mechanism to reduce 
                foreclosures on qualified existing mortgages;
                    (C) whether the use of an auction or bulk refinance 
                program is necessary to stabilize the housing market 
                and reduce the impact of turmoil in that market on the 
                economy of the United States;
                    (D) whether there are other mechanisms or authority 
                that would be useful to reduce foreclosure; and
                    (E) and any other factors that the Board of 
                Governors considers relevant.
            (2) Determinations.--To the extent that the Board of 
        Governors finds that a facility of the type described in 
        paragraph (1) is feasible and useful, the study shall--
                    (A) determine and identify any additional authority 
                or resources needed to establish and operate such a 
                mechanism;
                    (B) determine whether there is a need for 
                additional authority with respect to the loan 
                underwriting criteria included in the amendment made by 
                section 3(a) of this Act or with respect to eligibility 
                of participating borrowers, lenders, or holders of 
                liens;
                    (C) determine whether such underwriting criteria 
                should be established on the basis of individual loans, 
                in the aggregate, or otherwise to facilitate the goal 
                of refinancing borrowers at risk of foreclosure into 
                viable loans insured under the National Housing Act.
    (c) Report.--Not later than the expiration of the 60-day period 
beginning on the date of the enactment of this Act, the Board of 
Governors shall submit a report regarding the results of the study 
conducted under this section to the Committee on Financial Services of 
the House of Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate. The report shall include a detailed 
description of the analysis required under subsection (b)(1) and of the 
determinations made pursuant to subsection (b)(2), and shall include 
any other findings and recommendations of the Board of Governors 
pursuant to the study, including identifying various options for 
mechanisms described in subsection (a).
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