1.Short title and table of
contents
(a)This Act may be cited
as the Secondary Market Facility for
Residential Mortgages Act of 2011
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Purpose.
Sec. 3. Definitions.
Title I—Secondary Market Facility for Residential
Mortgages
Sec. 101. Establishment of Secondary Market Facility for
Residential Mortgages.
Sec. 102. Limitations on mortgage purchases.
Sec. 103. Reduction of market share.
Sec. 104. Capital standards.
Sec. 105. Guarantee fees.
Sec. 106. Federal insurance backstop.
Sec. 107. Deficit reduction.
Sec. 108. Portfolio reduction.
Sec. 109. Initial standards.
Title II—Ending the conservatorships of Fannie Mae and Freddie
Mac
Sec. 201. Treasury plan.
Sec. 202. Implementation of plan.
Sec. 203. Repeal of charter Acts.
Title III—Federal Housing Finance Agency
Sec. 301. Establishment of Federal Housing Finance Agency
Board.
Sec. 302. Supervision and regulation of Facility by
FHFA.
Sec. 303. Conforming amendments.
2.The purpose of this Act is to establish a
Federal secondary market facility for residential mortgages, to provide that
the operations thereof shall be financed by private capital, and to authorize
such facility to—
(1)provide stability
in the secondary market for residential mortgages;
(2)respond
appropriately to the private capital market;
(3)maintain the
secondary market for residential mortgages, including the TBA
(to-be-announced) market;
(4)improve the distribution of investment
capital available for residential mortgage financing and as a result facilitate
access to mortgage credit to qualified borrowers throughout the United States
(including in central cities, rural areas, high-cost areas, and underserved
areas); and
(5)manage and liquidate the mortgage
portfolios of Fannie Mae and Freddie Mac in an orderly manner, in a way that
contributes to the stability of the housing market and with minimum loss and
maximum profit to the Federal Government.
3.For purposes of this Act, the following
definitions shall apply:
(1)The term approved seller means a seller of a
mortgage who has been approved by the Facility in accordance with the standards
established by the FHFA Board pursuant to section 102(j).
(2)The term conservatorship
means, with respect to an enterprise, the conservatorship of the enterprise
established pursuant to section 1367 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4617) and in effect on
the date of the enactment of this Act.
(3)The
term enterprise means—
(A)the Federal
National Mortgage Association; and
(B)the Federal Home
Loan Mortgage Corporation.
(4)The
term Facility means the Secondary Market Facility for Residential
Mortgages established under section 101 of this Act.
(5)Facility-affiliated
partyThe term Facility-affiliated party
means—
(A)any director, officer, or employee of, or
agent for, the Facility;
(B)any affiliate,
consultant, or joint venture partner of the Facility, and any other person, as
determined by the FHFA Board (by regulation or on a case-by-case basis) that
participates in the conduct of the affairs of the Facility; and
(C)any independent
contractor for the Facility (including any attorney, appraiser, or accountant),
if—
(i)the
independent contractor knowingly or recklessly participates in—
(I)any violation of
any law or regulation;
(II)any breach of
fiduciary duty; or
(III)any unsafe or
unsound practice; and
(ii)such violation,
breach, or practice caused, or is likely to cause, more than a minimal
financial loss to, or a significant adverse effect on, the Facility.
(6)The term Facility Board means the Board of
Directors of the Secondary Market Facility for Residential Mortgages,
established under section 101.
(7)The term FHFA
Board means the Federal Housing Finance Agency Board established under
section 1312 of the Federal Housing Enterprises Financial Safety and Soundness
Act of 1992, as amended by section 301 of this Act.
(8)The term residential mortgage means a
mortgage on single-family housing or multifamily housing.
(9)The
term Secretary means the Secretary of the Treasury.
(10)The term single-family housing means a
residence consisting of 1 to 4 dwelling units.
(11)The term multifamily housing means a
residence consisting of more than 4 dwelling units.
<enum>I</enum><header>Secondary Market
Facility for Residential Mortgages</header>
<section id="H03198F2C06ED488D901BF06C62D76183"><enum>101.</enum><header>Establishment
of Secondary Market Facility for Residential Mortgages</header>
<subsection id="H41422D27C0484D718A6D74EA8E3E8F51"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">There is hereby established a Secondary
Market Facility for Residential Mortgages, which shall be a body corporate
without capital stock.</text>
</subsection><subsection id="HDBEBFFAEA3FE43038EE5AE32E909ADF8"><enum>(b)</enum><header>Purpose</header><text>The
purpose of the Facility shall be to ensure that capital for residential
mortgages is available to qualified homebuyers throughout the United States,
without regard to region, area, or other geographic location.</text>
</subsection><subsection id="H1818227940454907BA02A2AE26E8794C"><enum>(c)</enum><header>Federal
status</header><text display-inline="yes-display-inline">The Facility shall be
an instrumentality of the Federal Government.</text>
</subsection><subsection id="H0FD4B7E47BBF441E918AE9D684DA972E"><enum>(d)</enum><header>Board of
Directors</header>
<paragraph id="HF29140627F084675A19F42437F3FDA45"><enum>(1)</enum><header>Establishment;
appointment</header><text display-inline="yes-display-inline">The Facility
shall be under the direction of a Board of Directors, which shall consist of 5
members who shall be appointed by the President, and shall not be officers or
employees of the Federal Government. The initial members of the Facility Board
shall be appointed not later than the expiration of the 6-month period
beginning on the date of the enactment of this Act.</text>
</paragraph><paragraph id="H98E604E5A5EB4740A71710F49C45A395"><enum>(2)</enum><header>Qualifications</header><text>Of
the members appointed to the Facility Board—</text>
<subparagraph id="H77FF5E2B20004F11B0F7816868A95501"><enum>(A)</enum><text>3 members shall
possess extensive experience and expertise in financial management or
oversight, capital markets (including debt markets), the secondary mortgage
market, and mortgage-backed securities; and</text>
</subparagraph><subparagraph id="H34BB7F799F67473A98FDF9D4A10A1CB6"><enum>(B)</enum><text display-inline="yes-display-inline">2 members shall possess extensive
experience and expertise in mortgage finance (including single-family and
multifamily housing mortgage finance and with credit unions and small
institutions).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H6D1C2D6EC2E84346A91FB21D1FC4A14A"><enum>(3)</enum><header>Political
affiliation</header><text display-inline="yes-display-inline">Not more than
three members of the Facility Board may be members of the same political
party.</text>
</paragraph><paragraph id="H5A71C3CBE4FC47349E2936E32CCC71DE"><enum>(4)</enum><header>Term;
removal</header><text display-inline="yes-display-inline">Each member of the
Facility Board shall be appointed for a term of 5 years, except that any member
may be removed from office by the President for good cause.</text>
</paragraph><paragraph id="H59D5E98E17144DDA8D26C98D82649E52"><enum>(5)</enum><header>Chairperson</header><text display-inline="yes-display-inline">The Chairperson of the Facility Board shall
be designated by the President at the time of appointment. The Chairperson
shall designate another member to serve as Acting Chairperson during the
absence or disability of the Chairperson.</text>
</paragraph><paragraph id="H75431037E31240EFB5243BFD45AF02C2"><enum>(6)</enum><header>Vacancies</header><text>A
member of the Facility Board appointed to fill a vacancy occurring before the
expiration of the term for which the member’s predecessor was appointed shall
be appointed only for the remainder of that term.</text>
</paragraph><paragraph id="HDF1D5F4E4E154451BE00EE5DE16D604A"><enum>(7)</enum><header>Continuation of
membership</header><text display-inline="yes-display-inline">A member of the
Facility Board may serve after the expiration of the member’s term until a
successor has been appointed.</text>
</paragraph></subsection><subsection id="H63912635E0984327BA0246CD8CBFB493"><enum>(e)</enum><header>Mortgage-Related
activities</header><text>The business of the Facility shall be limited to the
following functions, and such activities as may be incident to such
functions:</text>
<paragraph id="HDA26A0F2BB2C4A25B2B9A52EB8CD8107"><enum>(1)</enum><header>Borrowing</header><text display-inline="yes-display-inline">Borrowing, giving security, paying interest
and other return, and issuing notes, debentures, bonds, and other obligations
and securities to fund the purchase of residential mortgages, and to achieve
initial capitalization levels as required by the FHFA Board.</text>
</paragraph><paragraph commented="no" id="H6A19B68528204FD385AB608C7CD56BFA"><enum>(2)</enum><header>Single-family
mortgage purchase</header><text>The purchase of residential mortgages on
single-family housing that are originated by approved sellers pursuant to
section 102(j).</text>
</paragraph><paragraph id="HCDD3DEA67DAE4ECF9927714604FD8973"><enum>(3)</enum><header>Multifamily
mortgage purchase</header><text display-inline="yes-display-inline">The
purchase of residential mortgages on multifamily housing that are originated by
approved sellers pursuant to section 102(j).</text>
</paragraph><paragraph id="HD64013D00B5E4BD6A710AEE4C10729BF"><enum>(4)</enum><header>Maintenance of
TBA market</header><text>Maintaining the <term>to-be-announced</term> market
for securities based on or backed by residential mortgages on single-family or
multifamily housing.</text>
</paragraph><paragraph id="H7729CE27D711490B9A5366832B2D4A53"><enum>(5)</enum><header>Mortgage-backed
securities</header><text display-inline="yes-display-inline">Issuing, and
guaranteeing timely payment of principal and interest on, securities and other
obligations based on or backed by a pool of residential mortgages purchased by
the Facility, whose quality and characteristics are interchangeable with
securities issued by the enterprises before the date of the enactment of this
Act, including applicable rules related to the calculation of net capital
requirements.</text>
</paragraph><paragraph id="HBF3D5BB04B4D41EAAD71DCB0E2AF3C70"><enum>(6)</enum><header>Collection of
fees</header><text display-inline="yes-display-inline">The collection of
guarantee fees established under section 105 in connection with mortgage
purchases and reinsurance fees established under section 106(a).</text>
</paragraph><paragraph id="HCD43E0316BF74D3CA6B3C8C59D9E55FD"><enum>(7)</enum><header>Risk
management</header><text display-inline="yes-display-inline">The management of
interest rate risk associated with operations of the Facility.</text>
</paragraph></subsection><subsection commented="no" id="H94D8E53D96264895BEFB326191E9034D"><enum>(f)</enum><header>Prohibition on
mortgage origination</header><text>The Facility shall not engage in mortgage
origination.</text>
</subsection><subsection id="HF3FCAD54DBD849858D731383E770774F"><enum>(g)</enum><header>Self-Supporting</header><text>The
operations of the Facility shall be funded only by income derived from its
operations, after obligations for capital reserves in accordance with section
104 and for the Reinsurance Fund under section 106(b) are met.</text>
</subsection><subsection id="H6D6BC2DF7413412D9BD2BCC6D6A692DF"><enum>(h)</enum><header>Equal access to
products</header><text>The FHFA Board shall, by regulation, require that the
Facility operate to carry out the purposes under subsection (b) in a manner
that provides equal access at all times, by all eligible or qualified and
approved residential mortgage lenders, and all markets, to products of the
Facility.</text>
</subsection><subsection id="H5C409604EA124A5899AC1D00B8EB8AD4"><enum>(i)</enum><header>Personnel</header><text>The
Facility Board may fix the number and basic pay of, and appoint and direct, all
employees of the Facility without regard to the provisions of title 5, United
States Code.</text>
</subsection><subsection id="H4D5724BEA53D4EBBAA4DC232C711C3FD"><enum>(j)</enum><header>Leasing
authority</header><text display-inline="yes-display-inline">For the purpose of
mitigating losses to the taxpayer and stabilizing home prices, the Facility may
market for rental any real-estate owned properties and assets of the
enterprises that are transferred to the Facility pursuant to section 201(b) and
enter into such lease agreements with lessees as the Facility Board determines
appropriate, prior to sale of such properties and assets, except that any such
lease agreement shall terminate before the expiration of the 5-year period
beginning upon the establishment of the Facility.</text>
</subsection><subsection commented="no" id="HCFFBB0475AFA42F8BF5AC5BD2704AB1B"><enum>(k)</enum><header>Budgets; audits;
management reports; obligations</header><text>The Facility shall be considered
a wholly owned Government corporation for purposes of chapter 91 of title 31,
United States Code, but not including section 9108 of such chapter.</text>
</subsection><subsection id="H3F35A1E2198140CD861326400684ADFD"><enum>(l)</enum><header>General
powers</header><text>The Facility may—</text>
<paragraph id="HAF98290F43244CB3A57ABD3686737FC2"><enum>(1)</enum><text>adopt, amend, and
repeal bylaws;</text>
</paragraph><paragraph id="H3C96CFCE342D424687445A388086A826"><enum>(2)</enum><text>adopt and use a
corporate seal;</text>
</paragraph><paragraph id="HBDB28DCDEDC546288ABCA8F671EA432D"><enum>(3)</enum><text display-inline="yes-display-inline">enter into contracts, incur liabilities,
make guarantees, borrow money, issue notes, bonds, and other
obligations;</text>
</paragraph><paragraph id="H2FE8E788FD7B409F9D50ECB5A37CDB6E"><enum>(4)</enum><text>sue or be sued in
its own capacity; and</text>
</paragraph><paragraph id="HDD5D16CD7B394E1682D22B0300E64446"><enum>(5)</enum><text>purchase, receive,
hold, and use real and personal property and other assets necessary for the
conduct of its operations.</text>
</paragraph></subsection></section><section id="H949327822339498F871EE6FBB8A31B9F"><enum>102.</enum><header>Limitations on
mortgage purchases</header>
<subsection id="H44201A3A23534AEF97F6AFBF344B3C4A"><enum>(a)</enum><header>Safe and sound
mortgages</header>
<paragraph id="HF63E00A2472E4FE3BAAE5B7479ACDC59"><enum>(1)</enum><header>Limitation on
Facility purchases</header><text display-inline="yes-display-inline">To limit
the risk assumed by the Facility, the FHFA Board shall, by regulation, limit
the residential mortgages that may be purchased by the Facility to safe and
sound mortgages, as such term is defined pursuant to paragraph (2), within such
mortgage product types and classifications as are approved in advance by the
FHFA Board pursuant to paragraph (3).</text>
</paragraph><paragraph id="H59D451C47B2947B286A918384D8715D7"><enum>(2)</enum><header>Definition</header><text display-inline="yes-display-inline">The FHFA Board shall, by regulation, define
the term <term>safe and sound residential mortgages</term> for purposes of this
subsection, which shall—</text>
<subparagraph id="HC5646FC21B334AF18137D9873250EB6B"><enum>(A)</enum><text>be established by
the FHFA Board;</text>
</subparagraph><subparagraph id="H2F456697F5B5459A87B4349BF87E80A8"><enum>(B)</enum><text display-inline="yes-display-inline">be limited to mortgages that are of a
quality, type, and class determined by the FHFA Board to be appropriate to
provide adequate liquidity in the housing finance markets and that serve a
range of residential mortgagors and residential housing markets, which shall
include—</text>
<clause id="H2284374FEDD74CCE8736B06AF00AF730"><enum>(i)</enum><text>mortgages having a
term to maturity of 30 years or less and a fixed rate of interest over the
entire term of mortgage;</text>
</clause><clause id="H13026034DF9D4CF38DA987C7CED2121E"><enum>(ii)</enum><text>mortgages for
single-family housing and mortgages for multifamily housing;</text>
</clause><clause id="H2D1B73E069CA4020B17369F1EE98D388"><enum>(iii)</enum><text>programs for
whole loans and certificates; and</text>
</clause><clause id="H303439266A0B4A5F875A90BACEAE8406"><enum>(iv)</enum><text display-inline="yes-display-inline">other mortgages that are not insured under
the National Housing Act and not securitized through securities guaranteed by
the Government National Mortgage Association;</text>
</clause></subparagraph><subparagraph id="H05CBC5D1FF1E4902946E1827DE80A87F"><enum>(C)</enum><text>incorporate—</text>
<clause id="H88328C08F9D248B0AA6470AFFF829B1E"><enum>(i)</enum><text>the
outstanding balance requirements for single-family mortgages under subsection
(b) of this section;</text>
</clause><clause id="HD70F7359EFE34E3A96B8972D879BB263"><enum>(ii)</enum><text>the
conforming loan limits for single-family mortgages under subsection (c) of this
section;</text>
</clause><clause id="HDD0DA934E184429785AF3089DE41B794"><enum>(iii)</enum><text>the downpayment
requirements for single-family mortgages under subsection (d) of this
section;</text>
</clause><clause id="H587CAF2EBB0744D7B37CF67C82444B36"><enum>(iv)</enum><text>the
requirements for adjustable rate mortgages under subsection (e) of this
section;</text>
</clause><clause id="HBFA85BAE7381412A924162A3C79CC1B8"><enum>(v)</enum><text>the
representation and warranty requirements under subsection (f) of this
section;</text>
</clause><clause id="H9DDC26A9F42844C59887809D54F3408B"><enum>(vi)</enum><text>the
underwriting standards under subsection (g) of this section; and</text>
</clause><clause id="H69DE0D6B88B84901A4D602A27D0A0F07"><enum>(vii)</enum><text>the property
valuation standards under subsection (h) of this section.</text>
</clause></subparagraph></paragraph><paragraph id="HCA67A58738E846909A3E9C60AE46DE6E"><enum>(3)</enum><header>Product
approval</header><text>The FHFA Board shall require the Facility to obtain the
approval of the FHFA Board for any product of the Facility before initially
offering the product. The FHFA Board shall establish standards for approval of
products, which shall provide for conditional approval and procedures for
submission of requests for such approval.</text>
</paragraph></subsection><subsection id="H8A9143C7D19444BDA29E6AD17C78B4B6"><enum>(b)</enum><header>Outstanding
balance requirements for single-Family mortgages</header><text display-inline="yes-display-inline">The regulations of the FHFA Board pursuant
to subsection (a) shall ensure that a mortgage on single-family housing shall
not be considered a safe and sound mortgage if the outstanding principal
balance under the mortgage at the time of purchase by the Facility exceeds 80
percent of the sale price of the single-family residence securing the mortgage,
unless—</text>
<paragraph id="HEC9EA19886A849CF95670639BC40B52A"><enum>(1)</enum><text display-inline="yes-display-inline">the seller retains a participation of not
less than 10 percent of the sale price of the single-family residence securing
the mortgage, and the aggregate amount any outstanding principal balance
(including such participation) shall not exceed 90 percent of the sale price of
the single-family residence securing the mortgage;</text>
</paragraph><paragraph id="HEE0B0DBD271845D6B77BC77A59BDF8B7"><enum>(2)</enum><text>for such period
and under such circumstances as the Facility Board may require, the seller
agrees to repurchase or replace the mortgage upon demand of the Facility in the
event that the mortgage is in default;</text>
</paragraph><paragraph id="H0190103C37634B1C9F1FEDF5954B58A2"><enum>(3)</enum><text>the portion of the
outstanding principal balance of the mortgage that exceeds such 80 percent is
guaranteed or insured by a qualified insurer, as determined by the Facility in
accordance with such standards and requirements as the FHFA Board shall
establish; or</text>
</paragraph><paragraph id="H3D6C0339C7974EF2BC9AACC35773EA10"><enum>(4)</enum><text>the mortgage is
financed in part through a shared equity arrangement under which independent,
private sector investors invest, together with the mortgagors, equity funds for
such residences in the form of cash (or its equivalent) paid on account of the
property and thereby share in the ownership of such residences, except
that—</text>
<subparagraph id="H505407A3FEFE4C9E99EA94CA7A88B50C"><enum>(A)</enum><text display-inline="yes-display-inline">the mortgagor shall retain an ownership in
the residence under the shared equity arrangement that is not less than 50
percent; and</text>
</subparagraph><subparagraph id="HF7B9759095B34C318B5E39B0A6BCAA03"><enum>(B)</enum><text display-inline="yes-display-inline">such private sector financing may provide
not more than half of the minimum downpayment amount required under subsection
(d).</text>
</subparagraph></paragraph></subsection><subsection id="H9E1DBD3F774A4D77ACD6B6E1BA5164A5"><enum>(c)</enum><header>Conforming loan
limits for single-Family mortgages</header><text display-inline="yes-display-inline">The regulations of the FHFA Board pursuant
to subsection (a) shall ensure that a mortgage on single-family housing of a
particular size shall not be considered a safe and sound mortgage if the
mortgage has an original principal obligation that exceeds the higher
of—</text>
<paragraph commented="no" id="HE3158C91088D48DD8C82F08A781887C7"><enum>(1)</enum><text display-inline="yes-display-inline">the maximum dollar amount limitation for
such fiscal year governing the maximum original principal obligation of
mortgages that are purchased by the Federal Home Loan Mortgage Corporation for
such size residence, as determined under section 305(a)(2) of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), or</text>
</paragraph><paragraph commented="no" id="H97AC67CB3CB94AF3A96A3B31A2EE9FA9"><enum>(2)</enum><text>125 percent of the
area median price for a residence of the applicable size, but in no case to
exceed 175 percent of the limitation for such year determined under such
section 305(a)(2) for a residence of the applicable size,</text>
</paragraph><continuation-text continuation-text-level="subsection">except
that, for mortgages originated in any year, if the limitation for such year on
the maximum original principal obligation of a mortgage that may be purchased
by the Federal National Mortgage Association or the Federal Home Loan Mortgage
Corporation determined under section 302(b)(2) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1717(b)(2)) or section 305(a)(2) of the
Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1754(a)(2)) respectively,
for any size residence for any area is less than such maximum original
principal obligation limitation that was in effect for such size residence for
such area for 2008 pursuant to section 201 of the Economic Stimulus Act of 2008
(Public Law 110–185; 122 Stat. 619), notwithstanding any other provision of law
or of this Act, the limitation under this subsection on the maximum original
principal obligation of a mortgage for such size residence for such area that
may be considered a safe and sound mortgage shall be such maximum limitation in
effect for such size residence for such area for 2008.</continuation-text></subsection><subsection id="H6A1F74975B234DFD83BA51BE99A85D69"><enum>(d)</enum><header>Downpayment
requirement</header><text display-inline="yes-display-inline">The regulations
of the FHFA Board pursuant to subsection (a) shall ensure that, notwithstanding
any other provision of this title, a mortgage on single-family housing shall
not be considered a safe and sound mortgage unless the mortgagor has paid on
account of the property subject to the mortgage, in cash (or its equivalent),
an amount equal to not less than 5 percent of the sale price of the property or
such larger amount as the FHFA Board may establish to mitigate risks and
prevent losses to the Facility.</text>
</subsection><subsection id="H859F949B53ED4341980F4380112429E1"><enum>(e)</enum><header>Adjustable rate
mortgages</header><text display-inline="yes-display-inline">The regulations of
the FHFA Board pursuant to subsection (a) shall provide that a mortgage on
single-family housing having an interest rate that is not fixed at a single
annual percentage rate for the entire term of the mortgage shall not be
considered a safe and sound mortgage unless such quality, type, and class of
non-fixed rate mortgages has been approved for purposes of this section by the
FHFA Board as consistent with the safety and soundness of the Facility and the
mortgage finance system.</text>
</subsection><subsection id="H1686854D15AD40FD8D65C820A0641173"><enum>(f)</enum><header>Representation
and warranty requirement</header><text display-inline="yes-display-inline">The
regulations of the FHFA Board pursuant to subsection (a) shall provide that a
mortgage shall not be considered a safe and sound mortgage unless such mortgage
meets such requirements regarding representations and warranties sufficient to
certifying that the mortgage is covered by a policy for title insurance as the
FHFA Board shall establish to ensure that title-related risks for the mortgage
are borne by State-licensed title insurance companies.</text>
</subsection><subsection id="H70675D2BEEFE49DE957F8792C10EC0FC"><enum>(g)</enum><header>Underwriting
standards</header><text display-inline="yes-display-inline">The regulations of
the FHFA Board pursuant to subsection (a) shall provide that a mortgage shall
not be considered a safe and sound mortgage unless such mortgage meets such
underwriting standards as the FHFA Board shall establish that—</text>
<paragraph id="H1BA8812187A84239A2D222DBFEAC468A"><enum>(1)</enum><text>promote
transparency, uniformity, and consumer protections; and</text>
</paragraph><paragraph id="H13CBD8CDEED84DE1980FC562CEA62077"><enum>(2)</enum><text>ensure a
mortgagor’s ability to repay the mortgage obligation, including standards for
determining mortgagors’ income, assets, liabilities, credit history, and credit
risk.</text>
</paragraph></subsection><subsection id="HA7028648A8C94DFE90180BEF54A62EF6"><enum>(h)</enum><header>Property
valuation standards</header><text display-inline="yes-display-inline">The
regulations of the FHFA Board pursuant to subsection (a) shall provide that a
mortgage shall not be considered a safe and sound mortgage unless such mortgage
meets the property valuation and appraisal standards under subpart E of part
226 of title 12, Code of Federal Regulations (Regulation Z).</text>
</subsection><subsection id="H1A3EC47F4DB04953BACDAE687877F67C"><enum>(i)</enum><header>Price
limitations</header><text display-inline="yes-display-inline">The Facility
shall ensure that prices to be paid by the Facility for residential mortgages
purchased shall be based on market prices for the particular class of mortgages
involved.</text>
</subsection><subsection id="H5DDA3AFAC12C446D9CC27DCC7657D502"><enum>(j)</enum><header>Seller
approval</header><text display-inline="yes-display-inline">The Facility may
purchase residential mortgages meeting the requirements of this title only from
sellers who have been approved by the Facility as meeting such standards for
approval as the Facility Board shall establish, which shall include standards
governing the following:</text>
<paragraph id="H3E46B8FA371A4D3EAFF20D59276944AD"><enum>(1)</enum><text>Care and due
diligence in complying with the underwriting standards established pursuant to
subsection (g).</text>
</paragraph><paragraph id="H392EC0F670D649778A73716AD521C123"><enum>(2)</enum><text>Minimum capital to
ensure the ability to perform under standard representations and
warranties.</text>
</paragraph><paragraph id="HDC3E9E0A3EA1492DB873FAA2C81C0BD0"><enum>(3)</enum><text display-inline="yes-display-inline">Contractual obligations.</text>
</paragraph><paragraph id="HE0D61FAEFC4F4EC79A6F8D2626E97AD1"><enum>(4)</enum><text>Representations
and warranties pursuant to subsection (f).</text>
</paragraph><paragraph id="H1B2D9883EEB94EB8B0A1F03862D47C9C"><enum>(5)</enum><text>Indemnification
for losses.</text>
</paragraph><paragraph id="H81559C1DD3CB48EBA2B79CDB5303256B"><enum>(6)</enum><text>Delivery of
documents.</text>
</paragraph><paragraph id="HBFF98BE40C8B4C689DA7C3B2658045CD"><enum>(7)</enum><text>Ownership,
establishment, maintenance, retaining, examination, and storage of mortgage
records and information.</text>
</paragraph><paragraph id="HB658BA1E7BCA46A79ECA59740AA3F427"><enum>(8)</enum><text>Fidelity bond and
errors and omissions coverage.</text>
</paragraph><paragraph id="HD2B5B4BDE1F04F87AA26258FD4F0D0BC"><enum>(9)</enum><text>Capitalization,
net worth, and liquidity.</text>
</paragraph><paragraph id="H6590D91253DF49ED9BA6844FDE29D94D"><enum>(10)</enum><text>Lending
practices.</text>
</paragraph></subsection><subsection id="H03DA9C1FC8FC4EBCB2B77F016AEAEF9F"><enum>(k)</enum><header>Servicing of
mortgages</header><text>This Act may not be construed to prohibit, or to
authorize the Facility Board or the FHFA Board to prohibit, any approved seller
who sells a mortgage to the Facility from servicing such mortgage.</text>
</subsection></section><section id="H7A5FEE1712724EF5AB2DDFA6C8E3CB0D"><enum>103.</enum><header>Reduction of
market share</header>
<subsection id="H3D673F9F03124BC1BDBAC33FD76EA7DF"><enum>(a)</enum><header>Limitations</header><text display-inline="yes-display-inline">The FHFA Board shall, by regulation, seek
to ensure that the market share of the Facility, as defined by the FHFA Board,
does not exceed approximately 50 percent of mortgage originations in the United
States.</text>
</subsection><subsection id="H56355ADECF7B4A189003B26705B27E9A"><enum>(b)</enum><header>Standards and
requirements</header><text display-inline="yes-display-inline">The FHFA Board
shall establish such standards and requirements regarding the maximum volume of
purchases by the Facility. In establishing such standards, the FHFA Board shall
seek to avoid excessive disruption to stability of the residential mortgage
market.</text>
</subsection><subsection id="HB53990217ACB46BEA482D7B3977F3B0E"><enum>(c)</enum><header>Safety
valve</header><text>Notwithstanding any other provision of this section, the
FHFA Board may provide, in a timely manner, for the temporary suspension or
adjustment of the limits under this section on the market share of the
Facility, but only if the FHFA Board determines that the private market has
significantly reduced participation in the residential mortgage markets, taking
into consideration the yield spread between private label mortgage-backed
securities and mortgage-backed securities issued by the Facility and such other
indicia as the FHFA Board considers appropriate.</text>
</subsection><subsection id="H9E624FE0BBF4427BB9D6CD263EB80840"><enum>(d)</enum><header>Correction
plan</header><text>If at any time the FHFA Board determines that the market
share of the Facility exceeds the maximum market share permitted under this
section, the FHFA Board shall require the Facility to establish and implement a
plan that—</text>
<paragraph id="H6685F4B0227A4830A4E85CA22AFDA36A"><enum>(1)</enum><text>reduces such
market share so that it complies with the subsection (a)(1);</text>
</paragraph><paragraph id="HCC5C75A7F82145C38CA0C2E7B9BA95CF"><enum>(2)</enum><text>impacts all
geographic regions of the country similarly;</text>
</paragraph><paragraph id="H70BE21DB559D497DAE7DB42ED04A340A"><enum>(3)</enum><text>restricts or
prohibits the business of the Facility in mortgages that are used to prepay an
existing loan secured by the same property as such mortgage; and</text>
</paragraph><paragraph id="H05183CD4D7384C0EB4EDE4E0A2BC3168"><enum>(4)</enum><text>increases
guarantee fees under section 105 or reinsurance fees under section 106(a), or
both.</text>
</paragraph><continuation-text continuation-text-level="subsection">Such a plan
shall seek to impact all lenders as equally as possible, taking into account
each lender’s history regarding its share of activity in selling mortgages to
the Facility.</continuation-text></subsection></section><section id="H02EE210915824DE5B8CD4DAF6E9E31C2"><enum>104.</enum><header>Capital
standards</header>
<subsection id="HDF6459A9103F4C24B2D5CE19C4D5223A"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">The FHFA Board shall,
by regulation, establish risk-based capital requirements for the Facility to
ensure that the Facility operates in a safe and sound manner, maintaining
sufficient capital and reserves to support the risks that arise in operations
and management of the Facility.</text>
</subsection><subsection id="H5A0A5225EAA84BEC8E149B2A667E80A0"><enum>(b)</enum><header>Factors</header><text>The
capital requirements for the Facility shall—</text>
<paragraph id="H3A3D70B91C044068B23083CBB59BB59C"><enum>(1)</enum><text>be based on the
risks specifically involved in the purchase and securitization of safe and
sound mortgages, as such term is defined pursuant to section 103(a); and</text>
</paragraph><paragraph id="HC0B18DAD022B4079945187C98B82F1B0"><enum>(2)</enum><text>be based on
actuarial loss rate history of mortgages having similar characteristics.</text>
</paragraph></subsection></section><section id="H386427DFB5D347C3B9CCC92C4980BF0A"><enum>105.</enum><header>Guarantee
fees</header>
<subsection id="H76A7E10B65714C83800D8423F5B918B3"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">The Facility shall charge a guarantee fee
under this section in connection with any purchase of residential mortgages
from approved sellers and in connection with any guarantee issued by the
Facility of timely payment of principal and interest on mortgage-backed
securities, notes, and other obligations issued by the Facility.</text>
</subsection><subsection id="HCEB65A70556A49669801760BB29C66B2"><enum>(b)</enum><header>Amount</header><text display-inline="yes-display-inline">Any guarantee fee under this section shall
be in an amount that the Facility Board determines appropriate and reasonable,
based on likelihood of loss for the particular type of product, to provide for
operation of the Facility in accordance with this Act, except that such fees
may be increased to facilitate compliance with the market share limitations
under section 103 or for such other purpose as the FHFA Board may approve. The
FHFA Board may establish a minimum amount for the guarantee fee.</text>
</subsection><subsection id="H2F9F006B39084D77BABBCD7160DEF7BD"><enum>(c)</enum><header>Impermissible
considerations</header><text>Such fees shall be based on quality of mortgages
and may not be based on or incorporate—</text>
<paragraph id="HEFADAEA2357043669621A2672029ECAC"><enum>(1)</enum><text>the geographic
location of properties subject to mortgages backing or on which are based such
securities, notes, or other obligations;</text>
</paragraph><paragraph id="H8B6E0C8108334D1586760EB09B4BA582"><enum>(2)</enum><text>the volume of
mortgages sold to the Facility by an approved seller; or</text>
</paragraph><paragraph id="H55B9D0B1582B463AAD636418B365C3E3"><enum>(3)</enum><text>any consideration
of reducing the costs of homeownership.</text>
</paragraph></subsection></section><section id="HD82CDC07C2474D57B158797EAA1BEC00"><enum>106.</enum><header>Federal
insurance backstop</header>
<subsection id="H22576D5EAFBB436F950668E6E11ABAFF"><enum>(a)</enum><header>Reinsurance
fees</header>
<paragraph id="H3126A7C2519E4965B1B4242B001B7DB5"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Facility shall
collect and transfer to the Reinsurance Fund established under subsection (b),
a reinsurance fee under this subsection in connection with any guarantee issued
by the Facility of timely payment of principal and interest on mortgage-backed
securities, notes, and other obligations issued by the Facility.</text>
</paragraph><paragraph id="HFFE45DBC1D7B4B258C0DCD07D2B717C3"><enum>(2)</enum><header>Amount</header><text display-inline="yes-display-inline">The fee shall be established by the
Facility Board in such amount as may be necessary to cover obligations of the
Facility under such guarantees to the extent the capital funds of the Facility
cannot cover such obligations and shall be based on the outstanding mortgage
exposure of the Facility. The FHFA Board may establish a minimum amount for the
reinsurance fee.</text>
</paragraph></subsection><subsection id="HC52EF06F7A574A70BD10C361A11A031D"><enum>(b)</enum><header>Reinsurance
Fund</header>
<paragraph id="HC54CCABECFFC4C0792EE535E41B6C481"><enum>(1)</enum><header>Establishment</header><text display-inline="yes-display-inline">There is established in the Treasury of the
United States a Reinsurance Fund for the Facility.</text>
</paragraph><paragraph id="HE02251AD0C89406F9A4DC838D40F8DAD"><enum>(2)</enum><header>Credits</header><text>The
Reinsurance Fund shall be credited with—</text>
<subparagraph id="H4120806130914BF0B97B888103482D40"><enum>(A)</enum><text>all reinsurance
fees collected by the Facility pursuant to subsection (a);</text>
</subparagraph><subparagraph id="H64EFF0D414584D5D92C315EB790EA659"><enum>(B)</enum><text display-inline="yes-display-inline">any amounts earned on investments of the
Fund pursuant to paragraph (4); and</text>
</subparagraph><subparagraph id="H11E2AC976408469A94BE7AAC2CA42625"><enum>(C)</enum><text display-inline="yes-display-inline">such other amounts as may be credited to
the Fund, including amounts as may be required to be credited by the Secretary
of the Treasury.</text>
</subparagraph></paragraph><paragraph id="H80556F275F0F402C95D48880A6546CBE"><enum>(3)</enum><header>Use</header><text display-inline="yes-display-inline">Amounts in the Reinsurance Fund shall be
available, at the direction of FHFA Board, only for payment of obligations of
the Facility under guarantees issued by the Facility of timely payment of
principal and interest on mortgage-backed securities, notes, and other
obligations issued by the Facility and only to the extent that the FHFA Board
determines that the capital of the Facility is insufficient to cover such
obligations.</text>
</paragraph><paragraph id="H09B9E75A900B4F1F9AF6B507F7A94554"><enum>(4)</enum><header>Investments</header><text display-inline="yes-display-inline">The Secretary may invest such amounts as
the Secretary considers advisable in obligations issued or guaranteed by the
United States.</text>
</paragraph></subsection></section><section id="HEE5CA225889E449987E0B2E1EA072BBC"><enum>107.</enum><header>Deficit
reduction</header><text display-inline="no-display-inline">Any receipts and
earnings of the Facility in excess of amounts required to comply with the
capital standards established pursuant to section 104, amounts required to be
deposited in the Reinsurance Fund established under section 106(b), and amounts
required for the repurchase of senior preferred stock of the enterprises issued
pursuant to the Senior Preferred Stock Purchase Agreements entered into between
the Department of the Treasury and the enterprises in September 2008 (as such
Agreement may be amended and restated), shall be transferred into the General
Fund of the Treasury and used to reduce the budget deficit of the Federal
Government.</text>
</section><section id="HCC7D9F321A6649FEAF786E86F591AF77"><enum>108.</enum><header>Portfolio
reduction</header>
<subsection id="HFEBB83091F0146498A93B1FDF58B7383"><enum>(a)</enum><header>Limitation</header>
<paragraph id="HF750B63A5ADE4B89B55C5B3A17E5F8BB"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Facility may not
own mortgage assets in excess of $250,000,000,000, as such amount shall be
adjusted by the FHFA Board, effective January 1 of each year beginning after
the date of the enactment of this Act, in accordance with an appropriate
inflationary index, as determined by the FHFA Board. The FHFA Board shall cause
notice of each such adjustment to be published promptly in the Federal
Register.</text>
</paragraph><paragraph commented="no" id="H3212D931E3A84DB3BE710A97808EA64C"><enum>(2)</enum><header>Definition</header><text display-inline="yes-display-inline">For purposes of this section, the term
<term>mortgage assets</term> means, with respect to the Facility, assets of the
Facility consisting of mortgages, mortgage loans, mortgage-related securities,
participation certificates, mortgage-backed commercial paper, obligations of
real estate mortgage investment conduits and similar assets, in each case to
the extent such assets would appear on the balance sheet of the
Facility.</text>
</paragraph></subsection><subsection id="H09C884623A3E4CBEB9539347556A703E"><enum>(b)</enum><header>Use</header><text>Mortgage
assets owned by the Facility shall be available for use—</text>
<paragraph id="H8779796C76C644EBA3BF24E2774868DD"><enum>(1)</enum><text>to support
multifamily housing and residential mortgages that cannot readily be
securitized;</text>
</paragraph><paragraph id="HE18D7DA556E14BEB81E2E5AD62F26CFF"><enum>(2)</enum><text>to provide
financing to support residential mortgage markets affected by economic
downturns; and</text>
</paragraph><paragraph id="HAE86D67B827A45258FD5A41A924CFBA8"><enum>(3)</enum><text>to modify
delinquent mortgages that are purchased from pools of mortgages backing or on
which are based mortgage-backed securities issued and guaranteed by the
Facility.</text>
</paragraph></subsection><subsection id="H8F2A96757A4749F2BE01766D1010804A"><enum>(c)</enum><header>Monitoring</header><text>The
FHFA Board shall monitor the mortgage assets owned by the Facility to ensure
compliance with this section.</text>
</subsection><subsection id="HB9D9F2836A324950B08F775FE85D2D43"><enum>(d)</enum><header>Safety
valve</header><text>Notwithstanding subsection (a), the FHFA Board may provide
for the temporary increase in the limitation under subsection (a) on mortgage
assets owned by the Facility if the FHFA Board determines that the there has
been a substantial reduction in the availability of private residential
mortgage financing, taking into consideration such indicia as the FHFA Board
considers appropriate.</text>
</subsection></section><section commented="no" id="H50A741B9CEF149A69412D1BB0E6C2B4F"><enum>109.</enum><header>Initial
standards</header><text display-inline="no-display-inline">Not later than the
expiration of the 6-month period beginning upon the appointment of all initial
members of the FHFA Board pursuant to section 301(b) the FHFA Board shall issue
such regulations, guidelines, orders, requirements, and standards pursuant to
section 1396C of the Federal Housing Enterprises Financial Safety and Soundness
Act of 1992 (as added by section 302 of this Act) as may be required under this
title for the establishment and operation of the Facility.</text>
</section><enum>II</enum><header>Ending the
conservatorships of Fannie Mae and Freddie Mac</header>
<section id="H91D7C8F946D643FE9635A9B12025E28B"><enum>201.</enum><header>Treasury
plan</header>
<subsection id="HD94C60A200924E7E9AE60C038E4614B5"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Not later than the
expiration of the 6-month period beginning upon the date of the enactment of
this Act, the Secretary of the Treasury, in consultation with the Director of
the Federal Housing Finance Agency, shall develop and submit to the Congress a
plan that provides for the orderly and timely wind-down and termination of the
enterprises, during such period as the Secretary considers appropriate but in
no case ending later than 36 months after the date of the enactment of this
Act, in accordance with this section and the receivership authority under
section 1367 of the Federal Housing Enterprises Financial Safety and Soundness
Act of 1992 and in a manner that avoids excessive disruption to the stability
of the residential mortgage market.</text>
</subsection><subsection id="H5B44E4BB2BC64710A1E5EC7B9EA0F7E9"><enum>(b)</enum><header>Contents</header><text>Such
plan—</text>
<paragraph id="HA0148E9AD32B4D6AB3F27588AF41EBCF"><enum>(1)</enum><text>shall provide for
the termination, during the period referred to in subsection (a), of the
authority of the enterprises to conduct any new business;</text>
</paragraph><paragraph id="H7D1E95B4DBE7473FAF9F3C10AE228FBD"><enum>(2)</enum><text display-inline="yes-display-inline">shall provide for the transfer of the
assets, obligations, and liabilities of the enterprises to the Secondary Market
Facility for Residential Mortgages established under title I;</text>
</paragraph><paragraph id="HF7B7ABEB367F406884A31F841178E98F"><enum>(3)</enum><text>may provide for
the Facility to segregate such sound assets and troubled or impaired assets of
the enterprises into separate trusts or entities;</text>
</paragraph><paragraph commented="no" id="H462A565F0AD7422C8B5AB83CE0F066FD"><enum>(4)</enum><text display-inline="yes-display-inline">shall provide for the full repayment to the
taxpayers and the Federal Government of the investment made by the taxpayers
and the Federal Government in the enterprises, which repayment shall be made by
the Facility from income generated by the Facility, in a manner that is
generally consistent with the manner in which the taxpayers and the Federal
Government were reimbursed by financial institutions assisted under the
Troubled Assets Relief Program of the Secretary of the Treasury under title I
of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211 et seq.),
or in such other manner as the Secretary considers appropriate;</text>
</paragraph><paragraph id="H5AF47006AEA14334A29B2CF91D20ECFB"><enum>(5)</enum><text display-inline="yes-display-inline">shall provide for the Secondary Market
Facility for Residential Mortgages established under title I of this Act to
purchase from the Secretary of the Treasury all preferred stock held by the
Treasury pursuant to purchase under the Senior Preferred Stock Purchase
Agreements entered into with the Treasury by the enterprises in September 2008
(as such Agreements have been amended and restated);</text>
</paragraph><paragraph id="H68CF0307A26D46EDAEFF86715841A8E4"><enum>(6)</enum><text display-inline="yes-display-inline">shall provide that, notwithstanding any
other provision of law, any provision of the Senior Preferred Stock Purchase
Agreement entered into between the Department of the Treasury and an enterprise
in September 2008 (as any such Agreement may be amended and restated), or any
provision of any certificate in connection with such an Agreement creating or
designating the terms, powers, preferences, privileges, limitations, or any
other conditions of the Variable Liquidation Preference Senior Preferred Stock
of an enterprise issued pursuant to such an Agreement, the annual rate of
dividends paid on the Variable Liquidation Preference Senior Preferred Stock of
each enterprise issued pursuant to such an Agreement shall, until all such
stock is purchases by the Facility pursuant to paragraph (5) of this
subsection—</text>
<subparagraph id="H2B3E73C2820643C4BCEFCA70092A3757"><enum>(A)</enum><text>be reduced to not
more than 5 percent; and</text>
</subparagraph><subparagraph id="HBA7A5822D8084932A12962FBB6EEC014"><enum>(B)</enum><text>be variable and
based on market conditions and performance;</text>
</subparagraph></paragraph><paragraph id="HE9C7610C905949B59CEB2F2EF161B0DE"><enum>(7)</enum><text>shall provide for
the fulfillment of all obligations of the enterprises under any outstanding
debt obligations and mortgage-backed securities of the enterprises; and</text>
</paragraph><paragraph id="HE69217DEB1174F328BC3D1007AA7B85D"><enum>(8)</enum><text>shall provide a
date during the period referred to in subsection (a) for the repeal of the
Federal National Mortgage Association Charter Act and the Federal Home Loan
Mortgage Corporation Act.</text>
</paragraph></subsection></section><section id="HAA3F68D0EE0E440A92C02DE5F63D0BBC"><enum>202.</enum><header>Implementation
of plan</header><text display-inline="no-display-inline">The Secretary
shall—</text>
<paragraph id="HF3F2CCAB59C649D38E355F1F3DBC5C20"><enum>(1)</enum><text>commence
implementation of the plan submitted to the Congress under section 201 upon
expiration of the 90-day period beginning upon such submission; and</text>
</paragraph><paragraph id="H733E9ABE2D7947C5A263F60C897B5261"><enum>(2)</enum><text display-inline="yes-display-inline">wind-down and terminate the enterprises in
accordance with the terms of the plan.</text>
</paragraph></section><section id="H75EBD578CFC84AE782459B25579AB95F"><enum>203.</enum><header>Repeal of
charter Acts</header><text display-inline="no-display-inline">Upon the date
specified in the plan pursuant to section 201(b)(8), the following provisions
are repealed:</text>
<paragraph id="HCA5C7C00CEE44DD69B21A0DAAE11DE09"><enum>(1)</enum><text>The Federal
National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.).</text>
</paragraph><paragraph id="H0B8C486292F641B986CDDD4071343CEF"><enum>(2)</enum><text>The Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.).</text>
</paragraph></section><enum>III</enum><header>Federal Housing
Finance Agency</header>
<section id="H3B042CC809DE420A88F14AECAE88489D"><enum>301.</enum><header>Establishment
of Federal Housing Finance Agency Board</header>
<subsection id="H6212EE6B152B42FB8A755763566B1E42"><enum>(a)</enum><header>Establishment</header><text>Section
1312 of the Federal Housing Enterprises Financial Safety and Soundness Act of
1992 (12 U.S.C. 4512) is amended—</text>
<paragraph id="H65DDE003FB7E43C189E07BB09DB28A6A"><enum>(1)</enum><text>by striking the
section designation and heading and all that follows through subsection
(c);</text>
</paragraph><paragraph id="H42D0D3830B9040959B993ADFFF6C59C4"><enum>(2)</enum><text>by striking
subsections (e) through (g);</text>
</paragraph><paragraph id="H54B30F47A6664928B03E0E6B54CC2EB6"><enum>(3)</enum><text>by redesignating
subsection (d) as subsection (l); and</text>
</paragraph><paragraph id="H2DEC6284264A49018427C06CD965C1C8"><enum>(4)</enum><text>by inserting
before subsection (l) (as so redesignated) the following:</text>
<quoted-block display-inline="no-display-inline" id="HD69597109D154980AA116A1E7842BDB1" style="OLC">
<section id="HDB241D949D694B4F850218DFACEFC92F"><enum>1312.</enum><header>Federal
Housing Finance Agency Board</header>
<subsection id="HB1C91B693FF743CE99593D9FD45CAF09"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">There is established the Federal Housing
Finance Agency Board, who shall govern the Agency.</text>
</subsection><subsection id="H82562FB51795454D803A6A7716E65B13"><enum>(b)</enum><header>Appointment</header><text display-inline="yes-display-inline">The FHFA Board which shall consist of 5
members, as follows:</text>
<paragraph id="H227EACC6901B4F68A27234BA82BC88FD"><enum>(1)</enum><header>Ex officio
members</header><text display-inline="yes-display-inline">Two ex officio
members who shall be—</text>
<subparagraph id="H139A2A52DE5045158D2C4037CB51847E"><enum>(A)</enum><text display-inline="yes-display-inline">the Secretary of the Treasury or the
Secretary’s designee; and</text>
</subparagraph><subparagraph id="H9FE722922B8B4496B1B4044CA566F4E5"><enum>(B)</enum><text>the Secretary of
Housing and Urban Development or the Secretary’s designee.</text>
</subparagraph></paragraph><paragraph id="HF3A5B8DE8AE941C186E44F2A60E5233A"><enum>(2)</enum><header>Appointed
members</header><text>Three members, who shall be appointed by the President,
by and with the advice and consent of the Senate, who shall include—</text>
<subparagraph id="HECA57F3582274F22AEDB57D2FE3EB2AA"><enum>(A)</enum><text>one member who
shall possess extensive experience and expertise in financial management or
oversight, capital markets (including debt markets), the secondary mortgage
market, and mortgage-backed securities; and</text>
</subparagraph><subparagraph id="H2C9A1C0123AF4766BDA22F55E0138B6A"><enum>(B)</enum><text>two members who
shall possess extensive experience and expertise in mortgage finance (including
single-family and multifamily housing mortgage finance and with credit unions
and smaller financial institutions), development of affordable housing, and
economic development and revitalization.</text>
</subparagraph></paragraph></subsection><subsection display-inline="no-display-inline" id="H58539869F7704880B29CA0773179219B"><enum>(c)</enum><header>Political
affiliation</header><text display-inline="yes-display-inline">Not more than
three members of the FHFA Board may be members of the same political
party.</text>
</subsection><subsection id="H94EB4568C4024DE796B8FD9E04E84BA5"><enum>(d)</enum><header>Chairperson</header><text display-inline="yes-display-inline">The Chairperson of the FHFA Board shall be
designated by the President at the time of appointment. The Chairperson shall
designate another member to serve as Acting Chairperson during the absence or
disability of the Chairperson.</text>
</subsection><subsection id="H3A7DD2A72BFD4125898C382CB7DA05D8"><enum>(e)</enum><header>Term;
removal</header><text display-inline="yes-display-inline">Each member of the
FHFA Board shall be appointed for a term of 5 years, and may be removed by the
President only for cause.</text>
</subsection><subsection id="HEFD967277C854E609A9EBCF2A9DE261E"><enum>(f)</enum><header>Vacancies</header><text display-inline="yes-display-inline">A member of the FHFA Board appointed to
fill a vacancy occurring before the expiration of the term for which the
member’s predecessor was appointed shall be appointed only for the remainder of
that term.</text>
</subsection><subsection id="HD6E58E5FEB2142CF83D5A80A8574F683"><enum>(g)</enum><header>Continuation of
membership</header><text>A member of the FHFA Board may serve after the
expiration of the member’s term until a successor has been appointed.</text>
</subsection><subsection commented="no" id="H5D097064F56D47DAB27663721E2A5D99"><enum>(h)</enum><header>Compensation</header><text>Members
of the FHFA Board shall each receive compensation at the rate prescribed for
level III of the Executive Schedule under section 5314 of title 5, United
States Code.</text>
</subsection><subsection id="H4044F438A3A740559D0A59013A4BF731"><enum>(i)</enum><header>Meetings</header><text display-inline="yes-display-inline">The FHFA Board shall meet upon notice by
the Chairperson, but in no event shall the FHFA Board meet less frequently than
once every 2 months. Any member of the FHA Board may, upon giving written
notice to the Chairperson, require a special meeting of the FHFA Board, which
shall be convened by the Chairperson within 30 days after such notice.</text>
</subsection><subsection id="H43E3207DD07B4CF3B7BFBD6849D8143B"><enum>(j)</enum><header>Testimony</header><text display-inline="yes-display-inline">On an annual basis, the Board shall testify
before the Congress regarding the safety and soundness of the Secondary Market
Facility for Residential Mortgages, any material deficiencies in the conduct of
the operations of the Facility; the overall operational status of the Facility;
operations, resources, and performance of the FHFA Board, and such other
matters relating to the FHFA Board and the Facility.</text>
</subsection><subsection id="HF767A7AB2B0F4CFC8252F2CA83EFA6C3"><enum>(k)</enum><header>Advisory
Committee</header>
<paragraph id="H08812E8F189D4D7C91BE59F8AAA19C4C"><enum>(1)</enum><header>Establishment</header><text display-inline="yes-display-inline">There is established an Advisory Committee
to consist of 12 members who shall be appointed by the FHFA Board.</text>
</paragraph><paragraph commented="no" id="H7235B8A66FAD4A988DCCCACB235F0C8C"><enum>(2)</enum><header>Membership</header><text>Members
of the Advisory Committee shall be broadly representative of mortgage loan
originators, investors in mortgage-backed securities, and consumer advocacy
organizations, and shall include—</text>
<subparagraph commented="no" id="HBCD92ECC26314595A09C204224FFA082"><enum>(A)</enum><text>3 members who have
extensive experience and expertise in financial management or oversight,
capital markets (including debt markets), the secondary mortgage market, and
mortgage-backed securities;</text>
</subparagraph><subparagraph commented="no" id="HD951530D9A704EF493FD249973917C37"><enum>(B)</enum><text display-inline="yes-display-inline">3 members who have extensive experience and
expertise in mortgage finance, including with single family and multifamily
housing and with credit unions and small institutions;</text>
</subparagraph><subparagraph commented="no" id="H9047EB5A14E646CA87B2A3F69CB63D8A"><enum>(C)</enum><text display-inline="yes-display-inline">3 members who have extensive experience and
expertise in mortgage loan origination and closing, including mortgage bankers,
mortgage brokers, settlement services providers; and</text>
</subparagraph><subparagraph commented="no" id="H7770CBB0E36742A3BFDDB3E42C6F4CDD"><enum>(D)</enum><text>3 members from
consumer advocacy organizations and other organizations that the FHFA Board
deems appropriate to advise the FHFA Board in effectively carrying out its
oversight of the Facility.</text>
</subparagraph></paragraph><paragraph id="H92BD773473044E11978B294DEF9BADBB"><enum>(3)</enum><header>Meetings</header><text display-inline="yes-display-inline">The Advisory Committee shall meet at least
once each calendar quarter.</text>
</paragraph><paragraph id="H1DBB1D2CC1334AF8A3B4E9DC79D73F79"><enum>(4)</enum><header>Duties</header><text display-inline="yes-display-inline">The Advisory Committee shall advise the
FHFA Board on its operations and discharge of its duties, and shall submit its
own comments to the Congress on the extent to which the FHFA Board is meeting
its responsibilities under the law and any suggestions for improvements in such
regard.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HB608C8492870472D930ACE60BFB25A8F"><enum>(b)</enum><header>Transition</header>
<paragraph id="HCB8064F104CE4A8B967FD544DB492916"><enum>(1)</enum><header>Timing of
appointments</header><text display-inline="yes-display-inline">The President
shall endeavor to appoint and have confirmed all initial members of the Federal
Housing Finance Agency Board pursuant to section 1312(b)(2) of the Federal
Housing Enterprises Financial Safety and Soundness Act of 1992 (as amended by
subsection (a)(1) of this section) not later than the expiration of the 6-month
period beginning upon the date of the enactment of this Act.</text>
</paragraph><paragraph id="HF7382A5E7B3846938805331E989F3AFA"><enum>(2)</enum><header>Continued
service of Director</header><text display-inline="yes-display-inline">Notwithstanding the amendment made by
subsection (a), during the period beginning on the date of the enactment of
this Act and ending upon the first date on which all initial members of the
Federal Housing Finance Agency Board are appointed and confirmed, the person
serving as the Director of the Federal Housing Finance Agency on such date of
enactment shall act for all purposes as, and with the full powers of, the
Federal Housing Finance Agency Board.</text>
</paragraph></subsection><subsection id="H58AC8B9F1C6848D58A05A74985349779"><enum>(c)</enum><header>Conforming
amendment; references</header>
<paragraph id="H19DB9BF9246649C5825DD0CA914FE359"><enum>(1)</enum><header>Conforming
amendment</header><text>Section 5313 of title 5, United States Code, is amended
by striking the item relating to Director of the Federal Housing Finance
Agency.</text>
</paragraph><paragraph id="HFA46FC7D6B184D33B1B79552FE6DD2BD"><enum>(2)</enum><header>References</header><text display-inline="yes-display-inline">Any references to the Director of the
Federal Housing Finance Agency in statutes, Executive orders, rules,
regulations, directives, or delegations of authority shall be deemed to refer
to the Federal Housing Finance Agency Board established under the amendment
made by subsection (a) of this section.</text>
</paragraph></subsection></section><section id="HC26E19E8E66449D8BA09CDA8B3E63E05"><enum>302.</enum><header>Supervision and
regulation of Facility by FHFA</header><text display-inline="no-display-inline">The Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 is amended by adding at the end the following
new subtitle:</text>
<quoted-block display-inline="no-display-inline" id="H5F93F25CDD7845A9AE99DDDE05D1D37C" style="OLC">
<subtitle id="H0A2919BB1CDC4C70B44D8794145BED74"><enum>F</enum><header>Supervision and
regulation of Secondary Market Facility for Residential Mortgages</header>
<section commented="no" display-inline="no-display-inline" id="H22D2787AE28548D3BCBC04A9815484D8"><enum>1396.</enum><header>Oversight of
Facility</header>
<subsection commented="no" id="H7428845CD3394755B6ED564438FC41A0"><enum>(a)</enum><header>Authority</header>
<paragraph id="H3CE2F49D445C4C62882FF02925FF9047"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secondary Market
Facility for Residential Mortgages established by title I of the
<short-title>Secondary Market Facility for Residential
Mortgages Act of 2011</short-title> (in this subtitle referred to as the
<term>Facility</term>) shall be subject to the supervision and regulation of
the FHFA Board. The FHFA Board shall have general regulatory authority over the
Facility and shall exercise such authority, and may issue such regulations,
orders, and interpretations as the FHFA Board determines necessary to ensure
that the purposes of title I of such Act and this subtitle and any other
applicable laws are carried out and that the Facility is operated in a safe and
sound manner.</text>
</paragraph><paragraph id="HB035DDA2846E4A6AB5FE80216BF5AD96"><enum>(2)</enum><header>Limitation</header><text>Any
authority under this subtitle of the FHFA Board to supervise and regulate the
Facility may not be construed to authorize the FHFA Board to establish or
regulate the amount of guarantee fees under section 105 of the
<short-title>Secondary Market Facility for Residential
Mortgages Act of 2011.</short-title></text>
</paragraph></subsection><subsection id="H5FACAD0400D04A9DA666F7094DFBB6E1"><enum>(b)</enum><header>Use of existing
authority</header><text>Except as provided in this section, the Facility and a
Facility-affiliated party shall be subject to the same supervisory and
enforcement powers of the Director under this title, to the same extent as if
the Facility was a regulated entity and the Facility-affiliated party was an
entity-affiliated party, including—</text>
<paragraph id="HDF541A65A16F49578732D7E3B591CF2F"><enum>(1)</enum><text>authority to
establish and enforce prudential management and operations standards under
section 1313B (12 U.S.C. 4513b);</text>
</paragraph><paragraph id="H8AC97B5807814547AC701C21B8984A6C"><enum>(2)</enum><text>authority to
require reports under section 1314 (12 U.S.C. 4514);</text>
</paragraph><paragraph id="H935FD934ED9F40E4875B0BD98AF5022A"><enum>(3)</enum><text display-inline="yes-display-inline">authority to conduct examinations under
section 1317 (12 U.S.C. 4517);</text>
</paragraph><paragraph id="H9589720EF68B4893AE00ADA3DB516BCA"><enum>(4)</enum><text display-inline="yes-display-inline">the enforcement powers under sections 1371
through 1379 (12 U.S.C. 4631–9); and</text>
</paragraph><paragraph id="H9B14540BAFE74C4E862CB8605981D4FF"><enum>(5)</enum><text display-inline="yes-display-inline">authority to take prompt corrective
supervisory actions in response to capital classifications as provided for in
sections 1365 and 1366 (12 U.S.C. 4615, 4616).</text>
</paragraph></subsection></section><section display-inline="no-display-inline" id="HCED294BE455F40E4B48BC05881EBBF3F" section-type="subsequent-section"><enum>1396A.</enum><header>Monitoring and
evaluation</header>
<subsection id="HF95B7D23F91B403F87056B785058AD91"><enum>(a)</enum><header>Monitoring</header><text display-inline="yes-display-inline">The FHFA Board shall monitor compliance by
the Facility with the requirements of title I of the
<short-title>Secondary Market Facility for Residential
Mortgages Act of 2011</short-title>.</text>
</subsection><subsection id="H6A4B0228F9EA42B5A000028B5172C183"><enum>(b)</enum><header>Evaluation</header><text display-inline="yes-display-inline">Upon the expiration of the 5-year period
beginning on the date of the enactment of the <short-title>Secondary Market Facility for Residential Mortgages Act of
2011</short-title>, the FHFA Board shall submit to the Congress a report
analyzing the performance of the Facility in meeting the purposes of title I of
such Act. Such report shall analyze and compare the performance of the
enterprises during the period consisting of the year 2008 and years prior to
the performance of the enterprises and the Facility during the period
consisting of the year 2009 and years after through the end of such 5-year
period.</text>
</subsection></section><section display-inline="no-display-inline" id="H36508058DAE74E68902AFBE6E6B36705" section-type="subsequent-section"><enum>1396B.</enum><header>Funding of FHFA
Board oversight of Facility</header>
<subsection id="HD4D830769F0945C5A08855D55565F8E6"><enum>(a)</enum><header>Annual
Assessments</header><text>The FHFA Board shall establish and collect from the
Facility annual assessments in an amount not exceeding the amount sufficient to
provide for reasonable costs (including administrative costs) and expenses of
the Agency attributable to the Agency’s supervision and regulation of the
Facility, including—</text>
<paragraph id="H5DCB28F980894592B78E6EA18D17BBBC"><enum>(1)</enum><text>the expenses of
any examinations pursuant section 1396(b)(3);</text>
</paragraph><paragraph id="H358A2941568D48698BA5BB50BE2C045F"><enum>(2)</enum><text>the expenses of
monitoring pursuant to section 1396A(a); and</text>
</paragraph><paragraph id="H979DFF83221F49829148AD59C5E08B40"><enum>(3)</enum><text>such amounts in
excess of actual expenses for any given year as deemed necessary by the FHFA
Board to maintain a working capital fund in accordance with subsection (e) of
this section.</text>
</paragraph></subsection><subsection id="H12D5CE6ED7B64A44BF2791DC866D5A42"><enum>(b)</enum><header>Timing of
payment</header><text>The annual assessment shall be payable semiannually for
each fiscal year, on October 1 and April 1.</text>
</subsection><subsection id="H04CC891DAB65408390255E8DEE5771C0"><enum>(c)</enum><header>Increased Costs
of Regulation</header>
<paragraph id="H3BE582943F0442C583FBD36D562AEEF6"><enum>(1)</enum><header>Increase for
inadequate capitalization</header><text display-inline="yes-display-inline">If
the FHFA Board determines that the Facility is not adequately capitalized in
accordance with the standards established under section 104 of the
<short-title>Secondary Market Facility for Residential
Mortgages Act of 2011</short-title>, the semiannual payments made pursuant to
subsection (b) by the Facility may be increased, as necessary, in the
discretion of the Board to pay additional estimated costs of regulation of the
Facility.</text>
</paragraph><paragraph id="HE0B19CD191BF4A129AE6584147AAE3D7"><enum>(2)</enum><header>Additional
assessment for deficiencies</header><text>If at any time, as a result of
increased costs of regulation of the Facility that is not classified (for
purposes of the standards established under section 104 of such Act) as
adequately capitalized or as the result of supervisory or enforcement
activities pursuant to this subtitle for the Facility, the amount available
from any semiannual payment made by the Facility pursuant to subsection (b) is
insufficient to cover the costs of the Agency with respect to the Facility, the
FHFA Board may make and collect from the Facility an immediate assessment to
cover the amount of such deficiency for the semiannual period. If, at the end
of any semiannual period during which such an assessment is made, any amount
remains from such assessment, such remaining amount shall be deducted from the
assessment for the Facility for the following semiannual period.</text>
</paragraph></subsection><subsection display-inline="no-display-inline" id="H90F5283FD7FB4422AF8AD5D7B36ED639"><enum>(d)</enum><header>Surplus</header><text>Except
with respect to amounts collected pursuant to subsection (a)(3), if any amount
from any annual assessment collected from the Facility remains unobligated at
the end of the year for which the assessment was collected, such amount shall
be credited to the assessment to be collected from the Facility for the
following year.</text>
</subsection><subsection id="H1BC375E1C8484935903B66E189BD7410"><enum>(e)</enum><header>Working Capital
Fund</header><text>At the end of each year for which an assessment under this
section is made, the FHFA Board shall remit to the Facility any amount of
assessment collected from the Facility that is attributable to subsection
(a)(3) and is in excess of the amount the FHFA Board deems necessary to
maintain a working capital fund.</text>
</subsection><subsection id="HA5D6BAAD60104B57887CDE2D5EADAD1C"><enum>(f)</enum><header>Treatment of
Assessments</header>
<paragraph id="H7244C0D7D4984C7FAF850B5AFA5A3579"><enum>(1)</enum><header>Deposit</header><text>Amounts
received by the FHFA Board from assessments under this section may be deposited
by the Board in the manner provided in section 5234 of the Revised Statutes of
the United States (12 U.S.C. 192) for monies deposited by the Comptroller of
the Currency.</text>
</paragraph><paragraph id="HDD6547C25B9D426F80376D50C2B5B1A2"><enum>(2)</enum><header>Not government
funds</header><text>The amounts received by the FHFA Board from any assessment
under this section shall not be construed to be Government or public funds or
appropriated money.</text>
</paragraph><paragraph id="H6586F83FD410458884E770A4DCDDDB2E"><enum>(3)</enum><header>No apportionment
of funds</header><text>Notwithstanding any other provision of law, the amounts
received by the FHFA Board from any assessment under this section shall not be
subject to apportionment for the purpose of chapter 15 of title 31, United
States Code, or under any other authority.</text>
</paragraph><paragraph id="HCFCE3A3E205C45168CFBE043F312D053"><enum>(4)</enum><header>Use of
funds</header><text>The FHFA Board may use any amounts received by the Board
from assessments under this section for compensation of the Board and other
employees of the Agency and for all other expenses of the Board and the
Agency.</text>
</paragraph><paragraph id="H09CA65E5993741F8841639CFB4DC4E78"><enum>(5)</enum><header>Treasury
investments</header>
<subparagraph id="H2B944BA72506406EB0A72EE5BAC7D9DB"><enum>(A)</enum><header>Authority</header><text>The
FHFA Board may request the Secretary of the Treasury to invest such portions of
amounts received by the Board from assessments paid under this section that, in
the Board’s discretion, are not required to meet the current working needs of
the Agency.</text>
</subparagraph><subparagraph id="HE097FF745859461399BE66256038413B"><enum>(B)</enum><header>Government
obligations</header><text>Pursuant to a request under subparagraph (A), the
Secretary of the Treasury shall invest such amounts in Government obligations
guaranteed as to principal and interest by the United States with maturities
suitable to the needs of the Agency and bearing interest at a rate determined
by the Secretary of the Treasury taking into consideration current market
yields on outstanding marketable obligations of the United States of comparable
maturity.</text>
</subparagraph></paragraph></subsection></section><section display-inline="no-display-inline" id="HCD985C31D7804D97A99B3915DE6E94CD" section-type="subsequent-section"><enum>1396C.</enum><header>Regulations and
orders</header>
<subsection id="H9DC5DC28D15449E994E80EAC10496FD4"><enum>(a)</enum><header>Authority</header><text display-inline="yes-display-inline">The FHFA Board shall issue any regulations,
guidelines, or orders necessary to carry out the duties of the FHFA Board under
this subtitle and title I of the <short-title>Secondary
Market Facility for Residential Mortgages Act of 2011</short-title>, and to
ensure that the purposes of this subtitle and title I of such Act are
accomplished.</text>
</subsection><subsection commented="no" id="H2FCD29828B5C453CADEA5EF95D70F916"><enum>(b)</enum><header>Notice and
comment</header><text>Any regulations issued by the FHFA Board under this
section shall be issued after notice and opportunity for public comment
pursuant to the provisions of section 553 of title
5.</text>
</subsection></section></subtitle><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H28D8677D270D489894ABD0BCCEC52D59"><enum>303.</enum><header>Conforming
amendments</header><text display-inline="no-display-inline">The Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 is amended—</text>
<paragraph id="HCEAF58CCFFBA4C13A70F3940ACA3E6F0"><enum>(1)</enum><text>in section 1303
(12 U.S.C. 4502)—</text>
<subparagraph commented="no" id="HC9D654A9CEFB45F68C74374F69208D90"><enum>(A)</enum><text>by striking
paragraph (4);</text>
</subparagraph><subparagraph commented="no" id="H1F3FAB508E5B48928BD0B97DB451BF05"><enum>(B)</enum><text>by redesignating
paragraphs (5) through (8) as paragraphs (4) through (7), respectively;</text>
</subparagraph><subparagraph id="H6E10C85E5A8F40719EC985AF0E396438"><enum>(C)</enum><text>by striking
paragraph (9);</text>
</subparagraph><subparagraph id="HAFA8B352D42441A1B85350112360F7B6"><enum>(D)</enum><text>by redesignating
paragraphs (10) through (12) as paragraphs (8) through (10),
respectively;</text>
</subparagraph><subparagraph id="H8FCC125BEE0E446C8408109343C71F81"><enum>(E)</enum><text>by inserting
before paragraph (13) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H00C5E0B55575459F98390A02CBAE904D" style="OLC">
<paragraph id="HB582F29D0DC14505AF8BE8BF7641FCF6"><enum>(11)</enum><header>FHFA
Board</header><text display-inline="yes-display-inline">The term <term>FHFA
Board</term> means the Federal Housing Finance Agency Board established under
section 1312.</text>
</paragraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="H498806C720054CBC861D838DB9124219"><enum>(F)</enum><text>by redesignating
paragraphs (13) through (31) as paragraphs (12) through (30),
respectively;</text>
</subparagraph></paragraph><paragraph id="H32952F92B8994C9DAEE46BC63C992AA9"><enum>(2)</enum><text>by striking
section 1313A (12 U.S.C. 4513a: relating to the Federal Housing Finance Agency
Oversight Board);</text>
</paragraph><paragraph id="H5E77AA8BFADF4081BF051231D8024CD2"><enum>(3)</enum><text display-inline="yes-display-inline">by striking <quote>Director</quote> each
place such term appears (except in section 1316(g), 1338(i), and 1355) and
inserting <quote>FHFA Board</quote>;</text>
</paragraph><paragraph id="HCA99E16E4C524A1E99C2D8FA7C7B00BE"><enum>(4)</enum><text display-inline="yes-display-inline">by striking <quote>Director’s</quote> each
place such term appears and inserting <quote>FHFA Board’s</quote>;</text>
</paragraph><paragraph id="HE6428839240943F889B6B50931C43F0F"><enum>(5)</enum><text display-inline="yes-display-inline">by striking <quote><header-in-text level="subsection" style="OLC">Director</header-in-text></quote> each place
such term appears in the section headings for sections 1313, 1319B, and 1369D
and inserting <quote><header-in-text level="section" style="OLC">FHFA
Board</header-in-text></quote>; and</text>
</paragraph><paragraph id="HD7C38EE03EF444FDA17DC75EF6B96EC6"><enum>(6)</enum><text>in the heading for
part 2 of subtitle A, by striking <quote><header-in-text level="part" style="OLC">Director</header-in-text></quote> and inserting
<quote><header-in-text level="part" style="OLC">FHFA
Board</header-in-text></quote>.</text>
</paragraph></section>