II 112th CONGRESS 2d Session S. 3520 IN THE SENATE OF THE UNITED STATES August 2, 2012 Mr. Merkley (for himself, Mr. Akaka, Mr. Begich, Mr. Blumenthal, Mr. Franken, Ms. Landrieu, Mr. Lautenberg, and Mr. Levin) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To require a portion of closing costs to be paid by the enterprises with respect to certain refinanced mortgage loans, and for other purposes.

1.

Short title

This Act may be cited as the Rebuilding Equity Act of 2012.

2.

Rebuilding equity program

(a)

In general

(1)

Voluntary program

The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation (in this Act referred to as the enterprises) shall each establish a voluntary program for borrowers described in paragraph (2), under which the enterprises shall pay not more than $1,000 of the closing costs associated with applying for and receiving the refinancing when the borrower agrees to refinance into a fully amortizing loan with a term of not longer than 20 years. (2)

Eligible borrowers

The program required by paragraph (1) shall be for any borrower— (A)who qualifies for the Home Affordable Refinance Program carried out by the enterprises; (B)whose subject property has a loan-to-value ratio of not less than 105 percent; and (C)who refinances from a loan with an original term of 30 years to a loan with a term of 20 years or less. (b)

Definitions

As used in this section, the following definitions shall apply: (1)

Loan-to-value ratio

The term loan-to-value ratio means the ratio of the amount of the primary mortgage on a property to the value of that property. (2)

Closing costs

The term closing costs— (A)means all reasonable and actual costs charged to the borrower by a third party to the refinancing transaction; (B)includes— (i)appraisal and inspection fees; (ii)fees associated with obtaining a borrower’s credit report; (iii)title insurance and title examination costs; (iv)attorneys’ fees associated with closing the transaction, other than attorneys’ fees associated with disputes arising out of the transaction or otherwise ancillary to closing the transaction; (v)document preparation costs, if completed by a third party not controlled by the lender; (vi)transfer stamps, recording fees, courier fees, wire transfer fees, and reconveyance fees; and (vii)test and certification fees; and (C)does not include any costs charged to the borrower by the lender, including— (i)lender application fees; and (ii)lender origination fees.