[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1373 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                S. 1373

    To increase access to refinancing for homeowners, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 25, 2013

  Mr. Merkley introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
    To increase access to refinancing for homeowners, and for other 
                               purposes.

    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 ``Rebuilding American Homeownership 
Act of 2013''.

SEC. 2. DEFINITIONS.

    In this Act, the following definitions shall apply:
            (1) Current borrower.--The term ``current borrower'' means 
        a mortgagor that--
                    (A) has made each payment on an eligible mortgage, 
                within the month in which the payment was due, during 
                the 6-month period preceding the date of refinancing of 
                the eligible mortgage under this Act; and
                    (B) has not been more than 30 days delinquent on an 
                eligible mortgage more than once during the 1-year 
                period preceding the date of refinancing of the 
                mortgage under this Act.
            (2) Director.--The term ``Director'' means the Director of 
        the Federal Housing Finance Agency.
            (3) Eligible mortgage.--The term ``eligible mortgage''--
                    (A) means any mortgage that--
                            (i) is an existing first mortgage--
                                    (I) that was made for purchase of, 
                                or refinancing of another first 
                                mortgage, on a 1- to 4-family owner-
                                occupied dwelling, including a 
                                condominium or a share in a cooperative 
                                ownership housing association; and
                                    (II) with a current loan-to-value 
                                ratio in excess of 80 percent, but not 
                                greater than 140 percent;
                            (ii) was originated on or before May 31, 
                        2009;
                            (iii) is not owned or guaranteed by an 
                        enterprise; and
                            (iv) with respect to which, the mortgagor 
                        is a current borrower; and
                    (B) does not include any mortgage that is insured 
                or guaranteed by any program of the Federal Housing 
                Administration, the Department of Housing and Urban 
                Development, the Government National Mortgage 
                Association, the Department of Agriculture, or the 
                Department of Veterans Affairs.
            (4) Enterprise.--The term ``enterprise'' means the Federal 
        National Mortgage Association and the Federal Home Loan 
        Mortgage Corporation.
            (5) Guarantee fee.--The term ``guarantee fee'' has the same 
        meaning as in section 1327(a) of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 4547(a)).

SEC. 3. REFINANCING AUTHORITY.

    (a) Enterprise Refinancing Authority.--
            (1) Program.--Each enterprise shall establish and carry out 
        a program under this section to provide for the refinancing of 
        eligible mortgages.
            (2) Authority.--Notwithstanding any provision of the 
        Federal National Mortgage Association Charter Act (12 U.S.C. 
        1716 et seq.) and the Federal Home Loan Mortgage Corporation 
        Act (12 U.S.C. 1451 et seq.), in carrying out the refinancing 
        program required under paragraph (1), an enterprise may 
        purchase, guarantee, service, sell, lend on the security of, 
        refinance, or otherwise deal in eligible mortgages.
    (b) Implementation Authority.--
            (1) In general.--Subject to paragraph (2), each enterprise 
        may prescribe any requirements, terms, and conditions that such 
        enterprise determines necessary to carry out the refinancing 
        program required under subsection (a), including with respect 
        to any underwriting criteria, such as--
                    (A) verification of a borrower's employment, 
                income, reserves, and assets;
                    (B) a borrower's credit history;
                    (C) property valuation requirements;
                    (D) representations and warranties;
                    (E) eligible property type and occupancy 
                requirements; and
                    (F) continuation of the second-lien position, or 
                release, of any junior liens on the property.
            (2) Existing credit enhancements to be retained.--In order 
        to participate in the refinancing program required under 
        subsection (a), an eligible mortgage with existing credit 
        enhancement coverage must continue to maintain or otherwise 
        transfer such coverage to the new mortgage that is a result of 
        the refinancing of the eligible mortgage authorized by this 
        section.
            (3) Maximum term of the new mortgage.--The term of any new 
        mortgage that is a result of the refinancing of an eligible 
        mortgage authorized by this section shall not exceed 30 years.
            (4) Maximum loan amount.--The maximum original principal 
        obligation of any new mortgage that is a result of the 
        refinancing of an eligible mortgage authorized by this section 
        shall not exceed the limitation in law governing the maximum 
        original principal obligation on conventional mortgages that 
        may be purchased or guaranteed by an enterprise, as such law is 
        in effect on the date of the closing of the new mortgage.
    (c) Regulations.--The Director may issue any regulations, guidance, 
or directives necessary to carry out the refinancing program required 
under subsection (a).

SEC. 4. GUARANTEE FEES.

    (a) Requirement To Charge a Guarantee Fee.--Each enterprise shall 
charge a guarantee fee in connection with any guarantee of the timely 
payment of principal and interest on securities, notes, and other 
obligations based on or backed by eligible mortgages refinanced under 
this Act.
    (b) Amount.--
            (1) In general.--The amount of the guarantee fee required 
        to be charged by an enterprise pursuant to subsection (a) shall 
        be actuarially determined by the Director to cover the expected 
        risk of default on the pool of eligible mortgages refinanced 
        under this Act backing the security, note, or other obligation 
        to which the enterprises' guarantee applies.
            (2) Rule of construction.--In calculating the expected risk 
        of default pursuant to paragraph (1), the Director shall ensure 
        that any default probability assumptions used to model such 
        risk--
                    (A) are reasonable, including with respect to the 
                arrival rate of default and the magnitude risk of 
                default; and
                    (B) are not unduly weighted to cover historical 
                stress or crisis scenarios.
            (3) Prohibition on additional charges.--In determining the 
        amount of any guarantee fee required to be charged pursuant to 
        subsection (a), neither the Director nor an enterprise may 
        charge any additional fee, price adjustment, premium, or other 
        amount other than that which is determined in accordance with 
        paragraph (1).
            (4) Prohibition on offsets.--The Director shall prohibit an 
        enterprise from offsetting the cost of the guarantee fee 
        required to by charged pursuant to subsection (a) to mortgage 
        originators, borrowers, and investors by decreasing other 
        charges, fees, or premiums, or in any other manner.
    (c) Authority To Limit Offer of Guarantee.--The Director shall 
prohibit an enterprise from consummating any offer for a guarantee on 
any security, note, or other obligation based on or backed by eligible 
mortgages refinanced under this Act, if the guarantee is inconsistent 
with the requirements of this section.

SEC. 5. REPORTS.

    The Director shall include, in the annual report submitted to the 
Congress pursuant to section 1319B of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4521), 
information on the use and impact of the program established under 
section 3. The information provided shall include--
            (1) a review and analysis of the effectiveness of the 
        program in--
                    (A) reducing the rate of mortgage default and 
                delinquency;
                    (B) preventing foreclosure; and
                    (C) supporting stable homeownership; and
            (2) any recommendations the Director considers appropriate 
        regarding the program.

SEC. 6. SUNSET.

    (a) Termination.--The provisions of this Act, and any program or 
authorities established or granted therein or derived therefrom, shall 
terminate on December 31, 2014.
    (b) Extension.--The Director, upon transmission of a written 
notification to Congress, may extend the authorities provided under 
this Act for a 1-year period.
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