[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 896 Placed on Calendar Senate (PCS)]

                                                        Calendar No. 52
111th CONGRESS
  1st Session
                                 S. 896

     To prevent mortgage foreclosures and enhance mortgage credit 
                             availability.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 24, 2009

  Mr. Dodd (for himself, Mr. Durbin, and Mr. Schumer) introduced the 
             following bill; which was read the first time

                             April 27, 2009

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
     To prevent mortgage foreclosures and enhance mortgage credit 
                             availability.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as ``Helping Families Save 
Their Homes Act of 2009''.
    (b) Table of Contents.--The table of contents of this Act is the 
following:

Sec. 1. Short title; table of contents.
              TITLE I--PREVENTION OF MORTGAGE FORECLOSURES

Sec. 101. FHA loan modification program.
Sec. 102. Mortgage modification data collecting and reporting.
        TITLE II--FORECLOSURE MITIGATION AND CREDIT AVAILABILITY

Sec. 201. Servicer safe harbor for mortgage loan modifications.
Sec. 202. Changes to HOPE for Homeowners Program.
Sec. 203. Requirements for FHA-approved mortgagees.
Sec. 204. Enhancement of liquidity and stability of insured depository 
                            institutions to ensure availability of 
                            credit and reduction of foreclosures.
Sec. 205. Application of GSE conforming loan limit to mortgages 
                            assisted with TARP funds.
Sec. 206. Mortgages on certain homes on leased land.
Sec. 207. Sense of Congress regarding mortgage revenue bond purchases.
                       TITLE III--MORTGAGE FRAUD

Sec. 301. Short title.
Sec. 302. Nationwide Mortgage Fraud Task Force.
              TITLE IV--FORECLOSURE MORATORIUM PROVISIONS

Sec. 401. Sense of the Congress on foreclosures.

              TITLE I--PREVENTION OF MORTGAGE FORECLOSURES

SEC. 101. FHA LOAN MODIFICATION PROGRAM.

    (a) In General.--Subsection (a) of section 204 of the National 
Housing Act (12 U.S.C. 1710(a)) is amended by adding at the end the 
following new paragraph:
            ``(10) Loan modification program.--
                    ``(A) Authority.--The Secretary may carry out a 
                program solely to encourage loan modifications for 
                eligible delinquent mortgages through the payment of 
                insurance benefits and assignment of the mortgage to 
                the Secretary and the subsequent modification of the 
                terms of the mortgage according to a loan modification 
                approved by the mortgagee.
                    ``(B) Payment of benefits and assignment.--Under 
                the program under this paragraph, the Secretary may pay 
                insurance benefits for a mortgage, in the amount 
                determined in accordance with paragraph (5)(A), without 
                reduction for any amounts modified, but only upon the 
                assignment, transfer, and delivery to the Secretary of 
                all rights, interest, claims, evidence, and records 
                with respect to the mortgage specified in clauses (i) 
                through (iv) of paragraph (1)(A).
                    ``(C) Disposition.--After modification of a 
                mortgage pursuant to this paragraph, the Secretary may 
                provide insurance under this title for the mortgage. 
                The Secretary may subsequently--
                            ``(i) re-assign the mortgage to the 
                        mortgagee under terms and conditions as are 
                        agreed to by the mortgagee and the Secretary;
                            ``(ii) act as a Government National 
                        Mortgage Association issuer, or contract with 
                        an entity for such purpose, in order to pool 
                        the mortgage into a Government National 
                        Mortgage Association security; or
                            ``(iii) re-sell the mortgage in accordance 
                        with any program that has been established for 
                        purchase by the Federal Government of mortgages 
                        insured under this title, and the Secretary may 
                        coordinate standards for interest rate 
                        reductions available for loan modification with 
                        interest rates established for such purchase.
                    ``(D) Loan servicing.--In carrying out the program 
                under this section, the Secretary may require the 
                existing servicer of a mortgage assigned to the 
                Secretary under the program to continue servicing the 
                mortgage as an agent of the Secretary during the period 
                that the Secretary acquires and holds the mortgage for 
                the purpose of modifying the terms of the mortgage. If 
                the mortgage is resold pursuant to subparagraph 
                (C)(iii), the Secretary may provide for the existing 
                servicer to continue to service the mortgage or may 
                engage another entity to service the mortgage.''.
    (b) Amendment to Partial Claim Authority.--Paragraph (1) of section 
230(b) of the National Housing Act (12 U.S.C. 1715u(b)(1)) is amended 
by striking ``12 of the monthly mortgage payments'' and inserting ``30 
percent of the unpaid principal balance of the mortgage''.
    (c) Implementation.--The Secretary of Housing and Urban Development 
may implement the amendments made by this section through notice or 
mortgagee letter.

SEC. 102. MORTGAGE MODIFICATION DATA COLLECTING AND REPORTING.

    (a) Reporting Requirements.--Not later than 120 days after the date 
of the enactment of this Act, and quarterly thereafter, the Comptroller 
of the Currency, in coordination with the Director of the Office of 
Thrift Supervision, shall submit a report to the Committee on Banking, 
Housing, and Urban Affairs of the Senate, the Committee on Financial 
Services of the House of Representatives, and the Joint Economic 
Committee on the volume of mortgage modifications reported to the 
Office of the Comptroller of the Currency and the Office of Thrift 
Supervision, under the mortgage metrics program of each such Office, 
during the previous quarter, including the following:
            (1) A copy of the data collection instrument currently used 
        by the Office of the Comptroller of the Currency and the Office 
        of Thrift Supervision to collect data on loan modifications.
            (2) The total number of mortgage modifications resulting in 
        each of the following:
                    (A) Additions of delinquent payments and fees to 
                loan balances.
                    (B) Interest rate reductions and freezes.
                    (C) Term extensions.
                    (D) Reductions of principal.
                    (E) Deferrals of principal.
                    (F) Combinations of modifications described in 
                subparagraph (A), (B), (C), (D), or (E).
            (3) The total number of mortgage modifications in which the 
        total monthly principal and interest payment resulted in the 
        following:
                    (A) An increase.
                    (B) Remained the same.
                    (C) Decreased less than 10 percent.
                    (D) Decreased between 10 percent and 20 percent.
                    (E) Decreased 20 percent or more.
            (4) The total number of loans that have been modified and 
        then entered into default, where the loan modification resulted 
        in--
                    (A) higher monthly payments by the homeowner;
                    (B) equivalent monthly payments by the homeowner;
                    (C) lower monthly payments by the homeowner of up 
                to 10 percent;
                    (D) lower monthly payments by the homeowner of 
                between 10 percent to 20 percent; or
                    (E) lower monthly payments by the homeowner of more 
                than 20 percent.
    (b) Data Collection.--
            (1) Required.--
                    (A) In general.--Not later than 60 days after the 
                date of the enactment of this Act, the Comptroller of 
                the Currency and the Director of the Office of Thrift 
                Supervision, shall issue mortgage modification data 
                collection and reporting requirements to institutions 
                covered under the reporting requirement of the mortgage 
                metrics program of the Comptroller or the Director.
                    (B) Inclusiveness of collections.--The requirements 
                under subparagraph (A) shall provide for the collection 
                of all mortgage modification data needed by the 
                Comptroller of the Currency and the Director of the 
                Office of Thrift Supervision to fulfill the reporting 
                requirements under subsection (a).
            (2) Report.--The Comptroller of the Currency shall report 
        all requirements established under paragraph (1) to each 
        committee receiving the report required under subsection (a).

        TITLE II--FORECLOSURE MITIGATION AND CREDIT AVAILABILITY

SEC. 201. SERVICER SAFE HARBOR FOR MORTGAGE LOAN MODIFICATIONS.

    (a) Safe Harbor.--
            (1) Loan modifications and workout plans.--Notwithstanding 
        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) Ability.--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) Criteria.--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) Applicability.--This subsection shall apply only with 
        respect to modifications, workouts, and other loss mitigation 
        plans initiated before January 1, 2012.
    (b) Reporting.--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) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (2) Securitization vehicle.--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.

SEC. 202. CHANGES TO HOPE FOR HOMEOWNERS PROGRAM.

    (a) Program Changes.--Section 257 of the National Housing Act (12 
U.S.C. 1715z-23) is amended--
            (1) in subsection (c)--
                    (A) in the heading for paragraph (1), by striking 
                ``the board'' and inserting ``secretary'';
                    (B) in paragraph (1), by striking ``Board'' 
                inserting ``Secretary, after consultation with the 
                Board,''; and
                    (C) by adding after paragraph (2) the following:
            ``(3) Duties of board.--The Board shall advise the 
        Secretary regarding the establishment and implementation of the 
        HOPE for Homeowners Program.''.
            (2) by striking ``Board'' each place such term appears in 
        subsections (e), (h)(1), (h)(3), (j), (l), (n), (s)(3), and (v) 
        and inserting ``Secretary'';
            (3) in subsection (e)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) Borrower certification.--
                    ``(A) No intentional default or false 
                information.--The mortgagor shall provide a 
                certification to the Secretary that the mortgagor has 
                not intentionally defaulted on the existing mortgage or 
                mortgages and has not knowingly, or willfully and with 
                actual knowledge, furnished material information known 
                to be false for the purpose of obtaining the eligible 
                mortgage to be insured and has not been convicted under 
                Federal or State law for fraud during the 10-year 
                period ending upon the insurance of the mortgage under 
                this section.
                    ``(B) Liability for repayment.--The mortgagor shall 
                agree in writing that the mortgagor shall be liable to 
                repay to the Secretary any direct financial benefit 
                achieved from the reduction of indebtedness on the 
                existing mortgage or mortgages on the residence 
                refinanced under this section derived from 
                misrepresentations made by the mortgagor in the 
                certifications and documentation required under this 
                paragraph, subject to the discretion of the 
                Secretary.'';
                    (B) in paragraph (4)(A), by striking ``; subject to 
                standards established by the Board under subparagraph 
                (B),'';
                    (C) in paragraph (7), by striking ``and provided 
                that'' and all that follows through ``new second lien'' 
                and inserting ``and except that the Secretary may, 
                under such terms and conditions as the Secretary may 
                establish, permit the establishment of a second lien on 
                a property under an eligible mortgage to be insured, 
                for the purpose of facilitating payment of closing or 
                refinancing costs by a State or locality using funds 
                provided under the HOME Investment Partnerships program 
                under title II of the Cranston-Gonzalez National 
                Affordable Housing Act (42 U.S.C. 12721 et seq.) or the 
                community development block grants program under title 
                I of the Housing and Community Development Act of 1974 
                (42 U.S.C. 5301 et seq.) or by a State or local housing 
                finance agency'';
                    (D) in paragraph (9)--
                            (i) by striking ``by procuring (A) an 
                        income tax return transcript of the income tax 
                        return of the mortgagor, or (B)'' and inserting 
                        ``in accordance with procedures and standards 
                        that the Secretary shall establish, which may 
                        include requiring the mortgagee to procure''; 
                        and
                            (ii) by striking ``and by any other method, 
                        in accordance with procedures and standards 
                        that the Board shall establish'';
                    (E) by striking subparagraph (10);
                    (F) in paragraph (11), by inserting before the 
                period at the end the following: ``, except that the 
                Secretary may provide exceptions to such latter 
                requirement (relating to present ownership interest) 
                for any mortgagor who has inherited a property or for 
                any mortgagor who has relocated to a new jurisdiction, 
                and is in the process of trying to sell such property 
                or has been unable to sell such property due to adverse 
                market conditions'';
                    (G) by redesignating paragraph (11) as paragraph 
                (10); and
                    (H) by adding at the end:
            ``(11) Ban on millionaires.--The mortgagor shall not have a 
        net worth, as of the date the mortgagor first applies for a 
        mortgage to be insured under the Program under this section, 
        that exceeds $1,000,000.'';
            (4) in subsection (h)(2)--
                    (A) by striking ``The Board shall prohibit the 
                Secretary from paying'' and inserting ``The Secretary 
                shall not pay''; and
                    (B) by inserting after the period at the end the 
                following: ``In implementing this provision with 
                respect to a failure by a mortgagor to make a first 
                payment, the Secretary shall establish policies and 
                timing of endorsements as consistent as is possible 
                with endorsement policies established with respect to 
                mortgages insured under section 203(b)'';
            (5) in subsection (i)--
                    (A) by inserting ``, after weighing maximization of 
                participation with consideration of collection of 
                premiums,'' after ``Secretary shall'';
                    (B) in paragraph (1), by striking ``equal to 3 
                percent'' and inserting ``not more than 2 percent''; 
                and
                    (C) in paragraph (2), by striking ``equal to 1.5 
                percent'' and inserting ``not more than 1 percent'';
            (6) in subsection (k)--
                    (A) by striking the subsection heading and 
                inserting ``Exit Fee'';
                    (B) in paragraph (1), in the matter preceding 
                subparagraph (A), by striking ``such sale or 
                refinancing'' and inserting ``the mortgage being 
                insured under this section''; and
                    (C) in paragraph (2), by striking ``and the 
                mortgagor'' and all that follows through the end and 
                inserting ``may, upon any sale or disposition of the 
                property to which the mortgage relates, be entitled to 
                up to 50 percent of appreciation, up to the appraised 
                value of the home at the time when the mortgage being 
                refinanced under this section was originally made. The 
                Secretary may share any amounts received under this 
                paragraph with the holder of the eligible mortgage 
                refinanced under this section.'';
            (7) in the heading for subsection (n), by striking ``the 
        Board'' and inserting ``Secretary'';
            (8) in subsection (p), by striking ``Under the direction of 
        the Board, the'' and inserting ``The'';
            (9) in subsection (s)--
                    (A) in the first sentence of paragraph (2), by 
                striking ``Board of Directors of'' and inserting 
                ``Advisory Board for''; and
                    (B) in paragraph (3)(A)(ii), by striking 
                ``subsection (e)(1)(B) and such other'' and inserting 
                ``such'';
            (10) in subsection (v), by inserting after the period at 
        the end the following: ``The Secretary shall conform documents, 
        forms, and procedures for mortgages insured under this section 
        to those in place for mortgages insured under section 203(b) to 
        the maximum extent possible consistent with the requirements of 
        this section.''; and
            (11) by adding at the end the following new subsections:
    ``(x) Payment to Existing Loan Servicer.--The Secretary may 
establish a payment to the servicer of the existing senior mortgage for 
every loan insured under the HOPE for Homeowners Program in an amount, 
for each such loan, that does not exceed $1,000.
    ``(y) Auctions.--The Secretary, with the concurrence of the Board, 
shall, if feasible, establish a structure and organize procedures for 
an auction to refinance eligible mortgages on a wholesale or bulk 
basis.''.
    (b) Reducing TARP Funds To Offset Costs of Program Changes.--
Paragraph (3) of section 115(a) of the Emergency Economic Stabilization 
Act of 2008 (12 U.S.C. 5225) is amended by inserting ``, as such amount 
is reduced by $2,316,000,000,'' after ``$700,000,000,000''.

SEC. 203. REQUIREMENTS FOR FHA-APPROVED MORTGAGEES.

    (a) Mortgagee Review Board.--Paragraph (2) of section 202(c) of the 
National Housing Act (12 U.S.C. 1708(c)) is amended--
            (1) in subparagraph (E), by inserting ``and'' after the 
        semicolon;
            (2) in subparagraph (F), by striking ``; and'' and 
        inserting a period; and
            (3) by striking subparagraph (G).
    (b) Limitations on Participation and Mortgagee Approval and Use of 
Name.--Section 202 of the National Housing Act (12 U.S.C. 1708) is 
amended--
            (1) by redesignating subsections (d), (e), and (f) as 
        subsections (e), (f), and (g), respectively;
            (2) by inserting after subsection (c) the following new 
        subsection:
    ``(d) Limitations on Participation in Origination and Mortgagee 
Approval.--
            ``(1) Requirement.--Any person or entity that is not 
        approved by the Secretary to serve as a mortgagee, as such term 
        is defined in subsection (c)(7), shall not participate in the 
        origination of an FHA-insured loan except as authorized by the 
        Secretary.
            ``(2) Eligibility for approval.--In order to be eligible 
        for approval by the Secretary, an applicant mortgagee shall not 
        be, and shall not have any officer, partner, director, 
        principal, manager, supervisor, loan processor, loan 
        underwriter, or loan originator of the applicant mortgagee who 
        is--
                    ``(A) currently suspended, debarred, under a 
                limited denial of participation (LDP), or otherwise 
                restricted under part 24 or 25 of title 24 of the Code 
                of Federal Regulations, or any successor regulations to 
                such parts, or under similar provisions of any other 
                Federal agency;
                    ``(B) under indictment for, or has been convicted 
                of, an offense that reflects adversely upon the 
                applicant's integrity, competence or fitness to meet 
                the responsibilities of an approved mortgagee;
                    ``(C) subject to unresolved findings contained in a 
                Department of Housing and Urban Development or other 
                governmental audit, investigation, or review;
                    ``(D) engaged in business practices that do not 
                conform to generally accepted practices of prudent 
                mortgagees or that demonstrate irresponsibility;
                    ``(E) convicted of, or who has pled guilty or nolo 
                contendre to, a felony related to participation in the 
                real estate or mortgage loan industry--
                            ``(i) during the 7-year period preceding 
                        the date of the application for licensing and 
                        registration; or
                            ``(ii) at any time preceding such date of 
                        application, if such felony involved an act of 
                        fraud, dishonesty, or a breach of trust, or 
                        money laundering;
                    ``(F) in violation of provisions of the S.A.F.E. 
                Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.) 
                or any applicable provision of State law; or
                    ``(G) in violation of any other requirement as 
                established by the Secretary.
            ``(3) Rulemaking and implementation.--The Secretary shall 
        conduct a rulemaking to carry out this subsection. The 
        Secretary shall implement this subsection not later than the 
        expiration of the 60-day period beginning upon the date of the 
        enactment of this subsection by notice, mortgagee letter, or 
        interim final regulations, which shall take effect upon 
        issuance.''; and
            (3) by adding at the end the following new subsection:
    ``(h) Use of Name.--The Secretary shall, by regulation, require 
each mortgagee approved by the Secretary for participation in the FHA 
mortgage insurance programs of the Secretary--
            ``(1) to use the business name of the mortgagee that is 
        registered with the Secretary in connection with such approval 
        in all advertisements and promotional materials, as such terms 
        are defined by the Secretary, relating to the business of such 
        mortgagee in such mortgage insurance programs; and
            ``(2) to maintain copies of all such advertisements and 
        promotional materials, in such form and for such period as the 
        Secretary requires.''.
    (c) Change of Status.--The National Housing Act is amended by 
striking section 532 (12 U.S.C. 1735f-10) and inserting the following 
new section:

``SEC. 532. CHANGE OF MORTGAGEE STATUS.

    ``(a) Notification.--Upon the occurrence of any action described in 
subsection (b), an approved mortgagee shall immediately submit to the 
Secretary, in writing, notification of such occurrence.
    ``(b) Actions.--The actions described in this subsection are as 
follows:
            ``(1) The debarment, suspension of a Limited Denial of 
        Participation (LDP), or application of other sanctions, fines, 
        or penalties applied to the mortgagee or to any officer, 
        partner, director, principal, manager, supervisor, loan 
        processor, loan underwriter, or loan originator of the 
        mortgagee pursuant to applicable provisions of State or Federal 
        law.
            ``(2) The revocation of a State-issued mortgage loan 
        originator license issued pursuant to the S.A.F.E. Mortgage 
        Licensing Act of 2008 (12 U.S.C. 5101 et seq.) or any other 
        similar declaration of ineligibility pursuant to State law.''.
    (d) Civil Money Penalties.--Section 536 of the National Housing Act 
(12 U.S.C. 1735f-14) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) in the matter preceding subparagraph 
                        (A), by inserting ``or any of its owners, 
                        officers, or directors'' after ``mortgagee or 
                        lender'';
                            (ii) in subparagraph (H), by striking 
                        ``title I'' and all that follows through ``Act 
                        of 1989)'' and inserting ``title I or II''; and
                            (iii) by inserting after subparagraph (J) 
                        the following:
                    ``(K) Violation of section 202(d) of this Act (12 
                U.S.C. 1708(d)).''; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (B), by striking ``or'' 
                        at the end;
                            (ii) in subparagraph (C), by striking the 
                        period at the end and inserting ``; or''; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(D) causing or participating in any of the 
                violations set forth in paragraph (1) of this 
                subsection.''; and
            (2) in subsection (g), by striking ``The term'' and all 
        that follows through the end of the sentence and inserting 
        ``For purposes of this section, a person acts knowingly when a 
        person has actual knowledge of acts or should have known of the 
        acts.''.
    (e) Expanded Review of FHA Mortgagee Applicants and Newly Approved 
Mortgagees.--Not later than the expiration of the 3-month period 
beginning upon the date of the enactment of this Act, the Secretary of 
Housing and Urban Development shall--
            (1) expand the existing process for reviewing new 
        applicants for approval for participation in the mortgage 
        insurance programs of the Secretary for mortgages on 1- to 4-
        family residences for the purpose of identifying applicants who 
        represent a high risk to the Mutual Mortgage Insurance Fund; 
        and
            (2) implement procedures that, for mortgagees approved 
        during the 12-month period ending upon such date of enactment--
                    (A) expand the number of mortgages originated by 
                such mortgagees that are reviewed for compliance with 
                applicable laws, regulations, and policies; and
                    (B) include a process for random reviews of such 
                mortgagees and a process for reviews that is based on 
                volume of mortgages originated by such mortgagees.

SEC. 204. ENHANCEMENT OF LIQUIDITY AND STABILITY OF INSURED DEPOSITORY 
              INSTITUTIONS TO ENSURE AVAILABILITY OF CREDIT AND 
              REDUCTION OF FORECLOSURES.

    (a) Permanent Increase in Deposit Insurance.--
            (1) Amendments to federal deposit insurance act.--Effective 
        upon the date of the enactment of this Act, section 11(a) of 
        the Federal Deposit Insurance Act (12 U.S.C. 1821(a)) is 
        amended--
                    (A) in paragraph (1)(E), by striking ``$100,000'' 
                and inserting ``$250,000'';
                    (B) in paragraph (1)(F)(i), by striking ``2010'' 
                and inserting ``2015'';
                    (C) in subclause (I) of paragraph (1)(F)(i), by 
                striking ``$100,000'' and inserting ``$250,000'';
                    (D) in subclause (II) of paragraph (1)(F)(i), by 
                striking ``the calendar year preceding the date this 
                subparagraph takes effect under the Federal Deposit 
                Insurance Reform Act of 2005'' and inserting ``calendar 
                year 2008''; and
                    (E) in paragraph (3)(A), by striking ``, except 
                that $250,000 shall be substituted for $100,000 
                wherever such term appears in such paragraph''.
            (2) Amendment to federal credit union act.--Section 207(k) 
        of the Federal Credit Union Act (12 U.S.C. 1787(k)) is 
        amended--
                    (A) in paragraph (3)--
                            (i) by striking the opening quotation mark 
                        before ``$250,000'';
                            (ii) by striking ``, except that $250,000 
                        shall be substituted for $100,000 wherever such 
                        term appears in such section''; and
                            (iii) by striking the closing quotation 
                        mark after the closing parenthesis; and
                    (B) in paragraph (5), by striking ``$100,000'' and 
                inserting ``$250,000''.
            (3) Repeal of eesa provision.--Section 136 of the Emergency 
        Economic Stabilization Act (12 U.S.C. 5241) is hereby repealed.
    (b) Extension of Restoration Plan Period.--Section 7(b)(3)(E)(ii) 
of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(3)(E)(ii)) is 
amended by striking ``5-year period'' and inserting ``8-year period''.
    (c) FDIC and NCUA Borrowing Authority.--
            (1) FDIC.--Section 14(a) of the Federal Deposit Insurance 
        Act (12 U.S.C. 1824(a)) is amended by striking 
        ``$30,000,000,000'' and inserting ``$100,000,000,000''.
            (2) NCUA.--Section 203(d)(1) of the Federal Credit Union 
        Act (12 U.S.C. 1783(d)(1)) is amended by striking 
        ``$100,000,000'' and inserting ``$6,000,000,000''.
    (d) Expanding Systemic Risk Special Assessments.--Section 
13(c)(4)(G)(ii) of the Federal Deposit Insurance Act (12 U.S.C. 
1823(c)(4)(G)(ii)) is amended to read as follows:
                            ``(ii) Repayment of loss.--
                                    ``(I) In general.--The Corporation 
                                shall recover the loss to the Deposit 
                                Insurance Fund arising from any action 
                                taken or assistance provided with 
                                respect to an insured depository 
                                institution under clause (i) from 1 or 
                                more special assessments on insured 
                                depository institutions, depository 
                                institution holding companies (with the 
                                concurrence of the Secretary of the 
                                Treasury with respect to holding 
                                companies), or both, as the Corporation 
                                determines to be appropriate.
                                    ``(II) Treatment of depository 
                                institution holding companies.--For 
                                purposes of this clause, sections 
                                7(c)(2) and 18(h) shall apply to 
                                depository institution holding 
                                companies as if they were insured 
                                depository institutions.
                                    ``(III) Regulations.--The 
                                Corporation shall prescribe such 
                                regulations as it deems necessary to 
                                implement this clause. In prescribing 
                                such regulations, defining terms, and 
                                setting the appropriate assessment rate 
                                or rates, the Corporation shall 
                                establish rates sufficient to cover the 
                                losses incurred as a result of the 
                                actions of the Corporation under clause 
                                (i) and shall consider: the types of 
                                entities that benefit from any action 
                                taken or assistance provided under this 
                                subparagraph; economic conditions, the 
                                effects on the industry, and such other 
                                factors as the Corporation deems 
                                appropriate and relevant to the action 
                                taken or the assistance provided. Any 
                                funds so collected that exceed actual 
                                losses shall be placed in the Deposit 
                                Insurance Fund.''.
    (e) Establishment of a National Credit Union Share Insurance Fund 
Restoration Plan Period.--Section 202(c)(2) of the Federal Credit Union 
Act (12 U.S.C. 1782(c)(2)) is amended by adding at the end the 
following new subparagraph:
                    ``(D) Fund restoration plans.--
                            ``(i) In general.--Whenever--
                                    ``(I) the Board projects that the 
                                equity ratio of the Fund will, within 6 
                                months of such determination, fall 
                                below the minimum amount specified in 
                                subparagraph (C) for the designated 
                                equity ratio; or
                                    ``(II) the equity ratio of the Fund 
                                actually falls below the minimum amount 
                                specified in subparagraph (C) for the 
                                equity ratio without any determination 
                                under sub-clause (I) having been made,
                        the Board shall establish and implement a Share 
                        Insurance Fund restoration plan within 90 days 
                        that meets the requirements of clause (ii) and 
                        such other conditions as the Board determines 
                        to be appropriate.
                            ``(ii) Requirements of restoration plan.--A 
                        Share Insurance Fund restoration plan meets the 
                        requirements of this clause if the plan 
                        provides that the equity ratio of the Fund will 
                        meet or exceed the minimum amount specified in 
                        subparagraph (C) for the designated equity 
                        ratio before the end of the 5-year period 
                        beginning upon the implementation of the plan 
                        (or such longer period as the Board may 
                        determine to be necessary due to extraordinary 
                        circumstances).
                            ``(iii) Transparency.--Not more than 30 
                        days after the Board establishes and implements 
                        a restoration plan under clause (i), the Board 
                        shall publish in the Federal Register a 
                        detailed analysis of the factors considered and 
                        the basis for the actions taken with regard to 
                        the plan.''.

SEC. 205. APPLICATION OF GSE CONFORMING LOAN LIMIT TO MORTGAGES 
              ASSISTED WITH TARP FUNDS.

    In making any assistance available to prevent and mitigate 
foreclosures on residential properties, including any assistance for 
mortgage modifications, using any amounts made available to the 
Secretary of the Treasury under title I of the Emergency Economic 
Stabilization Act of 2008, the Secretary shall provide that the 
limitation on the maximum original principal obligation of a mortgage 
that may be modified, refinanced, made, guaranteed, insured, or 
otherwise assisted, using such amounts shall not be less than the 
dollar amount limitation on the maximum original principal obligation 
of a mortgage that may be purchased by the Federal Home Loan Mortgage 
Corporation that is in effect, at the time that the mortgage is 
modified, refinanced, made, guaranteed, insured, or otherwise assisted 
using such amounts, for the area in which the property involved in the 
transaction is located.

SEC. 206. MORTGAGES ON CERTAIN HOMES ON LEASED LAND.

    Section 255(b)(4) of the National Housing Act (12 U.S.C. 1715z-
20(b)(4)) is amended by striking subparagraph (B) and inserting:
                    ``(B) under a lease that has a term that ends no 
                earlier than the minimum number of years, as specified 
                by the Secretary, beyond the actuarial life expectancy 
                of the mortgagor or comortgagor, whichever is the later 
                date.''.

SEC. 207. SENSE OF CONGRESS REGARDING MORTGAGE REVENUE BOND PURCHASES.

    It is the sense of the Congress that the Secretary of the Treasury 
should use amounts made available in this Act to purchase mortgage 
revenue bonds for single-family housing issued through State housing 
finance agencies and through units of local government and agencies 
thereof.

                       TITLE III--MORTGAGE FRAUD

SEC. 301. SHORT TITLE.

    This title may be cited as the ``Nationwide Mortgage Fraud Task 
Force Act of 2009''.

SEC. 302. NATIONWIDE MORTGAGE FRAUD TASK FORCE.

    (a) Establishment.--There is established in the Department of 
Justice the Nationwide Mortgage Fraud Task Force (hereinafter referred 
to in this section as the ``Task Force'') to address mortgage fraud in 
the United States.
    (b) Support.--The Attorney General shall provide the Task Force 
with the appropriate staff, administrative support, and other resources 
necessary to carry out the duties of the Task Force.
    (c) Executive Director.--The Attorney General shall appoint one 
staff member provided to the Task Force to be the Executive Director of 
the Task Force and such Executive Director shall ensure that the duties 
of the Task Force are carried out.
    (d) Branches.--The Task Force shall establish, oversee, and direct 
branches in each of the 10 States determined by the Attorney General to 
have the highest concentration of mortgage fraud.
    (e) Mandatory Functions.--The Task Force, including the branches of 
the Task Force established under subsection (d), shall--
            (1) establish coordinating entities, and solicit the 
        voluntary participation of Federal, State, and local law 
        enforcement and prosecutorial agencies in such entities, to 
        organize initiatives to address mortgage fraud, including 
        initiatives to enforce State mortgage fraud laws and other 
        related Federal and State laws;
            (2) provide training to Federal, State, and local law 
        enforcement and prosecutorial agencies with respect to mortgage 
        fraud, including related Federal and State laws;
            (3) collect and disseminate data with respect to mortgage 
        fraud, including Federal, State, and local data relating to 
        mortgage fraud investigations and prosecutions; and
            (4) perform other functions determined by the Attorney 
        General to enhance the detection of, prevention of, and 
        response to mortgage fraud in the United States.
    (f) Optional Functions.--The Task Force, including the branches of 
the Task Force established under subsection (d), may--
            (1) initiate and coordinate Federal mortgage fraud 
        investigations and, through the coordinating entities 
        established under subsection (e), State and local mortgage 
        fraud investigations;
            (2) establish a toll-free hotline for--
                    (A) reporting mortgage fraud;
                    (B) providing the public with access to information 
                and resources with respect to mortgage fraud; and
                    (C) directing reports of mortgage fraud to the 
                appropriate Federal, State, and local law enforcement 
                and prosecutorial agency, including to the appropriate 
                branch of the Task Force established under subsection 
                (d);
            (3) create a database with respect to suspensions and 
        revocations of mortgage industry licenses and certifications to 
        facilitate the sharing of such information by States;
            (4) make recommendations with respect to the need for and 
        resources available to provide the equipment and training 
        necessary for the Task Force to combat mortgage fraud; and
            (5) propose legislation to Federal, State, and local 
        legislative bodies with respect to the elimination and 
        prevention of mortgage fraud, including measures to address 
        mortgage loan procedures and property appraiser practices that 
        provide opportunities for mortgage fraud.
    (g) Definition.--In this section, the term ``mortgage fraud'' means 
a material misstatement, misrepresentation, or omission relating to the 
property or potential mortgage relied on by an underwriter or lender to 
fund, purchase, or insure a loan.

              TITLE IV--FORECLOSURE MORATORIUM PROVISIONS

SEC. 401. SENSE OF THE CONGRESS ON FORECLOSURES.

    (a) In General.--It is the sense of the Congress that mortgage 
holders, institutions, and mortgage servicers should not initiate a 
foreclosure proceeding or a foreclosure sale on any homeowner until the 
foreclosure mitigation provisions, like the Hope for Homeowners 
program, as required under title II, and the President's ``Homeowner 
Affordability and Stability Plan'' have been implemented and determined 
to be operational by the Secretary of Housing and Urban Development and 
the Secretary of the Treasury.
    (b) Scope of Moratorium.--The foreclosure moratorium referred to in 
subsection (a) should apply only for first mortgages secured by the 
owner's principal dwelling.
    (c) FHA-Regulated Loan Modification Agreements.--If a mortgage 
holder, institution, or mortgage servicer to which subsection (a) 
applies reaches a loan modification agreement with a homeowner under 
the auspices of the Federal Housing Administration before any plan 
referred to in such subsection takes effect, subsection (a) shall cease 
to apply to such institution as of the effective date of the loan 
modification agreement.
    (d) Duty of Consumer to Maintain Property.--Any homeowner for whose 
benefit any foreclosure proceeding or sale is barred under subsection 
(a) from being instituted, continued , or consummated with respect to 
any homeowner mortgage should not, with respect to any property 
securing such mortgage, destroy, damage, or impair such property, allow 
the property to deteriorate, or commit waste on the property.
    (e) Duty of Consumer to Respond to Reasonable Inquiries.--Any 
homeowner for whose benefit any foreclosure proceeding or sale is 
barred under subsection (a) from being instituted, continued, or 
consummated with respect to any homeowner mortgage should respond to 
reasonable inquiries from a creditor or servicer during the period 
during which such foreclosure proceeding or sale is barred.
                                                        Calendar No. 52

111th CONGRESS

  1st Session

                                 S. 896

_______________________________________________________________________

                                 A BILL

     To prevent mortgage foreclosures and enhance mortgage credit 
                             availability.

_______________________________________________________________________

                             April 27, 2009

            Read the second time and placed on the calendar