1.Short title; table of
contents
(a)This Act may be cited
as the Responsible Homeowners Act of
2009
.
(b)The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Stopping mortgage fraud.
Sec. 3. Tax credit for mortgage refinancing.
Sec. 4. Tax incentives for voluntary mortgage
modifications.
Sec. 5. Servicer safe harbor for mortgage loan
modifications.
Sec. 6. Credit for certain home purchases.
Sec. 7. Certain gains on single-family residential rental
property excluded from gross income.
2.
(a)The Secretary of
Housing and Urban Development, the Assistant Secretary for Housing—Federal
Housing Commissioner of the Department of Housing and Urban Development, and
the Director of the Federal Housing Finance Agency, shall give increased
priority to efforts and activities to detect, identify, reduce, and report
fraud in residential mortgage lending, including in the marketing, offering,
origination, underwriting, servicing, and refinancing of residential mortgages,
and in all other aspects of residential mortgage lending. Such efforts and
activities shall include increasing the number of personnel assigned
specifically to mortgage fraud detection.
(b)Authorization of
appropriationsFor fiscal
years 2009, 2010, 2011, 2012, and 2013, there are authorized to be appropriated
to the Attorney General a total of—
(1)$31,250,000 to
support the employment of 30 additional agents of the Federal Bureau of
Investigation and 2 additional dedicated prosecutors at the Department of
Justice to coordinate prosecution of mortgage fraud efforts with the offices of
the United States Attorneys; and
(2)$750,000 to
support the operations of interagency task forces of the Federal Bureau of
Investigation in the areas with the 15 highest concentrations of mortgage
fraud.
3.Tax credit for
mortgage refinancing
(a)Subpart A of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after section 25D the
following new section:
25E.Credit for
mortgage refinancing
(a)In the case of an
individual who completes a refinancing of a qualified residential mortgage
during the taxable year, there shall be allowed as a credit against the tax
imposed by this subtitle for such taxable year an amount equal to
$5,000.
(b)For
purposes of this section—
(1)Qualified
residential mortgageThe term qualified residential
mortgage means indebtedness which is secured by the taxpayer’s principal
residence (within the meaning of section 121). Such term shall not include any
indebtedness which is secured by a residence which is located outside the
United States.
(2)The
term refinancing means a qualified residential mortgage any
portion of the proceeds of which are used to satisfy the taxpayer’s entire
obligation under another qualified residential mortgage.
(c)Coordination
with home buyer creditsNo credit shall be allowed under this
section for any taxable year if the taxpayer is allowed a credit under section
25F, 36, or 1400C for such taxable year or any prior taxable year. No credit
shall be allowed under sections 25F, 36, or 1400C for any taxable year if the
taxpayer is allowed a credit under this subsection (a) for any prior taxable
year.
(d)Exception for
nonresident alien individualsNo credit shall be allowed under subsection
(a) to any taxpayer if such taxpayer is a nonresident alien individual.
(e)A taxpayer may elect to have subsection (a) not apply for any taxable
year.
(f)This
section shall not apply to any refinancing completed after June 30,
2010.
.
(b)The table of sections for subpart A of part IV of
subchapter A of chapter 1 of such Code is amended by inserting after the item
relating to section 25D the following new item:
Sec. 25E. Credit for mortgage
refinancing.
.
(c)The amendments made by this section shall apply to
refinancings completed after the date of the enactment of this Act, in taxable
years ending after such date.
4.Tax incentives
for voluntary mortgage modifications
(a)Exclusion of
qualified appreciation payments
(1)Part III of subchapter B of chapter 1 of the Internal
Revenue Code of 1986 is amended by inserting after section 139C the following
new section:
139D.Mortgage
modification income
(a)In the case of a
lender who enters into a qualified mortgage workout with a borrower, gross
income shall not include any qualified appreciation payment made pursuant to
such workout.
(b)Qualified
mortgage workoutFor purposes of this section, the term
qualified mortgage workout means legally binding modifications to
a qualified mortgage which provide for each of the following:
(1)Monthly payments
under the mortgage which do not exceed 38 percent of the gross monthly income
of the borrower.
(2)Such modifications
shall achieve the requirement of paragraph (1) by means of one or more of the
following:
(A)A reduction in the
interest rate of the loan.
(B)An extension of
the term of the loan (but not greater than 40 years).
(C)A reduction in the
principal amount of the loan.
(3)Provides the
lender with a right to a payment of a share of any appreciation in the value of
the residence which secures the loan upon the disposition of the residence by
the borrower.
(c)Other
definitions and special ruleFor purposes of this section—
(1)The term qualified mortgage means
indebtedness—
(A)which is secured
by a principal residence (within the meaning of section 121) which is located
in the United States, and
(B)which fails to
meet the requirement of subsection (b)(1).
(2)Qualified
appreciation paymentThe term qualified appreciation
payment means the payment described in subsection (b)(4).
(3)Treatment of
refinancingsA refinancing of a qualified mortgage shall be
treated in the same manner as a modification to such mortgage.
(d)Subsection
(a) shall not apply to any qualified mortgage workout which becomes legally
binding after June 30,
2010.
.
(2)The table of
sections for part III of subchapter B of chapter 1 of such Code is amended by
inserting after the item relating to section 139C the following new
item:
Sec. 139D. Mortgage modification
income.
.
(b)Exclusion of
debt cancelled pursuant to a qualified mortgage workout
(1)Paragraph (1) of section 108(a) of such Code is amended
by striking or
at the end of the subparagraph (D), by striking
the period at the end of subparagraph (E) and inserting , or
,
and by adding at the end the following new subparagraph:
(F)the indebtedness is a qualified mortgage
(as defined in section 139D(c)(1)) and is discharged in connection with a
qualified mortgage workout to which section 139D(a)
applies.
.
(2)Subsection (h) of section 108 of such Code is
amended—
(A)by striking
subsection (a)(1)(E)
in paragraph (1) and inserting
subparagraph (E) or (F) of subsection (a)(1)
, and
(B)by striking
qualified
in the heading of such
subsection.
(3)Coordination of
exclusionsParagraph (2) of
section 108(a) of such Code is amended—
(A)by striking and (E)
in
subparagraph (A) and inserting (E), and (F)
, and
(B)by adding at the
end the following new subparagraph:
(D)Mortgage workout
exclusion takes precedence unless elected otherwiseSubparagraphs (B) and (E) shall not apply
to a discharge to which paragraph (1)(F) applies unless the taxpayer elects to
have paragraph (1)(F) not
apply.
.
(c)The amendments made by this section shall apply to qualified
mortgage workouts (within the meaning of section 139D of the Internal Revenue
Code of 1986, as added by this section) which become legally binding after the
date of the enactment of this Act.
5.Servicer safe harbor
for mortgage loan modifications
(a)
(1)Loan
modifications and workout plansNotwithstanding any other
provision of law, and notwithstanding any investment contract between a
servicer and a securitization vehicle or investor, a servicer that acts
consistent with the duty set forth in section 129A(a) of Truth in Lending Act
(15 U.S.C. 1639a) shall not be liable for entering into a loan modification,
workout, or other loss mitigation plan, including, but not limited to,
disposition, including any modification or refinancing undertaken pursuant to
standard loan modification, sale, or disposition guidelines issued by the
Secretary of the Treasury or his designee under the Emergency Economic
Stabilization Act of 2008, with respect to any such mortgage that meets all of
the criteria set forth in paragraph (2)(B) to—
(A)any person, based
on that person’s ownership of a residential mortgage loan or any interest in a
pool of residential mortgage loans or in securities that distribute payments
out of the principal, interest and other payments in loans on the pool;
(B)any person who is
obligated pursuant to a derivatives instrument to make payments determined in
reference to any loan or any interest referred to in subparagraph (A);
or
(C)any person that
insures any loan or any interest referred to in subparagraph (A) under any law
or regulation of the United States or any law or regulation of any State or
political subdivision of any State.
(2)Ability to
modify mortgages
(A)Notwithstanding
any other provision of law, and notwithstanding any investment contract between
a servicer and a securitization vehicle or investor, a servicer—
(i)shall not be
limited in the ability to modify mortgages, the number of mortgages that can be
modified, the frequency of loan modifications, or the range of permissible
modifications; and
(ii)shall not be
obligated to repurchase loans from or otherwise make payments to the
securitization vehicle on account of a modification, workout, or other loss
mitigation plan for a residential mortgage or a class of residential mortgages
that constitute a part or all of the mortgages in the securitization
vehicle,
if any
mortgage so modified meets all of the criteria set forth in subparagraph
(B).(B)The
criteria under this subparagraph with respect to a mortgage are as
follows:
(i)Default on the
payment of such mortgage has occurred or is reasonably foreseeable.
(ii)The
property securing such mortgage is occupied by the mortgagor of such
mortgage.
(iii)The servicer
reasonably and in good faith believes that the anticipated recovery on the
principal outstanding obligation of the mortgage under the particular
modification or workout plan or other loss mitigation action will exceed, on a
net present value basis, the anticipated recovery on the principal outstanding
obligation of the mortgage to be realized through foreclosure.
(3)This
subsection shall apply only with respect to modifications, workouts, and other
loss mitigation plans initiated before January 1, 2012.
(b)Each
servicer that engages in loan modifications or workout plans subject to the
safe harbor in subsection (a) shall report to the Secretary on a regular basis
regarding the extent, scope and results of the servicer’s modification
activities. The Secretary shall prescribe regulations specifying the form,
content, and timing of such reports.
(c)If an unsuccessful action is brought against a servicer by
any person described in subparagraph (A), (B), or (C) of subsection (a)(1),
such person shall bear any actual legal costs of the servicer, including
reasonable attorney fees and expert witness fees, incurred in good faith in
such action, as determined by the court.
(d)For
purposes of this section, the following definitions shall apply:
(1)The
term Secretary means the Secretary of the Treasury.
(2)The term securitization vehicle means a
trust, corporation, partnership, limited liability entity, special purpose
entity, or other structure that—
(A)is the issuer, or
is created by the issuer, of mortgage pass-through certificates, participation
certificates, mortgage-backed securities, or other similar securities backed by
a pool of assets that includes residential mortgage loans; and
(B)holds such
mortgages.
6.Credit for certain
home purchases
(a)Subpart A of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986, as amended by this Act, is amended by inserting
after section 25E the following new section:
25F.Credit for
certain home purchases
(a)In the case of an
individual who makes an eligible purchase during the taxable year, there shall
be allowed as a credit against the tax imposed by this subtitle for such
taxable year an amount equal to so much of the purchase price of the residence
as does not exceed $15,000.
(b)No credit shall
be allowed under subsection (a) to any taxpayer with respect to the purchase of
any residence unless such taxpayer makes a downpayment of not less 5 percent of
the purchase price of such residence.
(c)For
purposes of this section—
(1)The term eligible purchase means the
purchase of a residence for the taxpayer if—
(A)such residence is
located in the United States,
(B)the construction
of such residence began before 2009, and
(C)such purchase is
made by the taxpayer before July 1, 2010.
(2)The terms purchase and purchase
price have the respective meanings given such terms by section
26(c).
(d)No credit shall be allowed under subsection
(a) to any taxpayer for any taxable year with respect to the purchase of a
residence if—
(1)credit under
section 36 (relating to first-time homebuyer credit) or 1400C (relating to
first-time homebuyer in the District of Columbia) is allowed to the taxpayer
(or the taxpayer's spouse) for such taxable year or any prior taxable
year,
(2)the residence is
financed by the proceeds of a qualified mortgage issue the interest on which is
exempt from tax under section 103,
(3)the taxpayer is a
nonresident alien individual, or
(4)the taxpayer
disposes of such residence (or such residence ceases to be a residence of the
taxpayer (or, if married, the taxpayer’s spouse)) before the close of such
taxable year.
(e)Limitation based
on amount of taxIn the case of a taxable year to which section
26(a)(2) does not apply, the credit allowed under subsection (a) for any
taxable year shall not exceed the excess of—
(1)the sum of the
regular tax liability (as defined in section 26(b)) plus the tax imposed by
section 55, over
(2)the sum of the
credits allowable under this subpart (other than this section and section 25D)
for the taxable year.
(f)Carryforwards of
unused credit
(1)Rule for years
in which all personal credits allowed against regular and alternative minimum
taxIn the case of a taxable
year to which section 26(a)(2) applies, if the credit allowable under
subsection (a) for any taxable year exceeds the limitation imposed by section
26(a)(2) for such taxable year reduced by the sum of the credits allowable
under this subpart (other than this section and sections 25D and 1400C), such
excess shall be carried to the succeeding taxable year and added to the credit
allowable under subsection (a) for such taxable year.
(2)In the case of a taxable year to which section 26(a)(2)
does not apply, if the credit allowable under subsection (a) for any taxable
year exceeds the limitation imposed by subsection (e) for such taxable year,
such excess shall be carried to the succeeding taxable year and added to the
credit allowable under subsection (a) for such taxable year.
(3)No
credit may be carried forward under this subsection to any taxable year
following the third taxable year after the taxable year in which the credit
arose. For purposes of the preceding sentence, credits shall be treated as used
on a first-in first-out basis.
(g)
(1)Rules similar to the
rules of section 26(c)(5) shall apply for purposes of this section.
(2)Married
individuals filing separate returns, etcRules similar to the
rules of subparagraphs (B) and (C) of section 26(b)(1) shall apply for purposes
of this section.
(3)Rules
similar to the rules of section 26(e) shall apply for purposes of this
section.
(h)Rules similar to the rules of section 26(f) shall apply
for purposes of this section, except that—
(1)paragraph (1)
thereof shall be applied by substituting 331/3
percent
for 62/3 percent
,
and
(2)paragraph (7)
thereof shall be applied by substituting 3 years
for 15
years
.
.
(b)
(1)(A)Section 23(b)(4)(B) of such Code is amended
by striking section 25D
inserting sections 25D and
25F
.
(B)Section 24(b)(3)(B) of such Code is
amended by inserting 25F,
after 25D,
.
(C)Section 25(e)(1)(C)(ii) of such Code is
amended by inserting 25F,
after 25D,
.
(D)Section 25B(g)(2) of such Code is amended
by inserting 25F,
after 25D,
.
(E)Section 26(a)(1) of such Code is amended by
inserting 25F,
after 25D,
.
(F)Section 30(c)(2)(B)(ii) of such Code is
amended by inserting 25F,
after 25D,
.
(G)Section 30B(g)(2)(B)(ii) of such Code is
amended by inserting 25F,
after 25D,
.
(H)Section 30D(c)(2)(B)(ii) of such Code is
amended by striking and 25D
and inserting , 25D, and
25F
.
(I)Section 904(i) of such Code is amended by
inserting 25F,
after 25B,
.
(2)Paragraph (1) of
section 23(c) of such Code is amended by inserting , 25F,
after
25D,
.
(3)The table of
sections for subpart A of part IV of subchapter A of chapter 1 of such Code, as
amended by this Act, is amended by inserting after the item relating to section
25E the following new item:
Sec. 25F. Credit for certain home
purchases.
.
(c)The amendments made by this section shall apply to
residences purchased after the date of the enactment of this Act, in taxable
years ending after such date.
7.Certain gains on
single-family residential rental property excluded from gross income
(a)Part III of
subchapter B of chapter 1 of the Internal Revenue Code of 1986, as amended by
this Act, is amended by inserting after section 139D the following new
section:
139E.Certain gains
on single-family residential rental property
(a)Gross income shall
not include any gain from the sale or exchange of a qualified single-family
residential rental property.
(b)The
amount of gain excluded from gross income under subsection (a) with respect to
any sale or exchange shall not exceed $250,000.
(c)Qualified
single-family residential rental propertyFor purposes of this
section—
(1)The term qualified property means any real
property located in the United States which—
(A)was acquired by
the taxpayer by purchase (as defined in section 179(d)(2)) during the period
beginning on the date of the enactment of this section and ending on June 30,
2010,
(B)was held by the
taxpayer for 2 years or more, and
(C)was rented as a
single dwelling unit on a regular basis during 2 of the taxable years in the 5
taxable year period ending with the taxable year in which the property was sold
or exchanged.
(2)For purposes of paragraph (1)(C), property shall not be
treated as rented on a regular basis during any taxable year unless—
(A)such property is
rented on the basis of months or longer periods, and
(B)such property is
rented for not less than 6 months of such year.
(d)Exception for
nonresident alien individualsNo credit shall be allowed under subsection
(a) to any taxpayer if such taxpayer is a nonresident alien
individual.
.
(b)The table of sections for part III of subchapter B of
chapter 1 of such Code, as amended by this Act, is amended by inserting after
the item relating to section 139D the following new item:
Sec. 139E. Certain gains on single-family residential rental
property.
.
(c)The amendments made by this section shall apply to property
acquired after the date of the enactment of this Act.