[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2169 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 2169

 To temporarily increase 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, affordable loans, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 16, 2007

  Mr. Schumer introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To temporarily increase 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, affordable loans, 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 ``Promoting Refinancing Opportunities 
for Mortgages Impacted by the Subprime Emergency Act of 2007'' or the 
``PROMISE Act''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) American families will be severely harmed by an 
        unprecedented wave of anticipated foreclosures expected to 
        occur over the coming 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, affordable 
        loans will require the additional liquidity provided by the 
        Federal National Mortgage Association and the Federal Home Loan 
        Mortgage Association, and any affiliates thereof;
            (3) the failure to prevent these anticipated foreclosures 
        could have devastating effects on household wealth, 
        neighborhood property values, and the overall health of the 
        broader economy; and
            (4) the Federal National Mortgage Association and the 
        Federal Home Loan Mortgage Corporation, and any affiliates 
        thereof, are currently constrained from purchasing large 
        volumes of subprime refinancings by portfolio limitations, as 
        set forth by the Office of Federal Housing Enterprise 
        Oversight.

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 decree.--The term ``Fannie Mae 
        Consent Decree'' 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 Decree; and
            (2) the voluntary temporary growth limitation described in 
        the Freddie Mac Letter.
    (b) Factors.--In carrying out subsection (a), the Director shall 
increase the mortgage portfolio limitations of both enterprises by not 
less than 10 percent.
    (c) Allocation.--
            (1) In general.--Eighty-five percent of the portfolio 
        increase described in subsection (b) shall be used for the 
        purpose of refinancing subprime mortgages at risk of 
        foreclosure.
            (2) Definitions.--The Director may establish criteria 
        defining the term ``subprime mortgage'', as the Director 
        determines necessary.
    (d) 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 referenced 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 6 months after the date of 
enactment of this Act, and the authority of the Director under this Act 
is terminated on that date of repeal.
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