II 112th CONGRESS 2d Session S. 2072 IN THE SENATE OF THE UNITED STATES February 6, 2012 Mr. Franken (for himself and Mr. Blumenthal) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To discourage disincentives to the housing missions of government sponsored enterprises and require consistent putback risks at the enterprises to assist homeowners.

1.

Short title

This Act may be cited as the Helping Homeowners Refinance Act.

2.

Definitions

In this Act— (1)the term Director means the Director of the Federal Housing Finance Agency; (2)the term enterprise has the same meaning as in section 1303 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4502); and (3)the term putback risk means the probability that an enterprise would require a loan originator to repurchase a loan purchased by the enterprise.

3.

Financial disincentives

Not later than 30 days after the date of enactment of this Act, the Director shall promulgate rules prohibiting the enterprises from holding any possessory interest in or otherwise owning, in whole or in part, any financial market instrument that would, in the discretion of the Director, substantially reduce the financial incentive to carry out the statutory mission of the enterprises to provide liquidity, stability, and affordability to the United States housing market under the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1415 et seq.) and the Federal National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.).

4.

Government sponsored enterprises putback risk policies

(a)

In general

Not later than 30 days after the date of enactment of this Act, the Federal Home Loan Mortgage Corporation shall implement policies to reduce the putback risk, including any putback risk associated with loan refinancing, regardless of the loan-to-value ratio on that mortgage, to be consistent with those of the Federal National Mortgage Association in effect as of February 1, 2012. (b)

Applicability to financial institutions

The enterprises shall apply the same putback risks, including any putback risk identified in subsection (a), to all financial institutions that refinance mortgage loans owned or guaranteed by an enterprise, regardless of whether the loans being refinanced were originated by the same institution that is originating the new loan. (c)

Application of section

The policies implemented under subsection (a) and the provisions of subsection (b) shall only apply to loans with a resettlement date on or before May 31, 2009.

5.

Waiver authority

The Director may waive any rule under section 3 or the application of the putback risk described in section 4, if the Director certifies in writing to Congress that the safety and soundness of the enterprise is put at risk by the applicability of the putback risk.

6.

Rule of construction

Nothing in this Act shall be construed to affect, be applicable to, or include purchase money originations.

7.

Report to Congress

Not later than 24 months after the date of enactment of this Act, the Director shall submit a report to Congress on the implementation of the provisions of this Act.