1.Short title and table of
contents
(a)This Act may be cited as the Expanding American Homeownership Act of
2007
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Maximum principal loan obligation.
Sec. 4. Extension of mortgage term.
Sec. 5. Cash investment requirement.
Sec. 6. Temporary reinstatement of downpayment requirement in
event of increased defaults.
Sec. 7. Mortgage insurance premiums.
Sec. 8. Rehabilitation loans.
Sec. 9. Discretionary action.
Sec. 10. Insurance of condominiums.
Sec. 11. Mutual Mortgage Insurance Fund.
Sec. 12. Hawaiian home lands and Indian
reservations.
Sec. 13. Conforming and technical amendments.
Sec. 14. Home equity conversion mortgages.
Sec. 15. Conforming loan limit in disaster areas.
Sec. 16. Participation of mortgage brokers and correspondent
lenders.
Sec. 17. Sense of Congress regarding technology for financial
systems.
Sec. 18. Savings provision.
Sec. 19. Implementation.
2.
(a)The
Congress finds that—
(1)one of the primary
missions of the Federal Housing Administration (FHA) single family mortgage
insurance program is to reach borrowers who are underserved, or not served, by
the existing conventional mortgage marketplace;
(2)the FHA program
has a long history of innovation, which includes pioneering the 30-year
self-amortizing mortgage and a safe-to-seniors reverse mortgage product, both
of which were once thought too risky to private lenders;
(3)the FHA single
family mortgage insurance program traditionally has been a major provider of
mortgage insurance for home purchases;
(4)the FHA mortgage
insurance premium structure, as well as FHA’s product offerings, should be
revised to reflect FHA’s enhanced ability to determine risk at the loan level
and to allow FHA to better respond to changes in the mortgage market;
(5)during past
recessions, including the oil-patch downturns in the mid-1980s, FHA remained a
viable credit enhancer and was therefore instrumental in preventing a more
catastrophic collapse in housing markets and a greater loss of homeowner
equity; and
(6)as housing price
appreciation slows and interest rates rise, many homeowners and prospective
homebuyers will need the less-expensive, safer financing alternative that FHA
mortgage insurance provides.
(b)The
purposes of this Act are—
(1)to provide
flexibility to FHA to allow for the insurance of housing loans for low- and
moderate-income homebuyers during all economic cycles in the mortgage
market;
(2)to modernize the
FHA single family mortgage insurance program by making it more reflective of
enhancements to loan-level risk assessments and changes to the mortgage market;
and
(3)to adjust the loan
limits for the single family mortgage insurance program to reflect rising house
prices and the increased costs associated with new construction.
3.Maximum principal
loan obligationParagraph (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 new subparagraphs:
(A)not to exceed the
lesser of—
(i)in
the case of a 1-family residence, 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 in effect under 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 in
effect under such section for a 1-family residence; or
(ii)the dollar amount
limitation determined under such section 305(a)(2) for a residence of the
applicable size;
except
that the dollar amount limitation in effect for any area under this
subparagraph 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 limitation determined under such section
305(a)(2) for a residence of the applicable size; and(B)not to exceed the
appraised value of the property, plus any initial service charges, appraisal,
inspection and other fees in connection with the mortgage as approved by the
Secretary.
;
(2)in the matter
after and below subparagraph (B), by striking the second sentence (relating to
a definition of average closing cost
) and all that follows
through title 38, United States Code
; and
(3)by striking the
last undesignated paragraph (relating to counseling with respect to the
responsibilities and financial management involved in homeownership).
4.Extension of
mortgage termParagraph (3) of
section 203(b) of the National Housing
Act (12
U.S.C. 1709(b)(3)) is amended—
(1)by striking
thirty-five years
and inserting forty years
;
and
(2)by
striking (or thirty years if such mortgage is not approved for insurance
prior to construction)
.
5.Cash investment
requirementParagraph (9) of
section 203(b) of the National Housing
Act (12
U.S.C. 1709(b)(9)) is amended by striking the paragraph
designation and all that follows through Provided
further, That for
and inserting the following:
(9)Be executed by a
mortgagor who shall have paid on account of the property, in cash or its
equivalent, an amount, if any, as the Secretary may determine based on factors
determined by the Secretary and commensurate with the likelihood of default.
For
.
6.Temporary
reinstatement of downpayment requirement in event of increased
defaultsSection 203(b) of the
National Housing Act (12 U.S.C.
1709(b)) is amended by adding at the end the following new paragraph:
(10)Effect of
increased defaults
(A)If, for any calendar year described in subparagraph
(B)(i), the Secretary determines, pursuant such subparagraph, that—
(i)the ratio of the
number of mortgage insurance claims made during such calendar year on mortgages
insured under this section to the total number of mortgages having such
insurance in force during such calendar year exceeds, by 25 percent or more,
such ratio for the 12-month period ending on the effective date of this Act,
or
(ii)the ratio of the
aggregate remaining principal obligation under mortgages insured under this
section for which an insurance claim is made during such calendar year to the
average, for such calendar year, of the aggregate outstanding principal
obligation under mortgages so insured exceeds, by 25 percent or more, such
ratio for the 12-month period ending on such effective date,
during
the 90-day period beginning upon the submission of the report for such calendar
year under subparagraph (B)(ii) containing such determination, the Secretary
may insure a mortgage under this section only pursuant to the requirement under
subparagraph (C), and the Secretary shall, not later than 60 days after
submission of the report containing such determination, submit a report to the
Congress under subparagraph (D) regarding mortgage insurance claims during such
calendar year.(B)5 years of
annual determinations
(i)The Secretary shall, for each of the 5 calendar years
commencing after the date of the enactment of this Act, compare the ratios
referred to in subparagraph (A) and make a determination under such
subparagraph.
(ii)Annual report
on defaultsNot later than 90 days after the conclusion of each
of the calendar years described in clause (i), the Secretary shall submit a
report to the Congress containing the determination of the Secretary under such
clause with respect to such calendar year and setting forth the ratios referred
to in such clause for such calendar year.
(C)Reinstatement of
downpayment requirementThe requirement under this subparagraph
is that paragraph (9) of this subsection shall apply as such paragraph was in
effect on the day before the effective date of the Expanding American
Homeownership Act of 2007.
(D)Reports
regarding increased default rateA report under this
subparagraph, as required under subparagraph (A), shall contain—
(i)an
analysis of mortgage insurance claims, made during the calendar year for which
the report is submitted, on mortgages insured under this section;
(ii)an analysis of
the reasons for the increase during such calendar year in the applicable ratio
or ratios under subparagraph (A), including an analysis of the extent to which
such increase is attributable to the amendments made by the Expanding American
Homeownership Act of 2007;
(iii)the effect of
such increase on the Mutual Mortgage Insurance Fund;
(iv)recommendations
regarding—
(I)whether the
Congress should, to respond to such increase, take legislative action (aa) to
apply paragraph (9) of this subsection as such paragraph was in effect on the
day before the effective date of Expanding American Homeownership Act of 2007,
(bb) to apply paragraph (2)(A)(ii) by substituting 87 percent of the
dollar amount limitation
for the dollar amount
limitation
, or (cc) both; and
(II)whether such
provisions should be temporary or permanent, and, if temporary, the period
during which such provisions should apply; and
(v)recommendations
regarding any other administrative, regulatory, legislative, or other actions
that should be taken to respond to such increase.
(E)Defaults in
disaster areas not counted for 24 monthsIn determining the
number of mortgage insurance claims made and the aggregate remaining principal
obligation under mortgages for which an insurance claim is made for purposes of
subparagraph (A) for any calendar year, the Secretary shall not take into
consideration any claim made during such period on a mortgage on any property
that is located in an area for which a major disaster was declared pursuant to
the Robert T. Stafford Disaster Relief and Emergency Assistance Act if such
claim was made during the 24-month period beginning upon such
declaration.
.
7.Mortgage
insurance premiumsSection
203(c) of the National Housing Act (12
U.S.C. 1709(c)) is amended—
(1)in paragraph (2),
in the matter preceding subparagraph (A), by striking
Notwithstanding
and inserting Except as provided in
paragraph (3) and notwithstanding
; and
(2)by adding at the
end the following new paragraph:
(3)Flexible Risk-Based
Premiums
(A)For any
mortgage insured by the Secretary under this title that is secured by a 1- to
4-family dwelling and for which the loan application is received by the
mortgagee on or after the date of enactment of the
Expanding American Homeownership Act of
2007, the Secretary may establish a mortgage insurance premium
structure involving a single premium payment collected prior to the insurance
of the mortgage or annual payments (which may be collected on a periodic
basis), or both, subject to the limitations in subparagraphs (B) and (C). The
rate of premium for such a mortgage may vary during the mortgage term as long
as the basis for determining the variable rate is established before the
execution of the mortgage. The Secretary may change a premium structure
established under this subparagraph but only to the extent that such change is
not applied to any mortgage already executed.
(B)Maximum up-front premium
amountsFor any mortgage insured under a premium structure
established pursuant to this paragraph, the amount of any single premium
payment authorized by subparagraph (A), if established and collected prior to
the insurance of the mortgage, may not exceed the following amount:
(i)Except as provided in clauses (ii)
and (iii), 3.0 percent of the amount of the original insured principal
obligation of the mortgage.
(ii)If the mortgagor has a credit
score equivalent to a FICO score of 560 or more and has paid on account of the
property, in cash or its equivalent, at least 3 percent of the Secretary’s
estimate of the cost of acquisition (excluding the mortgage insurance premium
paid at the time the mortgage is insured), 2.25 percent of the original insured
principal obligation of the mortgage.
(iii)If the annual premium payment is
equal to the maximum amount allowable under clause (i) of subparagraph (C), 1.5
percent of the amount of the original insured principal obligation of the
mortgage.
(C)Maximum annual premium
amountsFor any mortgage insured under a premium structure
established pursuant to this paragraph, the amount of any annual premium
payment collected may not exceed the following amount:
(i)Except as provided in clauses (ii)
and (iii), 2.0 percent of the remaining insured principal obligation of the
mortgage.
(ii)If the mortgagor is a mortgagor
described in clause (ii) of subparagraph (B), 0.55 percent of the remaining
insured principal obligation of the mortgage.
(iii)If the single premium payment
collected at the time of insurance is equal to maximum amount allowable under
clause (i) of subparagraph (B), 1.0 percent of the remaining insured principal
obligation of the mortgage.
(D)Notwithstanding subparagraph (C), for any mortgage
insured under a premium structure established pursuant to this paragraph and
for which the annual premium payment exceeds the amount set forth in
subparagraph (C)(ii), if during the 5-year period beginning upon the time of
insurance all mortgage insurance premiums for such mortgage have been paid on a
timely basis, upon the expiration of such period the Secretary shall reduce the
amount of the annual premium payments due thereafter under such mortgage to an
amount equal to the amount set forth in subparagraph (C)(ii).
(E)Establishment and alteration of
premium structureA premium structure shall be established or
changed under subparagraph (A) only by providing notice to mortgagees and to
the Congress, at least 30 days before the premium structure is established or
changed.
(F)Considerations for premium
structureWhen establishing a premium structure under
subparagraph (A) or when changing such a premium structure, the Secretary shall
consider the following:
(i)The effect of the proposed premium
structure on the Secretary’s ability to meet the operational goals of the
Mutual Mortgage Insurance Fund as provided in section 202(a).
(ii)Underwriting variables.
(iii)The extent to which new pricing
under the proposed premium structure has potential for acceptance in the
private market.
(iv)The administrative capability of
the Secretary to administer the proposed premium structure.
(v)The effect of the proposed premium
structure on the Secretary’s ability to maintain the availability of mortgage
credit and provide stability to mortgage
markets.
.
8.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
.
9.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).
10.Insurance of
condominiums
(a)Section 234 of the National
Housing Act (12 U.S.C. 1715y) is
amended—
(1)in subsection
(c)—
(A)in the first
sentence—
(i)by
striking and
before (2)
; and
(ii)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
(B)in clause (B) of
the third sentence, by striking thirty-five years
and inserting
forty years
; and
(2)in
subsection (g), by striking , except that
and all that follows
and inserting a period.
(b)Section 201(a) of the National Housing Act (12 U.S.C. 1707(a))
is amended—
(1)in clause (1), by
striking or
and inserting a comma; and
(2)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, a one-family unit in a multifamily project, including a
project in which the dwelling units are attached, semi-detached, or detached,
and an undivided interest in the common areas and facilities which serve the
project
.
11.Mutual Mortgage
Insurance Fund
(a)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)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)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)The Secretary has a responsibility to ensure that
the Mutual Mortgage Insurance Fund remains financially sound.
(4)Annual
independent actuarial studyThe 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.
(5)During each fiscal year, the Secretary shall submit a
report to the Congress for each 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 upon the expiration of the 90-day period
beginning on the date of the enactment of the Expanding American Homeownership
Act of 2007, whichever is later.(6)If, pursuant to the independent actuarial study of the
Fund required under paragraph (5), the Secretary determines that the Fund is
not meeting the operational goals established under paragraph (8) 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
section 203 as necessary to reduce the risk to the Fund, or make appropriate
premium adjustments.
(7)The operational goals for the Fund are—
(A)to charge
borrowers under loans that are obligations of the Fund an appropriate premium
for the risk that such loans pose to the Fund;
(B)to minimize the
default risk to the Fund and to homeowners;
(C)to curtail the
impact of adverse selection on the Fund; and
(D)to meet the
housing needs of the borrowers that the single family mortgage insurance
program under this title is designed to
serve.
.
(b)The National Housing
Act is amended as follows:
(1)Homeownership
voucher program mortgagesIn 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 and inserting Mutual Mortgage Insurance
Fund.
.
(2)Home equity
conversion mortgagesSection 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)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
.
12.Hawaiian home
lands and Indian reservations
(a)Section 247(c) of the National Housing Act (12 U.S.C.
1715z–12) 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)Section 248(f) of the National Housing Act (12 U.S.C.
1715z–13) 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)
.
13.Conforming and
technical amendments
(a)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)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)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
.
14.Home equity
conversion mortgages
(a)Section 255 of the National
Housing Act (12 U.S.C. 1715z–20) is
amended—
(1)in subsection
(g)—
(A)by striking the
first sentence; and
(B)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
;
(2)in
subsection (i)(1)(C), by striking limitations
and inserting
limitation
; and
(3)by adding at the
end the following new subsection:
(n)Authority To
Insure Home Purchase Mortgage
(1)Notwithstanding any other provision in 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 primary purpose of the home equity conversion mortgage is to enable an
elderly mortgagor to purchase a 1- to 4-family dwelling in which the mortgagor
will occupy or occupies one of the units.
(2)Limitation on
principal obligationA 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 residence of the applicable
size.
.
(b)Mortgages for
CooperativesSubsection (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)Study Regarding
Mortgage Insurance PremiumsThe Secretary of Housing and Urban
Development shall conduct a study regarding mortgage insurance premiums charged
under the program under section 255 of the National Housing Act (12 U.S.C.
1715z–20) for insurance of home equity conversion mortgages to
analyze and determine—
(1)the effects of
reducing the amounts of such premiums from the amounts charged as of the date
of the enactment of this Act on—
(A)costs to
mortgagors; and
(B)the financial
soundness of the program; and
(2)the feasibility and
effectiveness of exempting, from all the requirements under the program
regarding payment of mortgage insurance premiums (including both up-front or
annual mortgage insurance premiums under section 203(c)(2) of such Act), any
mortgage insured under the program under which part or all of the amount of
future payments made to the homeowner are used for costs of a long-term care
insurance contract covering the mortgagor or members of the household residing
in the mortgaged property.
Not later
than the expiration of the 12-month period beginning on the date of the
enactment of this Act, the Secretary shall submit a report to the Congress
setting forth the results and conclusions of the study.15.Conforming loan
limit in disaster areasSection 203(h) of the
National Housing Act (12 U.S.C. 1709) is
amended—
(1)by inserting after
property
the following: plus any initial service charges,
appraisal, inspection and other fees in connection with the mortgage as
approved by the Secretary,
;
(2)by striking the
second sentence (as added by chapter 7 of the Emergency Supplemental
Appropriations Act of 1994 (Public Law
103–211; 108 Stat. 12)); and
(3)by adding at the
end the following new sentence: In any case in which the single family
residence to be insured under this subsection is within a jurisdiction in which
the President has declared a major disaster to have occurred, the Secretary is
authorized, for a temporary period not to exceed 36 months from the date of
such Presidential declaration, to enter into agreements to insure a mortgage
which involves a principal obligation of up to 100 percent of the dollar
limitation determined under section 305(a)(2) of the
Federal Home Loan Mortgage Corporation
Act for a single family residence, and not in excess of 100 percent
of the appraised value of the property plus any initial service charges,
appraisal, inspection and other fees in connection with the mortgage as
approved by the Secretary.
.
16.Participation of
mortgage brokers and correspondent lenders
(a)
(1)Section 201 of the National
Housing Act (12 U.S.C. 1707) is amended—
(A)by striking
As used in section 203 of this title—
and inserting As
used in this title and for purposes of participation in insurance programs
under this title, except as specifically provided otherwise, the following
definitions shall apply:
;
(B)by striking
subsection (b) and inserting the following:
(2)The term
mortgagee means any of the following entities, and its successors
and assigns, to the extent such entity is approved by the Secretary:
(A)A lender or
correspondent lender, who—
(i)makes, underwrites,
and services mortgages;
(ii)submits to the
Secretary such financial audits performed in accordance with the standards for
financial audits of the Government Auditing Standards issued by the Comptroller
of the United States;
(iii)meet the minimum
net worth requirement that the Secretary shall establish; and
(iv)complies with
such other requirements as the Secretary may establish.
(B)A correspondent
lender who—
(i)closes a mortgage
in its name but does not underwrite or service the mortgage;
(ii)posts a surety
bond, in lieu of any requirement to provide audited financial statements or
meet a minimum net worth requirement, in—
(I)a form satisfactory
to the Secretary; and
(II)an amount of
$75,000, as such amount is adjusted annually by the Secretary (as determined
under regulations of the Secretary) by the change for such year in the Consumer
Price Index for All Urban Consumers published monthly by the Bureau of Labor
Statistics of the Department of Labor; and
(iii)complies with
such other requirements as the Secretary may establish.
(C)A mortgage broker
who—
(i)closes the
mortgage in the name of the lender and does not make, underwrite, or service
the mortgage;
(ii)is licensed,
under the laws of the State in which the property that is subject to the
mortgage is located, to act as a mortgage broker in such State;
(iii)posts a surety
bond in accordance with the requirements of subparagraph (B)(ii); and
(iv)complies with
such other requirements as the Secretary may establish.
(3)The term
mortgagor includes the original borrower under a mortgage and the
successors and assigns of the original
borrower.
;
(C)in subsection (a),
by redesignating clauses (1) and (2) as clauses (A) and (B) respectively;
and
(D)by redesignating
subsections (a), (c), (d), (e), and (f) as paragraphs (1), (4), (5), (6), and
(7), respectively, and realigning such paragraphs two ems from the left
margin.
(2)Section 202(c)(7) of the National Housing Act (12 U.S.C.
1708(c)(7)) is amended—
(A)in subparagraph
(A), by inserting , as defined in section 201,
after
mortgagee
;
(B)by striking
subparagraph (B); and
(C)by redesignating
subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively.
(3)Multifamily
rental housing insuranceSection 207(a)(2) of the
National Housing Act (12 U.S.C.
1713(a)(2)) is amended by striking means the original lender under a
mortgage, and its successors and assigns, and
and inserting has
the meaning given such term in section 201, except that such term
also
.
(4)Section 601(b) of the National Housing Act (12 U.S.C. 1736(b))
is amended by striking includes the original lender under a mortgage,
and his successors and assigns approved by the Secretary
and inserting
has the meaning given such term in section 201
.
(5)Armed services
housing mortgage insuranceSection 801(b) of the
National Housing Act (12 U.S.C.
1748(b)) is amended by striking includes the original lender under a
mortgage, and his successors and assigns approved by the Secretary
and
inserting has the meaning given such term in section 201
.
(6)Group practice
facilities mortgage insuranceSection 1106(8) of the
National Housing Act (12 U.S.C.
1749aaa–5(8)) is amended by striking means the original lender under a
mortgage, and his or its successors and assigns, and
and inserting
has the meaning given such term in section 201, except that such term
also
.
(b)Eligibility for
Insurance
(1)Paragraph (1) of section 8(b) of the
National Housing Act (12 U.S.C.
1706c(b)(1)) is amended—
(A)by striking
, and be held by,
; and
(B)by striking
as responsible and able to service the mortgage properly
.
(2)Single family
housing mortgage insuranceParagraph (1) of section 203(b) of the
National Housing Act (12 U.S.C.
1709(b)(1)) is amended—
(A)by striking
, and be held by,
; and
(B)by striking
as responsible and able to service the mortgage properly
.
(3)Section 221
mortgage insuranceParagraph (1) of section 221(d) of the
National Housing Act (12 U.S.C.
1715l(d)(1)) is amended—
(A)by striking
and be held by
; and
(B)by striking
as responsible and able to service the mortgage properly
.
(4)Home equity
conversion mortgage insuranceParagraph (1) of section 255(d) of
the National Housing Act (12 U.S.C.
1715z–20(d)(1)) is amended by striking as responsible and able to
service the mortgage properly
.
(5)War housing
mortgage insuranceParagraph (1) of section 603(b) of the
National Housing Act (12 U.S.C.
1738(b)(1)) is amended—
(A)by striking
, and be held by,
; and
(B)by striking
as responsible and able to service the mortgage properly
.
(6)War housing
mortgage insurance for large-scale housing projectsParagraph (1)
of section 611(b) of the National Housing
Act (12
U.S.C. 1746(b)(1)) is amended—
(A)by striking
and be held by
; and
(B)by striking
as responsible and able to service the mortgage properly
.
(7)Group practice
facility mortgage insuranceSection 1101(b)(2) of the
National Housing Act (12 U.S.C.
1749aaa(b)(2)) is amended—
(A)by striking
and held by
; and
(B)by striking
as responsible and able to service the mortgage properly
.
(8)National defense
housing insuranceParagraph (1) of section 903(b) of the
National Housing Act (12 U.S.C.
1750b(b)(1)) is amended—
(A)by striking
, and be held by,
; and
(B)by striking
as responsible and able to service the mortgage properly
.
17.Sense of Congress
regarding technology for financial systems
(a)The Congress finds the following:
(1)The Government
Accountability Office has cited the FHA single family housing mortgage
insurance program as a high-risk
program, with a primary reason
being non-integrated and out-dated financial management systems.
(2)The Audit of
the Federal Housing Administration’s Financial Statements for Fiscal Years 2004
and 2003
, conducted by the Inspector General of the Department of
Housing and Urban Development reported as a material weakness that
HUD/FHA’s automated data processing [ADP] system environment must be
enhanced to more effectively support FHA’s business and budget
processes
.
(3)Existing
technology systems for the FHA program have not been updated to meet the latest
standards of the Mortgage Industry Standards Maintenance Organization and have
numerous deficiencies that lenders have outlined.
(4)Improvements to
technology used in the FHA program will—
(A)allow the FHA
program to improve the management of the FHA portfolio, garner greater
efficiencies in its operations, and lower costs across the program; and
(B)result in
efficiencies and lower costs for lenders participating in the program, allowing
them to better use the FHA products in extending homeownership opportunities to
higher credit risk or lower-income families, in a sound manner.
(5)The Mutual
Mortgage Insurance Fund operates without cost to the taxpayers and generates
revenues for the Federal Government.
(b)It is the sense of the Congress that—
(1)the Secretary of
Housing and Urban Development should use a portion of the funds received from
premiums paid for FHA single family housing mortgage insurance that are in
excess of the amounts paid out in claims to substantially increase the funding
for technology used in such FHA program;
(2)the goal of this
investment should be to bring the technology used in such FHA program to the
level and sophistication of the technology used in the conventional mortgage
lending market, or to exceed such level; and
(3)the Secretary of
Housing and Urban Development should report to the Congress not later than 180
days after the date of the enactment of this Act regarding the progress the
Department is making toward such goal and if progress is not sufficient, the
resources needed to make greater progress.
18.Any mortgage insured
under title II of the National Housing
Act before the date of enactment of this Act 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 Act.
19.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 Act. The notice shall
take effect upon issuance.