[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1375 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                S. 1375

  To require a portion of closing costs to be paid by the enterprises 
   with respect to certain refinanced mortgage loans, 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 require a portion of closing costs to be paid by the enterprises 
   with respect to certain refinanced mortgage loans, 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 Equity Act of 2013''.

SEC. 2. REBUILDING EQUITY PROGRAM.

    (a) Establishment of Voluntary Program.--
            (1) Establishment.--
                    (A) Payment of closing costs.--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 $1,000 toward 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.
                    (B) First year of program.--During the 12-month 
                period that begins on the date of enactment of this 
                Act, the amount of the closing costs that each 
                enterprise shall pay under the program shall not vary 
                based on the term of the mortgage that the borrower 
                agrees to refinance into.
                    (C) Subsequent years.--
                            (i) Annual recalculation of closing costs 
                        payment.--Upon the expiration of the 12-month 
                        period set forth under subparagraph (B), and 
                        for each of the next two 12-month periods 
                        thereafter, the Director of the Federal Housing 
                        Finance Agency--
                                    (I) shall adjust the amount of the 
                                portion of the closing costs that each 
                                enterprise will pay under the program--
                                            (aa) by an amount that 
                                        results in such program being 
                                        revenue neutral for such 12-
                                        month period; and
                                            (bb) based on economic 
                                        conditions generally affecting 
                                        the mortgage and housing 
                                        markets; and
                                    (II) may adjust the amount of the 
                                closing costs that each enterprise will 
                                pay under the program based on the term 
                                of the mortgage that the borrower 
                                agrees to refinance into.
                            (ii) Report.--The Director of the Federal 
                        Housing Finance Agency shall report any 
                        adjustments made pursuant to the requirements 
                        of clause (i) to the Chair and Ranking Member 
                        of the Committee on Banking, Housing, and Urban 
                        Affairs of the Senate and the Committee on 
                        Financial Services of the House of 
                        Representatives.
            (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) Sunset.--Each voluntary program under this section shall 
terminate on the date that is 3 years after the date of establishment 
of such program.
    (c) 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.
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