[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2425 Introduced in House (IH)]

112th CONGRESS
  1st Session
                                H. R. 2425

  To prohibit Fannie Mae, Freddie Mac, and Ginnie Mae from owning or 
 guaranteeing any mortgage that is assigned to the Mortgage Electronic 
   Registration Systems or for which MERS is the mortgagee of record.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              July 6, 2011

  Ms. Kaptur introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
  To prohibit Fannie Mae, Freddie Mac, and Ginnie Mae from owning or 
 guaranteeing any mortgage that is assigned to the Mortgage Electronic 
   Registration Systems or for which MERS is the mortgagee of record.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Transparency and Security in 
Mortgage Registration Act of 2011''.

SEC. 2. PROHIBITION ON GUARANTEEING MERS MORTGAGES.

    (a) Fannie Mae and Freddie Mac.--
            (1) Fannie mae.--Section 302(b) of the National Housing Act 
        (12 U.S.C. 1717(b)) is amended by adding at the end the 
        following new paragraph:
    ``(7)(A) After the date of the enactment of the Transparency and 
Security in Mortgage Registration Act of 2011, the corporation may not 
purchase, acquire, newly lend on the security of, newly invest in 
securities consisting of, or otherwise newly deal in any MERS mortgage 
or mortgages.
    ``(B) After the expiration of the period under subparagraph (C), 
MERS shall not be the named mortgagee or mortgagee of record on any 
mortgage owned, guaranteed, or securitized by the corporation. Not 
later than the expiration of such period, the corporation shall require 
that all mortgage loans owned, guaranteed, or securitized at such time 
by the corporation and on which MERS is the named mortgagee or 
mortgagee of record shall be assigned to the servicer, holder, or 
creditor, as defined by the guidelines of the corporation. The 
corporation shall not reimburse the servicer, holder, or creditor for 
any expense incurred in the carrying out or recording such an 
assignment.
    ``(C)(i) Except as provided in clause (ii), the period under this 
subparagraph is the 6-month period beginning on the date of the 
enactment of the Transparency and Security in Mortgage Registration Act 
of 2011.
    ``(ii) In the case of any mortgage owned, guaranteed, or 
securitized by the corporation for which the servicer, holder, or 
creditor has demonstrated to the corporation, in accordance with 
standards established by the Director of the Federal Housing Finance 
Agency, that compliance with subparagraph (B) by the expiration of such 
6-month period will cause a severe threat to the continued financial 
viability of such entity, the period under this subparagraph shall be 
the period that begins on such date of enactment and has such duration 
as determined by the corporation, in accordance with standards 
established by the Director, but in no case has a duration longer than 
12 months.
    ``(D) Not later than the expiration of the 6-month period referred 
to in subparagraph (C)(i), the corporation shall submit a report 
detailing its compliance with subparagraph (B) to the Congress, the 
Director of the Federal Housing Finance Agency, the Financial Stability 
Oversight Council, and the Director of the Bureau of Consumer Financial 
Protection of the Federal Reserve System, which shall describe any 
extensions of the period for compliance with subparagraph (B) granted 
pursuant to subparagraph (C).
    ``(E) For purposes of this paragraph, the following definitions 
shall apply:
            ``(i) The term `MERS' means the Mortgage Electronic 
        Registration Systems, Inc., or any successor entity of such 
        corporation.
            ``(ii) The term `MERS mortgage' means any mortgage--
                    ``(I) for which the MERS is, or was at any time, 
                the original or nominal mortgagee or mortgagee of 
                record under the mortgage;
                    ``(II) that is, or was at any time, assigned to or 
                recorded in the MERS; or
                    ``(III) for which the MERS is, or was at any time, 
                acting as nominee in the county land records for the 
                lender or servicer of the mortgage.''.
            (2) Freddie mac.--Section 305(a) of the Federal Home Loan 
        Mortgage Corporation Act (12 U.S.C. 1454(a)) is amended by 
        adding at the end the following new paragraph:
    ``(6)(A) After the date of the enactment of the Transparency and 
Security in Mortgage Registration Act of 2011, the Corporation may not 
purchase, acquire, newly lend on the security of, newly invest in 
securities consisting of, or otherwise newly deal in any MERS mortgage 
or mortgages.
    ``(B) After the expiration of the period under subparagraph (C), 
MERS shall not be the named mortgagee or mortgagee of record on any 
mortgage owned, guaranteed, or securitized by the Corporation. Not 
later than the expiration of such period, the Corporation shall require 
that all mortgage loans owned, guaranteed, or securitized at such time 
by the Corporation and on which MERS is the named mortgagee or 
mortgagee of record shall be assigned to the servicer, holder, or 
creditor, as defined by the guidelines of the Corporation. The 
Corporation shall not reimburse the servicer, holder, or creditor for 
any expense incurred in the carrying out or recording such an 
assignment.
    ``(C)(i) Except as provided in clause (ii), the period under this 
subparagraph is the 6-month period beginning on the date of the 
enactment of the Transparency and Security in Mortgage Registration Act 
of 2011.
    ``(ii) In the case of any mortgage owned, guaranteed, or 
securitized by the Corporation for which the servicer, holder, or 
creditor has demonstrated to the Corporation, in accordance with 
standards established by the Director of the Federal Housing Finance 
Agency, that compliance with subparagraph (B) by the expiration of such 
6-month period will cause a severe threat to the continued financial 
viability of such entity, the period under this subparagraph shall be 
the period that begins on such date of enactment and has such duration 
as determined by the Corporation, in accordance with standards 
established by the Director, but in no case has a duration longer than 
12 months.
    ``(D) Not later than the expiration of the 6-month period referred 
to in subparagraph (C)(i), the Corporation shall submit a report 
detailing its compliance with subparagraph (B) to the Congress, the 
Director of the Federal Housing Finance Agency, the Financial Stability 
Oversight Council, and the Director of the Bureau of Consumer Financial 
Protection of the Federal Reserve System, which shall describe any 
extensions of the period for compliance with subparagraph (B) granted 
pursuant to subparagraph (C).
    ``(E) For purposes of this paragraph, the following definitions 
shall apply:
            ``(i) The term `MERS' means the Mortgage Electronic 
        Registration Systems, Inc., or any successor entity of such 
        corporation.
            ``(ii) The term `MERS mortgage' means any mortgage--
                    ``(I) for which the MERS is, or was at any time, 
                the original or nominal mortgagee or mortgagee of 
                record under the mortgage;
                    ``(II) that is, or was at any time, assigned to or 
                recorded in the MERS; or
                    ``(III) for which the MERS is, or was at any time, 
                acting as nominee in the county land records for the 
                lender or servicer of the mortgage.''.
            (3) Regulations.--Not later than the expiration of the 90-
        day period beginning on the date of the enactment of this Act, 
        the Director of the Federal Housing Finance Agency shall issue 
        any regulations necessary to carry out the amendments made by 
        paragraphs (1) and (2). In issuing such regulations, the 
        Director shall consult and coordinate with the Secretary of 
        Housing and Urban Development to ensure that the regulations 
        issued by the Director and the regulations issued by the 
        Secretary pursuant to subsection (b)(2) of this section are 
        uniform and consistent to maximum extent possible.
    (b) Ginnie Mae.--
            (1) Prohibition.--Section 302(c) of the National Housing 
        Act (12 U.S.C. 1717(c)) is amended by adding at the end the 
        following new paragraph:
    ``(6)(A) After the date of the enactment of the Transparency and 
Security in Mortgage Registration Act of 2011, the Association may not 
newly guarantee the payment of principal of or interest on any trust 
certificate or other security based or backed by a trust or pool that 
contains, or purchase or acquire, any MERS mortgage.
    ``(B)(i) After the expiration of the period under subparagraph (C), 
MERS shall not be the named mortgagee or mortgagee of record on any 
mortgage owned or held by the Association or on any mortgage contained 
in a pool backing or on which is based any trust certificate or other 
security the payment of principal of or interest on which is guaranteed 
by the Association.
    ``(ii) Not later than the expiration of such period, the 
Association shall require that all mortgage loans that are owned or 
held at such time by the Association, or that at such time are 
contained in a trust or pool backing or on which is based a trust 
certificate or other security the payment of principal of or interest 
on which is guaranteed by the Association, and on which MERS is the 
named mortgagee or mortgagee of record, shall be assigned to the 
servicer, holder, or creditor, as defined by the guidelines of the 
Association. The Association shall not reimburse the servicer, holder, 
or creditor for any expense incurred in the carrying out or recording 
such an assignment.
    ``(C)(i) Except as provided in clause (ii), the period under this 
subparagraph is the 6-month period beginning on the date of the 
enactment of the Transparency and Security in Mortgage Registration Act 
of 2011.
    ``(ii) In the case of any mortgage owned or held by the 
Association, or contained in a trust or pool backing or on which is 
based a trust certificate or other security the payment of principal of 
or interest on which is guaranteed by the Association, for which the 
servicer, holder, or creditor has demonstrated to the Association, in 
accordance with standards established by the Secretary, that compliance 
with subparagraph (B) by the expiration of such 6-month period will 
cause a severe threat to the continued financial viability of such 
entity, the period under this subparagraph shall be the period that 
begins on such date of enactment and has such duration as determined by 
the Association, in accordance with standards established by the 
Secretary, but in no case has a duration longer than 12 months.
    ``(D) Not later than the expiration of the 6-month period described 
in subparagraph (C)(i), the Association shall submit a report detailing 
its compliance with subparagraph (B) to the Congress, the Secretary, 
the Financial Stability Oversight Council, and the Director of the 
Bureau of Consumer Financial Protection of the Federal Reserve System, 
which shall describe any extensions of the period for compliance with 
subparagraph (B) granted pursuant to subparagraph (C).
    ``(E) For purposes of this paragraph, the following definitions 
shall apply:
            ``(i) The term `MERS' means the Mortgage Electronic 
        Registration Systems, Inc., or any successor entity of such 
        corporation.
            ``(ii) The term `MERS mortgage' means any mortgage--
                    ``(I) for which the MERS is, or was at any time, 
                the original or nominal mortgagee or mortgagee of 
                record under the mortgage;
                    ``(II) that is, or was at any time, assigned to or 
                recorded in the MERS; or
                    ``(III) for which the MERS is, or was at any time, 
                acting as nominee in the county land records for the 
                lender or servicer of the mortgage.''.
            (2) Regulations.--Not later than the expiration of the 90-
        day period beginning on the date of the enactment of this Act, 
        the Secretary of Housing and Urban Development shall issue any 
        regulations necessary to carry out the amendments made by 
        paragraphs (1) and (2). In issuing such regulations, the 
        Secretary shall consult and coordinate with the Director of the 
        Federal Housing Finance Agency to ensure that the regulations 
        issued by the Secretary and the regulations issued by the 
        Director pursuant to subsection (a)(3) of this section are 
        uniform and consistent to maximum extent possible.

SEC. 3. HUD STUDY.

    (a) Study.--The Secretary of Housing and Urban Development, in 
consultation with the Comptroller General of the United States, shall 
conduct a study to analyze and determine--
            (1) the impacts of the lack of electronic records and 
        uniform standards found in local land title recordation systems 
        currently used in the various States;
            (2) any progress States have made in developing electronic 
        land title recordation systems for their localities that 
        contain uniform standards, and any findings and conclusions and 
        best practices resulting from such development;
            (3) the current oversight role of the Federal Government in 
        the transfer and recordation of land titles;
            (4) opportunities, and the feasibility of such 
        opportunities, that may be present to leverage progress made by 
        some States and localities to create an electronic land title 
        recordation system, including through--
                    (A) a system that would maintain all previous 
                records of the land-property without invalidating, 
                interfering with, or preempting State real property law 
                governing the transfer and perfection of land title; 
                and
                    (B) further actions by the States or by the Federal 
                Government, or coordinated actions of both; and
            (5) the feasibility of creating a Federal land title 
        recordation system for property transfers that would maintain 
        all previous records of the land-property without invalidating, 
        interfering with, or preempting State real property law 
        governing the transfer and perfection of land title.
    (b) Report.--Not later than the expiration of the 12-month period 
beginning on the date of the enactment of this Act, the Secretary of 
Housing and Urban Development, in consultation with the Comptroller 
General of the United States, shall submit to the Congress a report on 
the results and findings of the study conducted under this section.
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