[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3704 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 3704

   To improve the financial safety and soundness of the FHA mortgage 
                           insurance program.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 4, 2010

Mr. Begich (for himself and Mr. Brown of Ohio) introduced the following 
 bill; which was read twice and referred to the Committee on Banking, 
                       Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
   To improve the financial safety and soundness of the FHA mortgage 
                           insurance program.

    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 Reform Act of 2010''.

SEC. 2. INDEMNIFICATION BY MORTGAGEES.

    (a) In General.--Section 202 of the National Housing Act (12 U.S.C. 
1708) is amended by adding at the end the following new subsection:
    ``(i) Indemnification by Mortgagees.--
            ``(1) In general.--If the Secretary determines that a 
        mortgage executed by a mortgagee approved by the Secretary 
        under the direct endorsement program or insured by a mortgagee 
        pursuant to the delegation of authority under section 256 was 
        not materially originated or underwritten in accordance with 
        the requirements established by the Secretary, as determined by 
        the Secretary, and the Secretary pays an insurance claim with 
        respect to the mortgage within a reasonable period specified by 
        the Secretary, the Secretary shall require the mortgagee 
        approved by the Secretary under the direct endorsement program 
        or the mortgagee delegated authority under section 256 to 
        indemnify the Secretary for the loss.
            ``(2) Fraud or misrepresentation.--If fraud or 
        misrepresentation was involved in connection with the 
        origination or underwriting, the Secretary may require the 
        mortgagee approved by the Secretary under the direct 
        endorsement program or the mortgagee delegated authority under 
        section 256 to indemnify the Secretary for the loss regardless 
        of when an insurance claim is paid.
            ``(3) Requirements and procedures.--The Secretary shall 
        issue regulations establishing appropriate requirements and 
        procedures governing the indemnification of the Secretary by 
        the mortgagee.''.
    (b) Early Term Defaults.--Section 202(a) of the National Housing 
Act (12 U.S.C. 1708(a)) is amended by adding at the end the following:
            ``(8) Indemnification.--The Secretary shall take any 
        actions required to seek indemnification for any early term 
        default and claim on a mortgage which--
                    ``(A) is an obligations of the Fund; and
                    ``(B) as of the date of origination of the 
                mortgage, was not in material compliance with a 
                provision, regulation, or other guideline established 
                or promulgated pursuant to this title.
            ``(9) Programmatic review of defaults.--The Secretary shall 
        establish and maintain a program--
                    ``(A) to review the cause of each early term 
                default and claim on a mortgage described under 
                paragraph (8); and
                    ``(B) to require indemnification of any such early 
                term default that did not meet the guidelines and 
                requirements set forth pursuant to this section prior 
                to the date of origination.
            ``(10) Definition of early term default.--For purposes of 
        this subsection, the term `early term default' means any loan 
        that becomes delinquent or that is in default during the 2-year 
        period beginning on the date of origination of such loan.''.

SEC. 3. DELEGATION OF INSURING AUTHORITY.

    Section 256 of the National Housing Act (12 U.S.C. 1715z-21) is 
amended--
            (1) by striking subsection (c);
            (2) in subsection (e), by striking ``, including'' and all 
        that follows through ``by the mortgagee''; and
            (3) by redesignating subsections (d) and (e) as subsections 
        (c) and (d), respectively.

SEC. 4. AUTHORITY TO TERMINATE MORTGAGEE ORIGINATION AND UNDERWRITING 
              APPROVAL.

    Section 533 of the National Housing Act (12 U.S.C. 1735f-11) is 
amended--
            (1) in the first sentence of subsection (b), by inserting 
        ``or areas or on a nationwide basis'' after ``area'' each place 
        such term appears; and
            (2) in subsection (c), by striking ``(c)'' and all that 
        follows through ``The Secretary'' in the first sentence of 
        paragraph (2) and inserting the following:
    ``(c) Termination of Mortgagee Origination and Underwriting 
Approval.--
            ``(1) Termination authority.--If the Secretary determines, 
        under the comparison provided in subsection (b), that a 
        mortgagee has a rate of early defaults and claims that is 
        excessive, the Secretary may terminate the approval of the 
        mortgagee to originate or underwrite single family mortgages 
        for any area, or areas, or on a nationwide basis, 
        notwithstanding section 202(c) of this Act.
            ``(2) Procedure.--The Secretary''.

SEC. 5. DEPUTY ASSISTANT SECRETARY OF FHA FOR RISK MANAGEMENT AND 
              REGULATORY AFFAIRS.

    (a) Establishment of Position.--Subsection (b) of section 4 of the 
Department of Housing and Urban Development Act (42 U.S.C. 3533(b)) is 
amended--
            (1) by inserting ``(1)'' after ``(b)''; and
            (2) by adding at the end the following new paragraph:
    ``(2) There shall be in the Department, within the Federal Housing 
Administration, a Deputy Assistant Secretary for Risk Management and 
Regulatory Affairs, who shall be appointed by the Secretary and shall 
be responsible to the Federal Housing Commissioner for all matters 
relating to managing and mitigating risk to the mortgage insurance 
funds of the Department and ensuring the performance of mortgages 
insured by the Department.''.
    (b) Termination.--Upon the appointment and confirmation of the 
initial Deputy Assistant Secretary for Risk Management and Regulatory 
Affairs pursuant to section 4(b)(2) of the Department of Housing and 
Urban Development Act, as amended by subsection (a) of this section, 
the position of chief risk officer within the Federal Housing 
Administration, filled by appointment by the Federal Housing 
Commissioner, is abolished.

SEC. 6. USE OF OUTSIDE CREDIT RISK ANALYSIS SOURCES.

    Section 202 of the National Housing Act (12 U.S.C. 1708), as 
amended by the preceding provisions of this Act, is further amended by 
adding at the end the following new subsection:
    ``(j) Use of Outside Credit Risk Analysis Sources.--The Secretary 
may obtain the services of, and enter into contracts with, private and 
other entities outside of the Department in--
            ``(1) analyzing credit risk models and practices employed 
        by the Department in connection with such mortgages;
            ``(2) evaluating underwriting standards applicable to such 
        mortgages insured by the Department; and
            ``(3) analyzing the performance of lenders in complying 
        with, and the Department in enforcing, such underwriting 
        standards.''.

SEC. 7. REVIEW OF MORTGAGEE PERFORMANCE.

    Section 533 of the National Housing Act (12 U.S.C. 1735f-11) is 
amended--
            (1) in subsection (a), by inserting after the period at the 
        end the following: ``For purposes of this subsection, the term 
        `early default' means a default that occurs within 24 months 
        after a mortgage is originated or such alternative appropriate 
        period as the Secretary shall establish.'';
            (2) in subsection (b), by inserting after the period at the 
        end of the first sentence the following: ``The Secretary shall 
        also identify which mortgagees have had a significant or rapid 
        increase, as determined by the Secretary, in the number or 
        percentage of early defaults and claims on such mortgages, with 
        respect to all mortgages originated by the mortgagee or 
        mortgages on housing located in any particular geographic area 
        or areas.''; and
            (3) by adding at the end the following new subsections:
    ``(d) Sufficient Resources.--There is authorized to be appropriated 
to the Secretary for each of fiscal years 2010 through 2014 the amount 
necessary to provide additional full-time equivalent positions for the 
Department, or for entering into such contracts as are necessary, to 
conduct reviews in accordance with the requirements of this section and 
to carry out other responsibilities relating to ensuring the safety and 
soundness of the Mutual Mortgage Insurance Fund.
    ``(e) Reporting to Congress.--Not later than 90 days after the date 
of enactment of the FHA Reform Act of 2010 and not less often than 
annually thereafter, the Secretary shall make available to the 
Committee on Financial Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the Senate any 
information and conclusions pursuant to the reviews required under 
subsection (a). Such report shall not include detailed information on 
the performance of individual mortgages.''.

SEC. 8. USE OF NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY.

    (a) Use by Mortgagees, Officers, and Owners; Use for Insured 
Mortgages.--
            (1) Mortgagees, officers, and owners.--Section 202 of the 
        National Housing Act (12 U.S.C. 1708), as amended by the 
        preceding provisions of this Act, is further amended by adding 
        at the end the following new subsections:
    ``(k) Use of Nationwide Mortgage Licensing System and Registry for 
Mortgagees, Officers, and Owners.--The Secretary may require, as a 
condition for approval of a mortgagee by the Secretary to originate or 
underwrite mortgages on single family residences that are insured by 
the Secretary, that the mortgagee--
            ``(1) obtain and maintain a unique company identifier 
        assigned by the Nationwide Mortgage Licensing System and 
        Registry, as established by the Conference of State Bank 
        Supervisors and the American Association of Residential 
        Mortgage Regulators; and
            ``(2) obtain and maintain, as relates to any and all 
        officers or owners of the mortgagee who are subject to the 
        requirements of the S.A.F.E. Mortgage Licensing Act of 2008, or 
        are otherwise required to register with the Nationwide Mortgage 
        Licensing System and Registry, the unique identifier assigned 
        by the Nationwide Mortgage Licensing System and Registry, as 
        established by the Conference of State Bank Supervisors and the 
        American Association of Residential Mortgage Regulators.''.
            (2) Insured mortgages.--Section 203 of the National Housing 
        Act (12 U.S.C. 1709) is amended by adding at the end the 
        following new subsection:
    ``(y) Use of Nationwide Mortgage Licensing System and Registry for 
Insured Loans.--The Secretary may require each mortgage insured under 
this section to include the unique identifier (as such term is defined 
in section 1503 of the S.A.F.E. Mortgage Licensing act of 2008 (12 
U.S.C. 5102)) and any unique company identifier assigned by the 
Nationwide Mortgage Licensing System and Registry, as established by 
the Conference of State Bank Supervisors and the American Association 
of Residential Mortgage Regulators.''.
    (b) Coordination With State Regulatory Agencies.--Section 202 of 
the National Housing Act (12 U.S.C. 1708), as amended by the preceding 
provisions of this Act, is further amended by adding at the end the 
following new subsection:
    ``(l) Information Sharing With State Regulatory Agencies.--
            ``(1) Joint protocol on information sharing.--The Secretary 
        shall, through consultation with State regulatory agencies, 
        pursue protocols for information sharing, including the 
        appropriate treatment of confidential or otherwise restricted 
        information, regarding either actions described in subsection 
        (c)(3) of this section or disciplinary or enforcement actions 
        by a State regulatory agency or agencies against a mortgagee 
        (as such term is defined in subsection (c)(7)).
            ``(2) Coordination.--To the greatest extent possible, the 
        Secretary and appropriate State regulatory agencies shall 
        coordinate disciplinary and enforcement actions involving 
        mortgagees (as such term is defined in subsection (c)(7)).''.

SEC. 9. REPORTING OF MORTGAGEE ACTIONS TAKEN AGAINST OTHER MORTGAGEES.

    Section 202 of the National Housing Act (12 U.S.C. 1708(e)), as 
amended by the preceding provisions of this Act, is further amended by 
adding at the end the following new subsection:
    ``(m) Notification of Mortgagee Actions.--The Secretary shall 
require each mortgagee, as a condition for approval by the Secretary to 
originate or underwrite mortgages on single family or multifamily 
housing that are insured by the Secretary, if such mortgagee engages in 
the purchase of mortgages insured by the Secretary and originated by 
other mortgagees or in the purchase of the servicing rights to such 
mortgages, and such mortgagee at any time takes action to terminate or 
discontinue such purchases from another mortgagee based on any 
determination, evidence, or report of fraud or material 
misrepresentation in connection with the origination of such mortgages, 
the mortgagee shall, not later than 15 days after taking such action, 
shall notify the Secretary of the action taken and the reasons for such 
action.''.

SEC. 10. ANNUAL ACTUARIAL STUDY AND QUARTERLY REPORTS ON MUTUAL 
              MORTGAGE INSURANCE FUND.

    Subsection (a) of section 202 of the National Housing Act (12 
U.S.C. 1708(a)) is amended--
            (1) in paragraph (4)--
                    (A) by striking ``The Secretary shall provide for 
                an independent'' and inserting the following:
                    ``(A) In general.--The Secretary shall provide for 
                an independent'';
                    (B) in subparagraph (A) (as so designated by this 
                paragraph), in the second sentence, by inserting before 
                the period at the end the following: ``, any changes to 
                the current or projected safety and soundness of the 
                Fund since the most recent report under this paragraph 
                or paragraph (5), and any risks to the Fund''; and
                    (C) by adding at the end the following:
                    ``(B) Additional reporting on defaults.--The report 
                required under subparagraph (A) shall include--
                            ``(i) all data, for each of the last 
                        preceding fiscal years, on each default of a 
                        mortgage which is an obligation of the Fund, 
                        including--
                                    ``(I) the actual number of all such 
                                defaults; and
                                    ``(II) the percentage of all such 
                                defaults, broken out by quarter for 
                                each such fiscal year;
                            ``(ii) all data, for each of the last 
                        preceding fiscal years, on each early term 
                        default of mortgage which is an obligation of 
                        the Fund, including--
                                    ``(I) the actual number of all such 
                                early term defaults;
                                    ``(II) the percentage of all such 
                                early term defaults, broken out by 
                                quarter for each such fiscal year; and
                                    ``(III) a summary of the findings 
                                of the causes of such early term 
                                defaults discovered by the program 
                                established under paragraph (9); and
                            ``(iii) the results of all known 
                        investigations or inquiries concerning defaults 
                        on loans insured under this title or any 
                        insurance payments made by the Secretary 
                        pursuant to this title, including--
                                    ``(I) the number of such loans as 
                                to which the Secretary made an inquiry 
                                about the reasons for loss or default;
                                    ``(II) the identity of the direct 
                                endorsement underwriter of such loan;
                                    ``(III) all of the reasons 
                                determined to be the cause for each 
                                default or insurance payment, including 
                                whether such default or payment was due 
                                to an underwriting error, borrower 
                                fraud or misrepresentation, mortgage 
                                broker fraud or misrepresentation, 
                                appraiser fraud or misrepresentation, 
                                lender fraud or misrepresentation, 
                                reduced borrower income, or reduced 
                                property value;
                                    ``(IV) whether there was an 
                                insurance payment made pursuant to this 
                                title in connection with the loan, and 
                                if so, the amount of such payment and 
                                the date on which such payment was 
                                made;
                                    ``(V) the rate at which such loans 
                                are becoming seriously delinquent, as 
                                determined by the Secretary;
                                    ``(VI) whether the rate set for 
                                under subclause (V) is increasing or 
                                decreasing;
                                    ``(VII) if there are certain 
                                subsets of mortgages within the larger 
                                set of mortgages which are obligations 
                                of the Fund that have great or lesser 
                                rates of default; and
                                    ``(VIII) if a subset of mortgages 
                                is identified under subclause (VII), 
                                the characteristics of such subset of 
                                mortgages and the financial exposure of 
                                the Federal Housing Administration 
                                created by such subsets.
                    ``(C) Timing of reports.--The first annual report, 
                and each annual report thereafter, to include the 
                additional reporting on defaults as required by 
                subparagraph (B), shall be submitted within 90 days of 
                the first day of the next fiscal year, or if such 
                report for the past fiscal year is submitted to 
                Congress prior to the date of enactment of the FHA 
                Reform Act of 2010, such report shall be updated and 
                resubmitted to reflect such additional reporting 
                requirements not later than the last day of the full 
                calendar quarter following the date of enactment of the 
                FHA Reform Act of 2010.''; and
            (2) in paragraph (5)--
                    (A) in the matter prior to subparagraph (A), by 
                striking ``During each fiscal year'' and inserting the 
                following:
                    ``(A) In general.--During each fiscal 8 year;'';
                    (B) by redesignating subparagraphs (A) through (E) 
                as clauses (i) through (v), respectively, and moving 
                the margins 2 ems to the right;
                    (C) in clause (iv) of subparagraph (A) (as so 
                redesignated), by striking ``and'' at the end;
                    (D) in clause (v) of subparagraph (A) (as so 
                redesignated), by striking the period at the end and 
                inserting ``; and'';
                    (E) by adding at the end of subparagraph (A) the 
                following:
                            ``(vi) any other factors that are likely to 
                        have an impact on the financial status of the 
                        Fund or cause any material changes to the 
                        current or projected safety and soundness of 
                        the Fund since the most recent report under 
                        paragraph (4).
                The Secretary may include in the report under this 
                paragraph any recommendations not made in the most 
                recent report under paragraph (4) that may be needed to 
                ensure that the Fund remains financially sound.''; and
                    (F) by adding at the end the following:
                    ``(B) Additional reporting on defaults.--The report 
                required under subparagraph (A) shall include--
                            ``(i) all data, for each of the last 
                        preceding fiscal years, on each default of 
                        mortgage which is an obligation of the Fund, 
                        including--
                                    ``(I) the actual number of all such 
                                defaults; and
                                    ``(II) the percentage of all such 
                                defaults, broken out by quarter for 
                                each such fiscal year;
                            ``(ii) all data, for each of the last 
                        preceding fiscal years, on each early term 
                        default of mortgage which is an obligation of 
                        the Fund, including--
                                    ``(I) the actual number of all such 
                                early term defaults;
                                    ``(II) the percentage of all such 
                                early term defaults, broken out by 
                                quarter for each such fiscal year; and
                                    ``(III) a summary of the findings 
                                of the causes of such early term 
                                defaults discovered by the program 
                                established under paragraph (9); and
                            ``(iii) the results of all known 
                        investigations or inquiries concerning defaults 
                        on loans insured under this title or any 
                        insurance payments made by the Secretary 
                        pursuant to this title, including--
                                    ``(I) the number of such loans as 
                                to which the Secretary made an inquiry 
                                about the reasons for loss or default;
                                    ``(II) the identity of the direct 
                                endorsement underwriter of such loan;
                                    ``(III) all the reasons determined 
                                to be the cause for each default or 
                                insurance payment, including whether 
                                such default or payment was due to an 
                                underwriting error, borrower fraud or 
                                misrepresentation, mortgage broker 
                                fraud or misrepresentation, appraiser 
                                fraud or misrepresentation, lender 
                                fraud or misrepresentation, reduced 
                                borrower income, or reduced property 
                                value;
                                    ``(IV) whether there was an 
                                insurance payment made pursuant to this 
                                title in connection with the loan, and 
                                if so, the amount of such payment and 
                                the date on which such payment was 
                                made;
                                    ``(V) the rate at which such loans 
                                are becoming seriously delinquent, as 
                                determined by the Secretary;
                                    ``(VI) whether the rate set for 
                                under subclause (V) is increasing or 
                                decreasing;
                                    ``(VII) if there are certain 
                                subsets of mortgages within the larger 
                                set of mortgages which are obligations 
                                of the Fund that have great or lesser 
                                rates of default; and
                                    ``(VIII) if a subset of mortgages 
                                is identified under subclause (VII), 
                                the characteristics of such subset of 
                                mortgages and the financial exposure of 
                                the Federal Housing Administration 
                                created by such subsets.''.

SEC. 11. REVIEW OF DOWNPAYMENT REQUIREMENTS.

    Section 205 of the National Housing Act (12 U.S.C. 1711) is amended 
by adding at the end the following new subsection:
    ``(g) Review of Downpayment Requirements.--If, at any time when the 
capital ratio (as such term is defined in subsection (f)) of the Mutual 
Mortgage Insurance Fund does not comply with the requirement under 
subsection (f)(1), the Secretary establishes a cash investment 
requirement, for all mortgages or mortgagors or with respect to any 
group of mortgages or mortgagors, that exceeds the minimum percentage 
or amount required under section 203(b)(9), thereafter upon the capital 
ratio first complying with the requirement under subsection (f)(1) the 
Secretary shall review such cash investment requirement and, if the 
Secretary determines that such percentage or amount may be reduced 
while maintaining such compliance, the Secretary may subsequently 
reduce such requirement by such percentage or amount as the Secretary 
considers appropriate.''.

SEC. 12. AUTHORIZATION TO PARTICIPATE IN THE ORIGINATION OF FHA-INSURED 
              LOANS.

    (a) Single Family Mortgages.--Section 203(b) of the National 
Housing Act (12 U.S.C. 1709(b)) is amended by striking paragraph (1) 
and inserting the following new paragraph:
            ``(1) Have been made to a mortgagee approved by the 
        Secretary or to a person or entity authorized by the Secretary 
        under section 202(d)(1) to participate in the origination of 
        the mortgage, and be held by a mortgagee approved by the 
        Secretary as responsible and able to service the mortgage 
        properly.''.
    (b) Home Equity Conversion Mortgages.--Section 255(d) of the 
National Housing Act (12 U.S.C. 1715z-20(d)) is amended by striking 
paragraph (1) and inserting the following new paragraph:
            ``(1) have been originated by a mortgagee approved by, or 
        by a person or entity authorized under section 202(d)(1) to 
        participate in the origination by, the Secretary;''.

SEC. 13. DEFAULT AND ORIGINATION INFORMATION BY LOAN SERVICER AND 
              ORIGINATING DIRECT ENDORSEMENT LENDER.

    (a) Collection of Information.--Paragraph (2) of section 540(b) of 
the National Housing Act (12 U.S.C. 1712 U.S.C. 1735f-18(b)(2)) is 
amended by adding at the end the following new subparagraph:
                    ``(C) For each entity that services insured 
                mortgages, data on the performance of mortgages 
                originated during each calendar quarter occurring 
                during the applicable collection period, disaggregated 
                by the direct endorsement mortgagee from whom such 
                entity acquired such servicing.''.
    (b) Applicability.--Information described in subparagraph (C) of 
section 540(b)(2) of the National Housing Act, as added by subsection 
(a) of this section, shall first be made available under such section 
540 for the applicable collection period (as such term is defined in 
such section) relating to the first calendar quarter ending after the 
expiration of the 12-month period that begins on the date of the 
enactment of this Act.

SEC. 14. THIRD PARTY SERVICER OUTREACH.

    (a) Authority.--The Secretary of Housing and Urban Development may, 
to the extent any amounts for fiscal year 2010 or 2011 are made 
available in advance in appropriation Acts for reimbursements under 
this section, provide reimbursement to servicers of covered mortgages 
(as such term is defined in subsection (f)) for costs of obtaining the 
services of independent third parties meeting the requirements under 
subsection (b) of this section to make in-person contact with 
mortgagors under covered mortgages whose payments under such mortgages 
are 60 or more days past due, solely for the purposes of providing 
information to such mortgagors regarding--
            (1) available counseling by housing counseling agencies 
        approved by the Secretary;
            (2) available mortgage loan modification, refinance, and 
        assistance programs; and
            (3) available counseling regarding financial management and 
        credit risk.
    (b) Qualified Independent Third Parties.--An independent third 
party meets the requirements of this subsection if the third party--
            (1) is an entity, including a housing counseling agency 
        approved by the Secretary, that meets standards, 
        qualifications, and requirements (including regarding 
        foreclosure prevention training, quality monitoring, 
        safeguarding of non-public information) established by the 
        Secretary for purposes of this section for in-person contact 
        about available mortgage loan modification, refinance, and 
        assistance programs; and
            (2) does not charge any fees or require other payments, 
        directly or indirectly, from any mortgagor for making in-person 
        contact and providing information and documents under this 
        section.
    (c) Treatment of Personal, Non-Public, and Confidential 
Information.--An independent third party whose services are obtained 
using amounts made available for use under this section and the 
mortgage servicer obtaining such services shall not use, disclose, or 
distribute any personal, non-public, or confidential information about 
a mortgagor obtained during an in-person contact with the mortgagor, 
except for purposes of engaging in the process of modification or 
refinance of the covered mortgage.
    (d) Date of Contact and Disclosures.--Each independent third party 
whose services are obtained by a mortgage servicer using amounts made 
available for use under this section shall--
            (1) initiate in-person contact with a mortgagor not later 
        than 10 days after the date upon which payments under the 
        covered mortgage of the mortgagor become 60 days past due; and
            (2) upon making in-person contact with a mortgagor, provide 
        the mortgagor with a written document that discloses--
                    (A) the name of, and contact information for, the 
                independent third party and the mortgage servicer;
                    (B) that the independent third party has contracted 
                with the mortgage servicer to provide the in-person 
                contact at no charge to the mortgagor;
                    (C) that the independent third party is an agent of 
                the mortgage servicer;
                    (D) that the in-person contact with the mortgagor 
                consists of providing information about available 
                counseling by a housing counseling agency approved by 
                the Secretary and available mortgage loan modification, 
                refinance, and assistance programs;
                    (E) that the independent third party and the 
                mortgage servicer are prohibited from the use, 
                disclosure, or distribution of personal, non-public, 
                and confidential information about the mortgagor, 
                obtained during the in-person contact, except for 
                purposes of engaging in the process of modification or 
                refinance of the covered mortgage; and
                    (F) any other information that the Secretary 
                determines should be disclosed.
    (e) Priority.--In providing reimbursements under this section, the 
Secretary of Housing and Urban Development shall provide priority to 
independent third parties serving mortgagors under covered mortgages in 
areas experiencing a mortgage foreclosure rate and unemployment rate 
higher than the national average for the most recent 12-month period 
for which satisfactory data are available.
    (f) Definition of Covered Mortgage.--For purposes of this section, 
the term ``covered mortgage'' means a mortgage on a 1- to 4-family 
residence insured under the provisions of subsection (b) or (k) of 
section 203, section 234(c), or 251 of the National Housing Act (12 
U.S.C. 1709, 1715y, 1715z-16).

SEC. 15. GAO REPORT ON FHA.

    Not later than the expiration of the 12-month period beginning on 
the date of the enactment of this Act, the Comptroller General of the 
United States shall submit to the Congress a report on the single 
family mortgage insurance programs of the Secretary of Housing and 
Urban Development and the Mutual Mortgage Insurance Fund established 
under section 202(a) of the National Housing Act (12 U.S.C. 1708(a)) 
that--
            (1) analyzes such Fund, the economic net worth, capital 
        ratio, and unamortized insurance-in-force (as such terms are 
        defined in section 205(f)(4) of such Act (12 U.S.C. 
        1711(f)(4))) of such Fund, the risks to the Fund, how the 
        capital ratio of the Fund affects the mortgage insurance 
        programs under the Fund and the broader housing market, the 
        extent to which the housing markets are more dependent on 
        mortgage insurance provided through the Fund since the 
        financial crisis began in 2008, and the exposure of the 
        taxpayers for obligations of the Fund;
            (2) analyzes the methodology for determining the Fund's 
        capital ratio under section 205(f) of such Act and examines 
        alternative methods for assessing the Fund's financial 
        condition and their potential impacts on the Fund's ability to 
        meet the operational goals under section 202(a)(7) of such Act;
            (3) analyzes the potential effects of the increases in the 
        limits on the maximum principal obligation of mortgages made by 
        the FHA Modernization Act of 2008 (title I of division B of 
        Public Law 110-289), section 202 of the Economic Stimulus Act 
        of 2008 (Public Law 110-185; 122 Stat. 620), section 1202 of 
        division A of the American Recovery and Reinvestment Act of 
        2009 (Public Law 111-5; 123 Stat. 225), and section 166 of the 
        Continuing Appropriations Resolution, 2010 (as added by section 
        104 of division B of Public Law 111-88; 123 Stat. 29723) on--
                    (A) the risks to and safety and soundness of the 
                Fund;
                    (B) the impact on the affordability and 
                availability of mortgage credit for borrowers for loans 
                authorized under such higher loan limits;
                    (C) the private market for residential mortgage 
                loans that are not insured by the Secretary of Housing 
                and Urban Development; and
                    (D) the Federal National Mortgage Association and 
                the Federal Home Loan Mortgage Corporation; and
            (4) analyzes the impact on affordability to FHA borrowers, 
        and the impact to the Fund, of seller concessions or 
        contributions to a borrower purchasing a residence using a 
        mortgage that is insured by the Secretary.

SEC. 16. AUTHORITY TO ESTABLISH HIGHER MINIMUM CASH INVESTMENT 
              REQUIREMENT.

    (a) Authority.--Paragraph (9) of section 203(b) of the National 
Housing Act (12 U.S.C. 1709(b)(9)) is amended by adding at the end the 
following new subparagraph:
                    ``(D) Authority to establish higher minimum 
                requirement.--The Secretary may establish a higher 
                minimum cash investment requirement than the minimum 
                requirement under subsection (a), for all mortgagors or 
                a certain class or classes of mortgagors, which may be 
                based on criteria related to borrowers' credit scores 
                or other industry standards related to borrowers' 
                financial soundness. In establishing such a higher 
                minimum cash investment requirement, the Secretary 
                shall take into consideration the findings of the most 
                recent annual report to the Congress on minimum cash 
                investments pursuant to section 16(b) of the FHA Reform 
                Act of 2010.''.
    (b) Report.--Not later than the expiration of the 12-month period 
beginning on the date of the enactment of this Act and annually 
thereafter, the Secretary of Housing and Urban Development shall submit 
to the Committee on Financial Services of the House of Representatives 
and the Committee on Banking, Housing, and Urban Affairs of the Senate 
a report detailing the implementation of the minimum cash investment 
requirements under section 203(b)(9) of the National Housing Act (12 
U.S.C. 1709(b)(9)) and discussing and analyzing options for proposed 
changes to such requirements, including changes that would take into 
account borrowers' credit scores or other industry standards related to 
borrowers' financial soundness. Such report shall--
            (1) analyze the impacts that any actual or proposed such 
        changes are projected to have on--
                    (A) the financial soundness of the Mutual Mortgage 
                Insurance Fund;
                    (B) the housing finance market of the United 
                States; and
                    (C) the number of borrowers served by the Federal 
                Housing Administration;
            (2) explain the reasons for any actual or proposed such 
        changes in the such requirements made since the last report 
        under this subsection;
            (3) evaluate the impact of any actual or proposed such 
        changes in such requirements on the Mutual Mortgage Insurance 
        Fund;
            (4) evaluate the impacts of any actual or proposed such 
        changes on potential mortgagors under mortgages on one- to 
        four-family dwellings insured by the Secretary under the 
        National Housing Act; and
            (5) evaluate the impact of any actual or proposed such 
        changes on the soundness of the housing market in the United 
        States.

SEC. 17. MORTGAGE INSURANCE PREMIUM REFUNDS.

    (a) Authority.--The Secretary of Housing and Urban Development 
shall, to the extent that amounts are made available pursuant to 
subsection (c), provide refunds of unearned premium charges paid at the 
time of insurance for mortgage insurance under title II of the National 
Housing Act (12 U.S.C. 1707 et seq.) to or on behalf of mortgagors 
under mortgages described in subsection (b).
    (b) Eligible Mortgages.--A mortgage described in this section is a 
mortgage on a one- to four-family dwelling that--
            (1) was insured under title II of the National Housing Act 
        (12 U.S.C. 1707 et seq.); and
            (2) is otherwise eligible, under the last sentence of 
        subparagraph (A) of section 203(c)(2) of such Act (12 U.S.C. 
        1709(c)(2)(A)), for a refund of all unearned premium charges 
        paid on the mortgage pursuant to such subparagraph, except that 
        the mortgage--
                    (A) was closed before December 8, 2004; and
                    (B) was endorsed on or after such date.
    (c) Authorization of Appropriations.--There is authorized to be 
appropriated for each fiscal year such sums as may be necessary to 
provide refunds of unearned mortgage insurance premiums pursuant to 
this section.

SEC. 18. MAXIMUM MORTGAGE AMOUNT LIMITS FOR MULTIFAMILY HOUSING.

    (a) Elevator-Type Structures.--
            (1) Amendments.--The National Housing Act is amended in 
        each of the provisions specified in paragraph (2)--
                    (A) by inserting ``with sound standards of 
                construction and design'' after ``elevator-type 
                structures'' the first place such term appears; and
                    (B) by striking ``to not to exceed'' and all that 
                follows through ``sound standards of construction and 
                design'' each place such terms appear and inserting 
                ``by not more than 50 percent of the amounts specified 
                for each unit size''.
            (2) Provisions amended.--The provisions of the National 
        Housing Act specified in this paragraph are as follows:
                    (A) Subparagraph (A) of section 207(c)(3) (12 
                U.S.C. 1713(c)(3)(A)).
                    (B) Subparagraph (A) of section 213(b)(2) (12 
                U.S.C. 1715e(b)(2)(A)).
                    (C) Subclause (I) of section 220(d)(3)(B)(iii) (12 
                U.S.C. 1715k(d)(3)(B)(iii)(I)).
                    (D) In section 221(d) (12 U.S.C. 1715l(d))--
                            (i) subclause (I) of paragraph (3)(ii); and
                            (ii) subclause (I) of paragraph (4)(ii).
                    (E) Subparagraph (A) of section 231(c)(2) (12 
                U.S.C. 1715v(c)(2)(A)).
                    (F) Subparagraph (A) of section 234(e)(3) (12 
                U.S.C. 1715y(e)(3)(A)).
    (b) Extremely High-Cost Areas.--Section 214 of the National Housing 
Act (12 U.S.C. 1715d) is amended--
            (1) in the first sentence--
                    (A) by inserting ``, or with respect to projects 
                consisting of more than four dwelling units located in 
                an extremely high-cost area as determined by the 
                Secretary'' after ``or the Virgin Islands'' the first 
                place such term appears;
                    (B) by inserting ``, or to construct projects 
                consisting of more than four dwelling units on property 
                located in an extremely high-cost area as determined by 
                the Secretary'' after ``or the Virgin Islands'' the 
                second place such term appears; and
                    (C) by inserting ``, or with respect to projects 
                consisting of more than four dwelling units located in 
                an extremely high-cost area as determined by the 
                Secretary'' after ``or the Virgin Islands'' the third 
                place such term appears;
            (2) in the second sentence--
                    (A) by inserting ``, or with respect to a project 
                consisting of more than four dwelling units located in 
                an extremely high-cost area as determined by the 
                Secretary,'' after ``or the Virgin Islands'' the first 
                place such term appears; and
                    (B) by inserting ``, or in the case of a project 
                consisting of more than four dwelling units in an 
                extremely high-cost area as determined by the 
                Secretary, in such extremely high-cost area,'' after 
                ``or the Virgin Islands'' the second place such term 
                appears; and
            (3) in the section heading, by striking ``and the virgin 
        islands'' and inserting ``the virgin islands, and extremely 
        high-cost areas''.
    (c) Effective Date.--The amendments made by this section shall 
apply to mortgages insured under title II of the National Housing Act 
after September 30, 2010.

SEC. 19. SPECIAL FORBEARANCE FOR MORTGAGORS WITH CHINESE DRYWALL.

    The provisions of Mortgagee Letter 2002-17 of the Secretary of 
Housing and Urban Development (regarding ``Special Forbearance: Program 
Changes and Updates'') relating to Type I Special Forbearance shall 
apply, until the conclusion of fiscal year 2011 and may not be revoked, 
annulled, repealed, or rescinded during such period, with respect to 
mortgagees of mortgages insured under title II of the National Housing 
Act that are secured by one- to four-family dwellings that have problem 
or damaging drywall products.

SEC. 20. MORTGAGE INSURANCE FOR CONDOMINIUMS.

    Section 203 of the National Housing Act (12 U.S.C. 1709) is amended 
by adding at the end the following new subsection:
    ``(y) Inapplicability of Environmental Review Provisions.--In 
insuring, under this section, any mortgage described in section 
201(a)(C), the Secretary shall not be subject to the conditions of, or 
review under, the National Environmental Policy Act of 1969 or any 
other provision of law that furthers the purposes of such Act.''.

SEC. 21. ENERGY EFFICIENT MORTGAGES.

    Section 106(a)(2)(C) of the Energy Policy Act of 1992 (42 U.S.C. 
12712 note) is amended--
            (1) in clause (i), by inserting ``(i)'' after ``(A)'' each 
        place such term appears; and
            (2) in clause (ii), by striking ``203(b)(2)(B)'' and 
        inserting ``203(b)(2)(A)(ii)''.
                                 <all>