[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