Congressional Record, Volume 153 Issue 175 (Tuesday, November 13, 2007)

[Congressional Record Volume 153, Number 175 (Tuesday, November 13, 2007)]
[Senate]
[Pages S14287-S14300]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. BARRASSO (for himself and Mr. Enzi):
S. 2334. A bill to withhold 10 percent of the Federal funding
apportioned for highway construction and maintenance from States that
issue driver's licenses to individuals without verifying the legal
status of such individuals; read the first time.
Mr. BARRASSO. Mr. President, I would like to take a few minutes today
to discuss the issue of giving legal government documents to people who
are in the United States illegally.
There is no question our immigration process is broken. People who
attempt to enter the United States legally--to work, to join their
families--well, they often face bureaucratic redtape and incredible
delays. Legal entry into the United States has become more difficult as
a result of the events of September 11, 2001. There is no question that
should be the case.
Unfortunately, illegal entry remains a significant problem. It is
estimated that between 13 million and 20 million people are illegally
in the United States. The fact that the estimates are so far apart
should in and of itself give us all cause for concern.
What should also give us concern is that there are efforts in the
United States today to provide driver's licenses to those in this
country illegally. I believe such efforts are inappropriate and are a
serious threat to our national security.
There is no question that legally issuing driver's licenses or other
government documents to people who are here illegally puts our entire
Nation at risk. I am troubled by those who argue that we will be safer
if we provide official government papers to those who have come to our
country illegally. I believe this is the wrong path. It is the wrong
path for us to take, and it is contrary to the lessons we should have
learned from the events of September 11.
To receive a driver's license, any State used to require proof that
someone could drive and proof of identity through a legally issued
government document. This was often done through a notarized birth
certificate or a passport. Over time, criminals have found ways to
forge these documents, and they made it easier for individuals to
illegally acquire identification, such as a driver's license.
Some of the 9/11 hijackers had acquired identification documents
through forged papers. It should be a wake-up call to all of us. More
must be done to prevent this from happening in the future.
This past year, in the Wyoming State Senate, I worked with
Representative Pete Illoway to pass legislation making it a crime to
use false documents to conceal a person's identity, to conceal a
person's citizenship, or to conceal their resident alien status in
order to obtain public resources or public services. We specifically
identified driver's licenses in the law in Wyoming because of the
significance that document plays in allowing individuals to freely move
about the country. The bill was passed by the legislature and was
signed into law. The value of legally issued driver's licenses cannot
be underestimated in

[[Page S14288]]

maintaining our national security. In Wyoming, we get it.
I, along with many people in America, cannot understand the arguments
supporting the issuance of driver's licenses to illegal immigrants. To
me, giving driver's licenses to illegal immigrants will compromise our
national security.
We have an immediate situation before us where illegal immigrants in
certain parts of the country will be provided government documents that
will allow them to freely travel all across our great Nation. It is
inconceivable to me that this will make our Nation safer.
The Federal Government has a responsibility to secure our borders and
to secure the interior of the United States. Though that effort has
come up short over the years, it does not mean we should throw up our
hands and do nothing. I believe we must take action--aggressive
action--to address this issue.
Today, I am introducing a straightforward legislative proposal. It is
S. 2334. It is a straightforward legislative proposal to deal with
States that provide driver's licenses to those who are in our Nation
illegally. Simply stated, my legislation would require States to verify
lawful presence in the United States before granting a driver's
license. States that refuse would lose a part of their Federal
transportation funds, and those Federal transportation funds would then
be redistributed to the States that do follow the law.
I do not know if this is a perfect solution. I do know that issuing
driver's licenses to illegal immigrants is wrong. Rewarding illegal
immigrants--people who have broken into our country--with a driver's
license is a flawed idea. It is an idea that deserves Congress's
immediate attention. We cannot allow our country to go down this path.
The time for action is today.
______

By Ms. LANDRIEU:
S. 2335. A bill to amend the Robert T. Stafford Disaster Relief and
Emergency Assistance Act to provide adequate case management services;
to the Committee on Homeland Security and Governmental Affairs.
Ms. LANDRIEU. Mr. President, almost a year ago, we passed a Homeland
Security Appropriations bill. Included in that very large piece of
legislation was a small provision that probably went beneath most
people's notice.
Section 426 of that bill allows Federal funding to provide case
management services after a disaster. That has been a tragically absent
component to our circumstances in Louisiana. Educated people struggle
to find their way through the Byzantine morass that is FEMA individual
assistance program, the Small Business Administration's loan program,
the Road Home program and their own insurance company's requirements.
Think of how all of this seems to working people who are encountering
Federal bureaucracy for the first time.
So, we need case management badly. Unfortunately, Section 426 fails
the people of my State in two important ways. First, and this predates
the change in Congressional leadership, it allows for case management
services--but only for future disasters. The legislation that I am
introducing today makes Section 426 retroactive to 2005 and will now
cover Hurricanes Rita and Katrina, as well as succeeding disasters.
Two years after the disaster, we only distributed half of the Road
Home grants. It is obvious that we will need case management services
for years to come in Louisiana. It is only common sense to direct these
resources to the Gulf Coast today, where they are direly needed.
However, an equally important failing of Section 426 comes from its
implementation. In New Orleans and throughout the Gulf Coast, the
energy for the recovery effort has truly come from America's faith
community. You can see their good work in neighborhoods that are
returning in my hometown. You can see them with hammers and nails in
the Gulf Coast towns of Mississippi, and you can find them helping
thousands of victims of Katrina and Rita to navigate the bureaucratic
hurdles between them, and rebuilding their lives.
As we have not had the benefit of Government supported case
management, nonprofits and the faith-based community have stepped in to
fill the obvious void. Unfortunately, the same community that has been
such a lifeline to the people of the Gulf Coast has been barred from
competing for Federal funding under Section 426.
This is a shocking turnaround for an administration that has put so
much emphasis on including the faith-based community in Government
programming. I believe that the instinct to incorporate programs that
are organic to the community, and are already working, was a good one.
It is clear to me that case management services are prime examples of
programs that should incorporate the faith-based community.
So, as you can see, circumstances have compelled me to clarify
Congressional intent. The bill I am introducing today does two things.
First, it makes Section 426 retroactive to 2005, so that it may cover
Hurricanes Katrina and Rita. Secondly, it strikes the phrase
``qualified private organizations'' which has been misinterpreted to
exclude the faith-based community. That phrase has been replaced with
``nonprofit or faith-based organization with experience in case
management services.'' It is unfortunate that we have arrived at the
point where a legislative solution is needed. But nevertheless, I
believe that this legislation resolves the problem, and will give
comfort to the people of the Gulf Coast that Federal monies are being
spent wisely, and given to those that have shown themselves capable and
willing to help.
Mr. President, I ask unanimous consent that the text of the bill and
letters of support be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 2335

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 ``Case Management Services
Improvement Act of 2007''.

SEC. 2. CASE MANAGEMENT SERVICES.

(a) In General.--Section 426 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C.
5189d) is amended by striking ``qualified private
organizations'' and inserting ``nonprofit or faith-based
organizations with experience in case management services''.
(b) Applicability.--Section 426 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C.
5189d), as amended by this Act, shall apply to any major
disaster (as that term is defined in section 102 of the
Robert T. Stafford Disaster Relief and Emergency Assistance
Act (42 U.S.C. 5122)) declared on or after January 1, 2005.
____

United Methodist

Committee On Relief,

Washington, DC, October 25, 2007.
Hon. Mary Landrieu,
U.S. Senate,
Washington, DC.
Dear Senator Landrieu, I am writing on behalf of the United
Methodist Committee on Relief (UMCOR), to express my strong
support for the Case Management Services Improvement Act of
2007.
UMCOR is the not-for-profit global humanitarian aid
organization of the United Methodist Church, working in more
than 80 countries worldwide, For domestic disasters, UMCOR
maintains a corps of trained disaster response specialists
for quick reinforcement of local efforts, and keeps a supply
of relief materials in warehouses to be dispatched as
required. These practices proved invaluable in the aftermath
of Hurricane Katrina when, as one of the founding members of
the Katrina Aid Today (KAT) coalition, UMCOR played a vital
role in helping nearly 200,000 individuals rebuild their
lives. UMCOR also served as the KAT's fiscal agent,
overseeing the administration of over $70 million in federal
funding and an addition contribution of over $70 million in
private dollars to Hurricane Katrina's victims.
The broad language currently contained within the Robert T.
Stafford Disaster Relief and Emergency Assistance Act offers
federal funding to ``qualified private organizations'' to
provide case management services to individuals affected by
major disasters. Unfortunately, this language does not
recognize the extent to which organizations such as UMCOR
have efficiently and effectively provided these services in
the past. Through the Case Management Services Improvement
Act of 2007, you recognize and highlight the value of the
disaster-related case management services provided by
mission-driven, faith-based or non-profit organizations,
value that can not be duplicated by less-experienced, profit-
driven private companies.
Please let me know if the United Methodist Committee on
Relief, or the other members of Katrina Aid Today, can be of
any

[[Page S14289]]

assistance as you proceed in getting this important
legislation passed. Again, we appreciate the Introduction of
this significant bill.
Sincerely,

F. Thomas Hazelwood,

Assistant General Secretary,
UMCOR Emergency Services U.S.
____

October 25, 2007.
Hon. Mary Landrieu
U.S. Senate,
Washington, DC.
Dear Senator Landrieu, On behalf of Lutheran Disaster
Response, I am writing to express my full support for the
Case Management Services Improvement Act of 2007. This
legislation is of great importance to all individuals
affected by major disasters, as it will allow them to receive
case management services from the non-profit and faith-based
organizations that have a long and successful history of
carrying out these activities,
Lutheran Disaster Response (LDR) is a mission-driven
collaborative ministry of the Evangelical Lutheran Church in
America and The Lutheran Church-Missouri Synod. We have a
long history of effective case management following major
disasters, and in partnership with other faith-based, non-
profit voluntary organizations such as the United Methodist
Committee on Relief, played a vital role in helping nearly
200,000 individuals rebuild their lives in the aftermath of
Hurricane Katrina, This collaboration of non-profit voluntary
agencies, known as Katrina Aid Today, established a strong
partnership with FEMA and effectively administered over $70
million in federal funding to disaster victims. Additionally,
we matched this federal funding with another $70 million in
private dollars, providing a comprehensive continuum of care
that addressed the needs of each survivor,
As you know, the Robert T. Stafford Disaster Relief and
Emergency Assistance Act currently offers federal funding to
``qualified private organizations'' to provide case
management services to individuals affected by major
disasters, This broad language does not recognize the
organizations that have provided these services efficiently
in the past, such as Lutheran Disaster Response. Through the
Case Management Services Improvement Act of 2007, you
recognize and highlight the value of disaster-related case
management services provided by mission-driven, faith-based
or non-profit organizations, rather than leaving these vital
responsibilities to less- experienced private companies that
answer to shareholders,
Please let me know if Lutheran Disaster Response, or the
other members of Katrina Aid Today, can be of any assistance
as you proceed in getting this important legislation passed.
Again, we appreciate the introduction of this significant
bill.
Sincerely,

Heather Feltman,

Director,
Lutheran Disaster Response.
____

Katrina Aid Today,

Washington, DC, October 25, 2007.
Hon. Mary Landrieu,
U.S. Senate,
Washington, DC.
Dear Senator Landrieu: I am writing to express my full
support for the Case Management Services Improvement Act of
2007 on behalf of United Methodist Committee on Relief's
Katrina Aid Today program. This legislation is of great
importance to all individuals affected by major disasters, as
it will allow them to receive case management services from
the non-profit and faith-based organizations that have a long
and successful history of carrying out these activities.
Katrina Aid Today (KAT) is a consortium of 10 social
service and voluntary organizations, dedicated to helping
survivors navigate the system as they recovered from this
tragic disruption of their lives. Member organizations
include Catholic Charities USA, Lutheran Disaster Response,
Episcopal Relief & Development, the United Methodist
Committee on Relief, and the Salvation Army, among others.
Following Hurricane Katrina, KAT administered over $70
million in federal funding for disaster case management,
helping nearly 200,000 individuals rebuild their lives.
Additionally, the partner organizations within KAT matched
this federal funding with another $70 million in private
dollars, providing a comprehensive continuum of care that
addressed the needs of each survivor.
Currently, the Robert T. Stafford Disaster Relief and
Emergency Assistance Act overlooks the valuable work of the
faith-based organizations that have effectively provided
these services in the past, by broadly allowing ``qualified
private organizations'' to provide case management services
to individuals affected by major disasters. In the Case
Management Services Improvement Act of 2007, you recognize
the value in having disaster-related case management services
provided by mission-driven, faith-based or non-profit
organizations such as KAT, rather than leaving these vital
responsibilities to less-experienced private companies that
must answer to shareholders.
Please let us know if any of the members of Katrina Aid
Today can be of any assistance as you proceed in passing the
Case Management Services Improvement Act of 2007. Thank you
for your efforts and time on this matter.
Sincerely,

Jim Cox,

UMCOR,
Executive Director.
______

By Mrs. MURRAY (for herself and Ms. Cantwell):
S. 2336. A bill to designate the Port Angeles Federal Building in
Port Angeles, Washington, as the ``Richard B. Anderson Federal
Building''; to the Committee on Environment and Public Works.
Mrs. MURRAY. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 2336

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

SECTION 1. RICHARD B. ANDERSON FEDERAL BUILDING.

(a) Designation.--The Federal building located at 138 West
First Street, Port Angeles, Washington, shall be known and
designated as the ``Richard B. Anderson Federal Building''.
(b) References.--Any reference in a law, map, regulation,
document, paper, or other record of the United States to the
Federal building referred to in subsection (a) shall be
deemed to be a reference to the ``Richard B. Anderson Federal
Building''.
______

By Mr. GRASSLEY (for himself, Mrs. Lincoln, Ms. Snowe, Ms.
Stabenow, and Mr. Smith):
S. 2337. A bill to amend the Internal Revenue Code of 1986 to allow
long-term care insurance to be offered under cafeteria plans and
flexible spending arrangements and to provide additional consumer
protections for long-term care insurance; to the Committee on Finance.
Mr. GRASSLEY. Mr. President, Saturday, November 10, marked the last
day of Long-Term Care Awareness Week--this was a week where our Nation
recognized that now more than ever, Americans need to pay attention to
long-term care issues. My colleagues Senators Lincoln, Snowe, Stabenow,
Smith and I couldn't think of a better way to cap off the Week than by
introducing the Long-Term Care Affordability and Security Act of 2007.
Our Nation is graying. Research shows that the elderly population
will nearly double by 2030. By 2050, the population of those aged 85
and older will have grown by more than 300 percent. Research also shows
that the average age at which individuals need long-term care services,
such as home health care or a private room at a nursing home, is 75.
Currently, the average annual cost for a private room at a nursing home
is more than $75,000. This cost is expected to be in excess of $140,000
by 2030.
Based on these facts, we can see that our Nation needs to prepare its
citizens for the challenges they may face in old age. One way to
prepare for these challenges is by encouraging more Americans to obtain
long-term care insurance coverage. To date, only 10 percent of seniors
have long-term care insurance policies, and only 7 percent of all
private-sector employees are offered long-term care insurance as a
voluntary benefit.
Under current law, employees may pay for certain health-related
benefits, which may include health insurance premiums, co-pays, and
disability or life insurance, on a pre-tax basis under cafeteria plans
and flexible spending arrangements, FSAs. Essentially, an employee may
elect to reduce his or her annual salary to pay for these benefits, and
the employee doesn't pay taxes on the amounts used to pay these costs.
Employees, however, are explicitly prohibited from paying for the cost
of long-term care insurance coverage tax-free.
Our bill would allow employers, for the first time, to offer
qualified long-term care insurance to employees under FSAs and
cafeteria plans. This means employees would be permitted to pay for
qualified long-term care insurance premiums on a tax-free basis. This
would make it easier for employees to purchase long-term care
insurance, which many find unaffordable. This should also encourage
younger individuals to purchase long-term care insurance. The younger
the person is at the time the long-care insurance contract is
purchased, the lower the insurance premium.
An aging Nation has no time to waste in preparing for long-term care,
and the need to help people afford long-term care is more pressing than
ever. I look forward to working with Senators Lincoln, Snowe, Stabenow,
Smith and

[[Page S14290]]

all of our Senate colleagues toward enacting the Long-Term Care
Affordability and Security Act of 2007.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 2337

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 ``Long-Term Care Affordability
and Security Act of 2007''.

SEC. 2. TREATMENT OF PREMIUMS ON QUALIFIED LONG-TERM CARE
INSURANCE CONTRACTS.

(a) In General.--
(1) Cafeteria plans.--The last sentence of section 125(f)
of the Internal Revenue Code of 1986 (defining qualified
benefits) is amended by inserting before the period at the
end ``; except that such term shall include the payment of
premiums for any qualified long-term care insurance contract
(as defined in section 7702B) to the extent the amount of
such payment does not exceed the eligible long-term care
premiums (as defined in section 213(d)(10)) for such
contract''.
(2) Flexible spending arrangements.--Section 106 of such
Code (relating to contributions by an employer to accident
and health plans) is amended by striking subsection (c) and
redesignating subsection (d) as subsection (c).
(b) Conforming Amendments.--
(1) Section 6041 of such Code is amended by adding at the
end the following new subsection:
``(h) Flexible Spending Arrangement Defined.--For purposes
of this section, a flexible spending arrangement is a benefit
program which provides employees with coverage under which--
``(1) specified incurred expenses may be reimbursed
(subject to reimbursement maximums and other reasonable
conditions), and
``(2) the maximum amount of reimbursement which is
reasonably available to a participant for such coverage is
less than 500 percent of the value of such coverage.

In the case of an insured plan, the maximum amount reasonably
available shall be determined on the basis of the underlying
coverage.''.
(2) The following sections of such Code are each amended by
striking ``section 106(d)'' and inserting ``section 106(c)'':
sections 223(b)(4)(B), 223(d)(4)(C), 223(f)(3)(B),
3231(e)(11), 3306(b)(18), 3401(a)(22), 4973(g)(1), and
4973(g)(2)(B)(i).
(3) Section 6041(f)(1) of such Code is amended by striking
``(as defined in section 106(c)(2))''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2006.

SEC. 3. ADDITIONAL CONSUMER PROTECTIONS FOR LONG-TERM CARE
INSURANCE.

(a) Additional Protections Applicable to Long-Term Care
Insurance.--Subparagraphs (A) and (B) of section 7702B(g)(2)
of the Internal Revenue Code of 1986 (relating to
requirements of model regulation and Act) are amended to read
as follows:
``(A) In general.--The requirements of this paragraph are
met with respect to any contract if such contract meets--
``(i) Model regulation.--The following requirements of the
model regulation:

``(I) Section 6A (relating to guaranteed renewal or
noncancellability), other than paragraph (5) thereof, and the
requirements of section 6B of the model Act relating to such
section 6A.
``(II) Section 6B (relating to prohibitions on limitations
and exclusions) other than paragraph (7) thereof.
``(III) Section 6C (relating to extension of benefits).
``(IV) Section 6D (relating to continuation or conversion
of coverage).
``(V) Section 6E (relating to discontinuance and
replacement of policies).
``(VI) Section 7 (relating to unintentional lapse).
``(VII) Section 8 (relating to disclosure), other than
sections 8F, 8G, 8H, and 8I thereof.
``(VIII) Section 11 (relating to prohibitions against post-
claims underwriting).
``(IX) Section 12 (relating to minimum standards).
``(X) Section 13 (relating to requirement to offer
inflation protection).
``(XI) Section 25 (relating to prohibition against
preexisting conditions and probationary periods in
replacement policies or certificates).
``(XII) The provisions of section 28 relating to contingent
nonforfeiture benefits, if the policyholder declines the
offer of a nonforfeiture provision described in paragraph (4)
of this subsection.

``(ii) Model act.--The following requirements of the model
Act:

``(I) Section 6C (relating to preexisting conditions).
``(II) Section 6D (relating to prior hospitalization).
``(III) The provisions of section 8 relating to contingent
nonforfeiture benefits, if the policyholder declines the
offer of a nonforfeiture provision described in paragraph (4)
of this subsection.

``(B) Definitions.--For purposes of this paragraph--
``(i) Model regulation.--The term `model regulation' means
the long-term care insurance model regulation promulgated by
the National Association of Insurance Commissioners (as
adopted as of December 2006).
``(ii) Model act.--The term `model Act' means the long-term
care insurance model Act promulgated by the National
Association of Insurance Commissioners (as adopted as of
December 2006).
``(iii) Coordination.--Any provision of the model
regulation or model Act listed under clause (i) or (ii) of
subparagraph (A) shall be treated as including any other
provision of such regulation or Act necessary to implement
the provision.
``(iv) Determination.--For purposes of this section and
section 4980C, the determination of whether any requirement
of a model regulation or the model Act has been met shall be
made by the Secretary.''.
(b) Excise Tax.--Paragraph (1) of section 4980C(c) of the
Internal Revenue Code of 1986 (relating to requirements of
model provisions) is amended to read as follows:
``(1) Requirements of model provisions.--
``(A) Model regulation.--The following requirements of the
model regulation must be met:
``(i) Section 9 (relating to required disclosure of rating
practices to consumer).
``(ii) Section 14 (relating to application forms and
replacement coverage).
``(iii) Section 15 (relating to reporting requirements).
``(iv) Section 22 (relating to filing requirements for
marketing).
``(v) Section 23 (relating to standards for marketing),
including inaccurate completion of medical histories, other
than paragraphs (1), (6), and (9) of section 23C.
``(vi) Section 24 (relating to suitability).
``(vii) Section 27 (relating to the right to reduce
coverage and lower premiums).
``(viii) Section 31 (relating to standard format outline of
coverage).
``(ix) Section 32 (relating to requirement to deliver
shopper's guide).

The requirements referred to in clause (vi) shall not include
those portions of the personal worksheet described in
Appendix B relating to consumer protection requirements not
imposed by section 4980C or 7702B.
``(B) Model act.--The following requirements of the model
Act must be met:
``(i) Section 6F (relating to right to return).
``(ii) Section 6G (relating to outline of coverage).
``(iii) Section 6H (relating to requirements for
certificates under group plans).
``(iv) Section 6J (relating to policy summary).
``(v) Section 6K (relating to monthly reports on
accelerated death benefits).
``(vi) Section 7 (relating to incontestability period).
``(vii) Section 9 (relating to producer training
requirements).
``(C) Definitions.--For purposes of this paragraph, the
terms `model regulation' and `model Act' have the meanings
given such terms by section 7702B(g)(2)(B).''.
(c) Effective Date.--The amendments made by this section
shall apply to policies issued more than 1 year after the
date of the enactment of this Act.
______

By Mr. REID (for Mr. Dodd):
S. 2338. An original bill to modernize and update the National
Housing Act and enable the Federal Housing Administration to more
effectively reach underserved borrowers, and for other purposes; from
the Committee on Banking, Housing, and Urban Affairs; placed on the
calendar.
Mr. DODD. Mr. President, today I come to the floor to report the FHA
Modernization Act of 2007. This is vitally important legislation, and I
want to take a moment to express my thanks to Senator Martinez for his
very close collaboration and support in putting this legislation
together. This is an original bill produced by the Senate Banking
Committee, and as such, the rules prohibit us from obtaining
cosponsors. However, I would like to recognize Senators Reed, Schumer,
Bayh, Menendez, Brown, Kerry, Murray, Whitehouse, Martinez, Voinovich,
Cornyn, and Coleman for their support of this bill and for their offers
of cosponsorship.
The mortgage markets--particularly the subprime market--are in the
midst of a meltdown. Historically high default and foreclosure rates
generated, in significant part, by abusive and predatory lending
practices, are threatening millions of American families with the loss
of their most significant financial asset--their homes--at a cost of
over $160 billion in home equity, according to testimony presented
before the Banking Committee.
While these problems are addressed, we need to make sure that credit
is available, including for subprime borrowers, on fair terms so that
the people of this country have an opportunity to build wealth for the
future.
A revitalized, strengthened, and modernized FHA can be and, under
this legislation, will be a source of this constructive, wealth-
building credit, both

[[Page S14291]]

for new homeowners and for people who are seeking a way out of the
abusive loans in which they are currently trapped.
In short, by providing low-cost credit, without prepayment penalties,
without teaser rates, and without other deceptive terms, FHA is a part
of the solution to the predatory lending crisis we are experiencing.
Moreover, FHA has traditionally been an important tool for creating
new minority homeowners, and for lower-, moderate-, and middle-income
families to become homeowners. By modernizing FHA, we will help
millions of families achieve their American Dream. FHA is in a strong
position to play this role: an independent audit report indicates that
FHA has a record $22 billion in capital, and a capital ratio, 6.82
percent, that is more than three times higher the mandated level of 2
percent.
The bill passed by the Committee, and which is being filed today does
a number of important things: it raises FHA loan limits so that the
program can reach many more people; it lowers downpayment requirements,
while still ensuring that people will have a real stake in their new
homes; it expands the reverse mortgage program for elderly homeowners
by both raising the loan limit and removing the current cap on the
number of these mortgages FHA can insure. I know Senators Reed, Crapo,
and Allard strongly support this program; it reduces the origination
fee that elderly homeowners can be charged for these mortgages by one-
quarter, from 2 percent to 1.5 percent making it more affordable for
seniors to take out these loans; and, it includes a major overhaul of
FHA's manufactured housing program, authored by our colleagues Senators
Bayh and Allard.
Taken together, these changes will help make FHA a more relevant and
effective program. This legislation is supported by the Mortgage
Bankers Association, the National Association of Home Builders, the
National Association of Realtors, AARP, the Manufactured Housing
Association, the Manufactured Housing Institute, and others. I urge my
colleagues to support this bill.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
placed in the Record, as follows:

S. 2338

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``FHA
Modernization Act of 2007''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title and table of contents.

TITLE I--BUILDING AMERICAN HOMEOWNERSHIP

Sec. 101. Short title.
Sec. 102. Maximum principal loan obligation.
Sec. 103. Cash investment requirement and prohibition of seller-funded
downpayment assistance.
Sec. 104. Mortgage insurance premiums.
Sec. 105. Rehabilitation loans.
Sec. 106. Discretionary action.
Sec. 107. Insurance of condominiums.
Sec. 108. Mutual Mortgage Insurance Fund.
Sec. 109. Hawaiian home lands and Indian reservations.
Sec. 110. Conforming and technical amendments.
Sec. 111. Insurance of mortgages.
Sec. 112. Home equity conversion mortgages.
Sec. 113. Energy efficient mortgages program.
Sec. 114. Pilot program for automated process for borrowers without
sufficient credit history.
Sec. 115. Homeownership preservation.
Sec. 116. Use of FHA savings for improvements in FHA technologies,
procedures, processes, program performance, staffing, and
salaries.
Sec. 117. Post-purchase housing counseling eligibility improvements.
Sec. 118. Pre-purchase homeownership counseling demonstration.
Sec. 119. Fraud Prevention.
Sec. 120. Limitation on mortgage insurance premium increases.
Sec. 121. Savings provision.
Sec. 122. Implementation.

TITLE II--MANUFACTURED HOUSING LOAN MODERNIZATION

Sec. 201. Short title.
Sec. 202. Purposes.
Sec. 203. Exception to limitation on financial institution portfolio.
Sec. 204. Insurance benefits.
Sec. 205. Maximum loan limits.
Sec. 206. Insurance premiums.
Sec. 207. Technical corrections.
Sec. 208. Revision of underwriting criteria.
Sec. 209. Prohibition against kickbacks and unearned fees.
Sec. 210. Leasehold requirements.

TITLE I--BUILDING AMERICAN HOMEOWNERSHIP

SEC. 101. SHORT TITLE.

This title may be cited as the ``Building American
Homeownership Act of 2007''.

SEC. 102. MAXIMUM PRINCIPAL LOAN OBLIGATION.

Paragraph (2) of section 203(b)(2) of the National Housing
Act (12 U.S.C. 1709(b)(2)) is amended--
(1) by amending subparagraphs (A) and (B) to read as
follows:
``(A) not to exceed the lesser of--
``(i) in the case of a 1-family residence, the median 1-
family house price in the area, as determined by the
Secretary; and in the case of a 2-, 3-, or 4-family
residence, the percentage of such median price that bears the
same ratio to such median price as the dollar amount
limitation in effect under section 305(a)(2) of the Federal
Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for
a 2-, 3-, or 4-family residence, respectively, bears to the
dollar amount limitation in effect under such section for a
1-family residence; or
``(ii) the dollar amount limitation determined under such
section 305(a)(2) for a residence of the applicable size;

except that the dollar amount limitation in effect for any
area under this subparagraph may not be less than the greater
of (I) the dollar amount limitation in effect under this
section for the area on October 21, 1998, or (II) 65 percent
of the dollar limitation determined under such section
305(a)(2) for a residence of the applicable size; and
``(B) not to exceed 100 percent of the appraised value of
the property.''; and
(2) in the matter following subparagraph (B), by striking
the second sentence (relating to a definition of ``average
closing cost'') and all that follows through ``section
3103A(d) of title 38, United States Code.''.

SEC. 103. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF
SELLER-FUNDED DOWNPAYMENT ASSISTANCE.

Paragraph 9 of section 203(b) of the National Housing Act
(12 U.S.C. 1709(b)(9)) is amended to read as follows:
``(9) Cash investment requirement.--
``(A) In general.--A mortgage insured under this section
shall be executed by a mortgagor who shall have paid, in
cash, on account of the property an amount equal to not less
than 1.5 percent of the appraised value of the property or
such larger amount as the Secretary may determine.
``(B) Family members.--For purposes of this paragraph, the
Secretary shall consider as cash or its equivalent any
amounts borrowed from a family member (as such term is
defined in section 201), subject only to the requirements
that, in any case in which the repayment of such borrowed
amounts is secured by a lien against the property, that--
``(i) such lien shall be subordinate to the mortgage; and
``(ii) the sum of the principal obligation of the mortgage
and the obligation secured by such lien may not exceed 100
percent of the appraised value of the property.
``(C) Prohibited sources.--In no case shall the funds
required by subparagraph (A) consist, in whole or in part, of
funds provided by any of the following parties before,
during, or after closing of the property sale:
``(i) The seller or any other person or entity that
financially benefits from the transaction.
``(ii) Any third party or entity that is reimbursed,
directly or indirectly, by any of the parties described in
clause (i).''.

SEC. 104. MORTGAGE INSURANCE PREMIUMS.

Section 203(c)(2) of the National Housing Act (12 U.S.C.
1709(c)(2)) is amended--
(1) in the matter preceding subparagraph (A), by striking
``or of the General Insurance Fund'' and all that follows
through ``section 234(c),,''; and
(2) in subparagraph (A)--
(A) by striking ``2.25 percent'' and inserting ``3
percent''; and
(B) by striking ``2.0 percent'' and inserting ``2.75
percent''.

SEC. 105. REHABILITATION LOANS.

Subsection (k) of section 203 of the National Housing Act
(12 U.S.C. 1709(k)) is amended--
(1) in paragraph (1), by striking ``on'' and all that
follows through ``1978''; and
(2) in paragraph (5)--
(A) by striking ``General Insurance Fund'' the first place
it appears and inserting ``Mutual Mortgage Insurance Fund'';
and
(B) in the second sentence, by striking the comma and all
that follows through ``General Insurance Fund''.

SEC. 106. DISCRETIONARY ACTION.

The National Housing Act is amended--
(1) in subsection (e) of section 202 (12 U.S.C. 1708(e))--
(A) in paragraph (3)(B), by striking ``section 202(e) of
the National Housing Act'' and inserting ``this subsection'';
and
(B) by redesignating such subsection as subsection (f);
(2) by striking paragraph (4) of section 203(s) (12 U.S.C.
1709(s)(4)) and inserting the following new paragraph:
``(4) the Secretary of Agriculture;''; and
(3) by transferring subsection (s) of section 203 (as
amended by paragraph (2) of this section) to section 202,
inserting such subsection after subsection (d) of section
202,

[[Page S14292]]

and redesignating such subsection as subsection (e).

SEC. 107. INSURANCE OF CONDOMINIUMS.

(a) In General.--Section 234 of the National Housing Act
(12 U.S.C. 1715y) is amended--
(1) in subsection (c), in the first sentence--
(A) by striking ``and'' before ``(2)''; and
(B) by inserting before the period at the end the
following: ``, and (3) the project has a blanket mortgage
insured by the Secretary under subsection (d)''; and
(2) in subsection (g), by striking ``, except that'' and
all that follows and inserting a period.
(b) Definition of Mortgage.--Section 201(a) of the National
Housing Act (12 U.S.C. 1707(a)) is amended--
(1) before ``a first mortgage'' insert ``(A)'';
(2) by striking ``or on a leasehold (1)'' and inserting
``(B) a first mortgage on a leasehold on real estate (i)'';
(3) by striking ``or (2)'' and inserting ``, or (ii)''; and
(4) by inserting before the semicolon the following: ``, or
(C) a first mortgage given to secure the unpaid purchase
price of a fee interest in, or long-term leasehold interest
in, real estate consisting of a one-family unit in a
multifamily project, including a project in which the
dwelling units are attached, or are manufactured housing
units, semi-detached, or detached, and an undivided interest
in the common areas and facilities which serve the project''.
(c) Definition of Real Estate.--Section 201 of the National
Housing Act (12 U.S.C. 1707) is amended by adding at the end
the following new subsection:
``(g) The term `real estate' means land and all natural
resources and structures permanently affixed to the land,
including residential buildings and stationary manufactured
housing. The Secretary may not require, for treatment of any
land or other property as real estate for purposes of this
title, that such land or property be treated as real estate
for purposes of State taxation.''.

SEC. 108. MUTUAL MORTGAGE INSURANCE FUND.

(a) In General.--Subsection (a) of section 202 of the
National Housing Act (12 U.S.C. 1708(a)) is amended to read
as follows:
``(a) Mutual Mortgage Insurance Fund.--
``(1) Establishment.--Subject to the provisions of the
Federal Credit Reform Act of 1990, there is hereby created a
Mutual Mortgage Insurance Fund (in this title referred to as
the `Fund'), which shall be used by the Secretary to carry
out the provisions of this title with respect to mortgages
insured under section 203. The Secretary may enter into
commitments to guarantee, and may guarantee, such insured
mortgages.
``(2) Limit on loan guarantees.--The authority of the
Secretary to enter into commitments to guarantee such insured
mortgages shall be effective for any fiscal year only to the
extent that the aggregate original principal loan amount
under such mortgages, any part of which is guaranteed, does
not exceed the amount specified in appropriations Acts for
such fiscal year.
``(3) Fiduciary responsibility.--The Secretary has a
responsibility to ensure that the Mutual Mortgage Insurance
Fund remains financially sound.
``(4) Annual independent actuarial study.--The Secretary
shall provide for an independent actuarial study of the Fund
to be conducted annually, which shall analyze the financial
position of the Fund. The Secretary shall submit a report
annually to the Congress describing the results of such study
and assessing the financial status of the Fund. The report
shall recommend adjustments to underwriting standards,
program participation, or premiums, if necessary, to ensure
that the Fund remains financially sound.
``(5) Quarterly reports.--During each fiscal year, the
Secretary shall submit a report to the Congress for each
calendar quarter, which shall specify for mortgages that are
obligations of the Fund--
``(A) the cumulative volume of loan guarantee commitments
that have been made during such fiscal year through the end
of the quarter for which the report is submitted;
``(B) the types of loans insured, categorized by risk;
``(C) any significant changes between actual and projected
claim and prepayment activity;
``(D) projected versus actual loss rates; and
``(E) updated projections of the annual subsidy rates to
ensure that increases in risk to the Fund are identified and
mitigated by adjustments to underwriting standards, program
participation, or premiums, and the financial soundness of
the Fund is maintained.

The first quarterly report under this paragraph shall be
submitted on the last day of the first quarter of fiscal year
2008, or on the last day of the first full calendar quarter
following the enactment of the Building American
Homeownership Act of 2007, whichever is later.
``(6) Adjustment of premiums.--If, pursuant to the
independent actuarial study of the Fund required under
paragraph (4), the Secretary determines that the Fund is not
meeting the operational goals established under paragraph (7)
or there is a substantial probability that the Fund will not
maintain its established target subsidy rate, the Secretary
may either make programmatic adjustments under this title as
necessary to reduce the risk to the Fund, or make appropriate
premium adjustments.
``(7) Operational goals.--The operational goals for the
Fund are--
``(A) to minimize the default risk to the Fund and to
homeowners by among other actions instituting fraud
prevention quality control screening not later than 18 months
after the date of enactment of the Building American
Homeownership Act of 2007; and
``(B) to meet the housing needs of the borrowers that the
single family mortgage insurance program under this title is
designed to serve.''.
(b) Obligations of Fund.--The National Housing Act is
amended as follows:
(1) Homeownership voucher program mortgages.--In section
203(v) (12 U.S.C. 1709(v))--
(A) by striking ``Notwithstanding section 202 of this
title, the'' and inserting ``The''; and
(B) by striking ``General Insurance Fund'' the first place
such term appears and all that follows through the end of the
subsection and inserting ``Mutual Mortgage Insurance Fund.''.
(2) Home equity conversion mortgages.--Section 255(i)(2)(A)
of the National Housing Act (12 U.S.C. 1715z-20(i)(2)(A)) is
amended by striking ``General Insurance Fund'' and inserting
``Mutual Mortgage Insurance Fund''.
(c) Conforming Amendments.--The National Housing Act is
amended--
(1) in section 205 (12 U.S.C. 1711), by striking
subsections (g) and (h); and
(2) in section 519(e) (12 U.S.C. 1735c(e)), by striking
``203(b)'' and all that follows through ``203(i)'' and
inserting ``203, except as determined by the Secretary''.

SEC. 109. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.

(a) Hawaiian Home Lands.--Section 247(c) of the National
Housing Act (12 U.S.C. 1715z-12(c)) is amended--
(1) by striking ``General Insurance Fund established in
section 519'' and inserting ``Mutual Mortgage Insurance
Fund''; and
(2) in the second sentence, by striking ``(1) all
references'' and all that follows through ``and (2)''.
(b) Indian Reservations.--Section 248(f) of the National
Housing Act (12 U.S.C. 1715z-13(f)) is amended--
(1) by striking ``General Insurance Fund'' the first place
it appears through ``519'' and inserting ``Mutual Mortgage
Insurance Fund''; and
(2) in the second sentence, by striking ``(1) all
references'' and all that follows through ``and (2)''.

SEC. 110. CONFORMING AND TECHNICAL AMENDMENTS.

(a) Repeals.--The following provisions of the National
Housing Act are repealed:
(1) Subsection (i) of section 203 (12 U.S.C. 1709(i)).
(2) Subsection (o) of section 203 (12 U.S.C. 1709(o)).
(3) Subsection (p) of section 203 (12 U.S.C. 1709(p)).
(4) Subsection (q) of section 203 (12 U.S.C. 1709(q)).
(5) Section 222 (12 U.S.C. 1715m).
(6) Section 237 (12 U.S.C. 1715z-2).
(7) Section 245 (12 U.S.C. 1715z-10).
(b) Definition of Area.--Section 203(u)(2)(A) of the
National Housing Act (12 U.S.C. 1709(u)(2)(A)) is amended by
striking ``shall'' and all that follows and inserting ``means
a metropolitan statistical area as established by the Office
of Management and Budget;''.
(c) Definition of State.--Section 201(d) of the National
Housing Act (12 U.S.C. 1707(d)) is amended by striking ``the
Trust Territory of the Pacific Islands'' and inserting ``the
Commonwealth of the Northern Mariana Islands''.

SEC. 111. INSURANCE OF MORTGAGES.

Subsection (n)(2) of section 203 of the National Housing
Act (12 U.S.C. 1709(n)(2)) is amended--
(1) in subparagraph (A), by inserting ``or subordinate
mortgage or'' before ``lien given''; and
(2) in subparagraph (C), by inserting ``or subordinate
mortgage or'' before ``lien''.

SEC. 112. HOME EQUITY CONVERSION MORTGAGES.

(a) In General.--Section 255 of the National Housing Act
(12 U.S.C. 1715z-20) is amended--
(1) in subsection (b)(2), insert `` `real estate,' '' after
`` `mortgagor','';
(2) in subsection (g)--
(A) by striking the first sentence; and
(B) by striking ``established under section 203(b)(2)'' and
all that follows through ``located'' and inserting
``limitation established under section 305(a)(2) of the
Federal Home Loan Mortgage Corporation Act for a 1-family
residence'';
(3) in subsection (i)(1)(C), by striking ``limitations''
and inserting ``limitation''; and
(4) by adding at the end the following new subsection:
``(o) Authority To Insure Home Purchase Mortgage.--
``(1) In general.--Notwithstanding any other provision of
this section, the Secretary may insure, upon application by a
mortgagee, a home equity conversion mortgage upon such terms
and conditions as the Secretary may prescribe, when the home
equity conversion mortgage will be used to purchase a 1- to
4-family dwelling unit, one unit of which that the mortgagor
will occupy as a primary residence, and to provide for any
future payments to the mortgagor, based on available equity,
as authorized under subsection (d)(9).

[[Page S14293]]

``(2) Limitation on principal obligation.--A home equity
conversion mortgage insured pursuant to paragraph (1) shall
involve a principal obligation that does not exceed the
dollar amount limitation determined under section 305(a)(2)
of the Federal Home Loan Mortgage Corporation Act for a 1-
family residence.''.
(b) Mortgages for Cooperatives.--Subsection (b) of section
255 of the National Housing Act (12 U.S.C. 1715z-20(b)) is
amended--
(1) in paragraph (4)--
(A) by inserting ``a first or subordinate mortgage or
lien'' before ``on all stock'';
(B) by inserting ``unit'' after ``dwelling''; and
(C) by inserting ``a first mortgage or first lien'' before
``on a leasehold''; and
(2) in paragraph (5), by inserting ``a first or subordinate
lien on'' before ``all stock''.
(c) Limitation on Origination Fees.--Section 255 of the
National Housing Act (12 U.S.C. 1715z-20), as amended by the
preceding provisions of this section, is further amended--
(1) by redesignating subsections (k), (l), and (m) as
subsections (l), (m), and (n), respectively; and
(2) by inserting after subsection (j) the following new
subsection:
``(k) Limitation on Origination Fees.--The Secretary shall
establish limits on the origination fee that may be charged
to a mortgagor under a mortgage insured under this section,
which limitations shall--
``(1) equal 1.5 percent of the maximum claim amount of the
mortgage unless adjusted thereafter on the basis of--
``(A) the costs to the mortgagor; and
``(B) the impact of such fees on the reverse mortgage
market;
``(2) be subject to a minimum allowable amount;
``(3) provide that the origination fee may be fully
financed with the mortgage;
``(4) include any fees paid to correspondent mortgagees
approved by the Secretary; and
``(5) have the same effective date as subsection (o)(2)
regarding the limitation on principal obligation.''.
(d) Study Regarding Program Costs and Credit
Availability.--
(1) In general.--The Comptroller General of the United
States shall conduct a study regarding the costs and
availability of credit under the home equity conversion
mortgages for elderly homeowners program under section 255 of
the National Housing Act (12 U.S.C. 1715z-20) (in this
subsection referred to as the ``program'').
(2) Purpose.--The purpose of the study required under
paragraph (1) is to help Congress analyze and determine the
effects of limiting the amounts of the costs or fees under
the program from the amounts charged under the program as of
the date of the enactment of this Act.
(3) Content of report.--The study required under paragraph
(1) should focus on--
(A) the cost to mortgagors of participating in the program;
(B) the financial soundness of the program;
(C) the availability of credit under the program; and
(D) the costs to elderly homeowners participating in the
program, including--
(i) mortgage insurance premiums charged under the program;
(ii) up-front fees charged under the program; and
(iii) margin rates charged under the program.
(4) Timing of report.--Not later than 12 months after the
date of the enactment of this Act, the Comptroller General
shall submit a report to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives setting
forth the results and conclusions of the study required under
paragraph (1).

SEC. 113. ENERGY EFFICIENT MORTGAGES PROGRAM.

Section 106(a)(2) of the Energy Policy Act of 1992 (42
U.S.C. 12712 note) is amended--
(1) by amending subparagraph (C) to read as follows:
``(C) Costs of improvements.--The cost of cost-effective
energy efficiency improvements shall not exceed the greater
of--
``(i) 5 percent of the property value (not to exceed 5
percent of the limit established under section 203(b)(2)(A))
of the National Housing Act (12 U.S.C. 1709(b)(2)(A); or
``(ii) 2 percent of the limit established under section
203(b)(2)(B) of such Act.''; and
(2) by adding at the end the following:
``(D) Limitation.--In any fiscal year, the aggregate number
of mortgages insured pursuant to this section may not exceed
5 percent of the aggregate number of mortgages for 1- to 4-
family residences insured by the Secretary of Housing and
Urban Development under title II of the National Housing Act
(12 U.S.C. 1707 et seq.) during the preceding fiscal year.''.

SEC. 114. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS
WITHOUT SUFFICIENT CREDIT HISTORY.

(a) Establishment.--Title II of the National Housing Act
(12 U.S.C. 1707 et seq.) is amended by adding at the end the
following new section:

``SEC. 257. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS
WITHOUT SUFFICIENT CREDIT HISTORY.

``(a) Establishment.--The Secretary shall carry out a pilot
program to establish, and make available to mortgagees, an
automated process for providing alternative credit rating
information for mortgagors and prospective mortgagors under
mortgages on 1- to 4-family residences to be insured under
this title who have insufficient credit histories for
determining their creditworthiness. Such alternative credit
rating information may include rent, utilities, and insurance
payment histories, and such other information as the
Secretary considers appropriate.
``(b) Scope.--The Secretary may carry out the pilot program
under this section on a limited basis or scope, and may
consider limiting the program to first-time homebuyers.
``(c) Limitation.--In any fiscal year, the aggregate number
of mortgages insured pursuant to the automated process
established under this section may not exceed 5 percent of
the aggregate number of mortgages for 1- to 4-family
residences insured by the Secretary under this title during
the preceding fiscal year.
``(d) Sunset.--After the expiration of the 5-year period
beginning on the date of the enactment of the Building
American Homeownership Act of 2007, the Secretary may not
enter into any new commitment to insure any mortgage, or
newly insure any mortgage, pursuant to the automated process
established under this section.''.
(b) GAO Report.--Not later than the expiration of the two-
year period beginning on the date of the enactment of this
title, the Comptroller General of the United States shall
submit to the Congress a report identifying the number of
additional mortgagors served using the automated process
established pursuant to section 257 of the National Housing
Act (as added by the amendment made by subsection (a) of this
section) and the impact of such process and the insurance of
mortgages pursuant to such process on the safety and
soundness of the insurance funds under the National Housing
Act of which such mortgages are obligations.

SEC. 115. HOMEOWNERSHIP PRESERVATION.

The Secretary of Housing and Urban Development and the
Commissioner of the Federal Housing Administration, in
consultation with industry, the Neighborhood Reinvestment
Corporation, and other entities involved in foreclosure
prevention activities, shall--
(1) develop and implement a plan to improve the Federal
Housing Administration's loss mitigation process; and
(2) report such plan to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives.

SEC. 116. USE OF FHA SAVINGS FOR IMPROVEMENTS IN FHA
TECHNOLOGIES, PROCEDURES, PROCESSES, PROGRAM
PERFORMANCE, STAFFING, AND SALARIES.

(a) Authorization of Appropriations.--There is authorized
to be appropriated for each of fiscal years 2008 through
2012, $25,000,000, from negative credit subsidy for the
mortgage insurance programs under title II of the National
Housing Act, to the Secretary of Housing and Urban
Development for increasing funding for the purpose of
improving technology, processes, program performance,
eliminating fraud, and for providing appropriate staffing in
connection with the mortgage insurance programs under title
II of the National Housing Act.
(b) Certification.--The authorization under subsection (a)
shall not be effective for a fiscal year unless the Secretary
of Housing and Urban Development has, by rulemaking in
accordance with section 553 of title 5, United States Code
(notwithstanding subsections (a)(2), (b)(B), and (d)(3) of
such section), made a determination that--
(1) premiums being, or to be, charged during such fiscal
year for mortgage insurance under title II of the National
Housing Act are established at the minimum amount sufficient
to--
(A) comply with the requirements of section 205(f) of such
Act (relating to required capital ratio for the Mutual
Mortgage Insurance Fund); and
(B) ensure the safety and soundness of the other mortgage
insurance funds under such Act; and
(2) any negative credit subsidy for such fiscal year
resulting from such mortgage insurance programs adequately
ensures the efficient delivery and availability of such
programs.
(c) Study and Report.--The Secretary of Housing and Urban
Development shall conduct a study to obtain recommendations
from participants in the private residential (both single
family and multifamily) mortgage lending business and the
secondary market for such mortgages on how best to update and
upgrade processes and technologies for the mortgage insurance
programs under title II of the National Housing Act so that
the procedures for originating, insuring, and servicing of
such mortgages conform with those customarily used by
secondary market purchasers of residential mortgage loans.
Not later than the expiration of the 12-month period
beginning on the date of the enactment of this Act, the
Secretary shall submit a report to the Congress describing
the progress made and to be made toward updating and
upgrading such processes and technology, and providing
appropriate staffing for such mortgage insurance programs.

SEC. 117. POST-PURCHASE HOUSING COUNSELING ELIGIBILITY
IMPROVEMENTS.

Section 106(c)(4) of the Housing and Urban Development Act
of 1968 (12 U.S.C. 1701x(c)(4)) is amended:
(1) in subparagraph (C)--

[[Page S14294]]

(A) in clause (i), by striking ``; or'' and inserting a
semicolon;
(B) in clause (ii), by striking the period at the end and
inserting a semicolon; and
(C) by adding at the end the following:
``(iii) a significant reduction in the income of the
household due to divorce or death; or
``(iv) a significant increase in basic expenses of the
homeowner or an immediate family member of the homeowner
(including the spouse, child, or parent for whom the
homeowner provides substantial care or financial assistance)
due to--

``(I) an unexpected or significant increase in medical
expenses;
``(II) a divorce;
``(III) unexpected and significant damage to the property,
the repair of which will not be covered by private or public
insurance; or
``(IV) a large property-tax increase; or'';

(2) by striking the matter that follows subparagraph (C);
and
(3) by adding at the end the following:
``(D) the Secretary of Housing and Urban Development
determines that the annual income of the homeowner is no
greater than the annual income established by the Secretary
as being of low- or moderate-income.''.

SEC. 118. PRE-PURCHASE HOMEOWNERSHIP COUNSELING
DEMONSTRATION.

(a) Establishment of Program.--For the period beginning on
the date of enactment of this Act and ending on the date that
is 3 years after such date of enactment, the Secretary of
Housing and Urban Development shall establish and conduct a
demonstration program to test the effectiveness of
alternative forms of pre-purchase homeownership counseling
for eligible homebuyers.
(b) Forms of Counseling.--The Secretary of Housing and
Urban Development shall provide to eligible homebuyers pre-
purchase homeownership counseling under this section in the
form of --
(1) telephone counseling;
(2) individualized in-person counseling;
(3) web-based counseling;
(4) counseling classes; or
(5) any other form or type of counseling that the Secretary
may, in his discretion, determine appropriate.
(c) Size of Program.--The Secretary shall make available
the pre-purchase homeownership counseling described in
subsection (b) to not more than 3,000 eligible homebuyers in
any given year.
(d) Incentive to Participate.--The Secretary of Housing and
Urban Development may provide incentives to eligible
homebuyers to participate in the demonstration program
established under subsection (a). Such incentives may include
the reduction of any insurance premium charges owed by the
eligible homebuyer to the Secretary.
(e) Eligible Homebuyer Defined.--For purposes of this
section an ``eligible homebuyer'' means a first-time
homebuyer who has been approved for a home loan with a loan-
to-value ratio between 97 percent and 98.5 percent.
(f) Report to Congress.--The Secretary of Housing and Urban
Development shall report to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representative--
(1) on an annual basis, on the progress and results of the
demonstration program established under subsection (a); and
(2) for the period beginning on the date of enactment of
this Act and ending on the date that is 5 years after such
date of enactment, on the payment history and delinquency
rates of eligible homebuyers who participated in the
demonstration program.

SEC. 119. FRAUD PREVENTION.

Section 1014 of title 18, United States Code, is amended in
the first sentence--
(1) by inserting ``the Federal Housing Administration''
before ``the Farm Credit Administration''; and
(2) by striking ``commitment, or loan'' and inserting
``commitment, loan, or insurance agreement or application for
insurance or a guarantee''.

SEC. 120. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.

(a) In General.--Notwithstanding any other provision of
law, including any provision of this Act and any amendment
made by this Act--
(1) for the period beginning on the date of the enactment
of this Act and ending on October 1, 2009, the premiums
charged for mortgage insurance under multifamily housing
programs under the National Housing Act may not be increased
above the premium amounts in effect under such program on
October 1, 2006, unless the Secretary of Housing and Urban
Development determines that, absent such increase, insurance
of additional mortgages under such program would, under the
Federal Credit Reform Act of 1990, require the appropriation
of new budget authority to cover the costs (as such term is
defined in section 502 of the Federal Credit Reform Act of
1990 (2 U.S.C. 661a) of such insurance; and
(2) a premium increase pursuant to paragraph (1) may be
made only if not less than 30 days prior to such increase
taking effect, the Secretary of Housing and Urban
Development--
(A) notifies the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives of such increase; and
(B) publishes notice of such increase in the Federal
Register.
(b) Waiver.--The Secretary of Housing and Urban Development
may waive the 30-day notice requirement under subsection
(a)(2), if the Secretary determines that waiting 30-days
before increasing premiums would cause substantial damage to
the solvency of multifamily housing programs under the
National Housing Act.

SEC. 121. SAVINGS PROVISION.

Any mortgage insured under title II of the National Housing
Act before the date of enactment of this title shall continue
to be governed by the laws, regulations, orders, and terms
and conditions to which it was subject on the day before the
date of the enactment of this title.

SEC. 122. IMPLEMENTATION.

The Secretary of Housing and Urban Development shall by
notice establish any additional requirements that may be
necessary to immediately carry out the provisions of this
title. The notice shall take effect upon issuance.

TITLE II--MANUFACTURED HOUSING LOAN MODERNIZATION

SEC. 201. SHORT TITLE.

This title may be cited as the ``FHA Manufactured Housing
Loan Modernization Act of 2007''.

SEC. 202. PURPOSES.

The purposes of this title are--
(1) to provide adequate funding for FHA-insured
manufactured housing loans for low- and moderate-income
homebuyers during all economic cycles in the manufactured
housing industry;
(2) to modernize the FHA title I insurance program for
manufactured housing loans to enhance participation by Ginnie
Mae and the private lending markets; and
(3) to adjust the low loan limits for title I manufactured
home loan insurance to reflect the increase in costs since
such limits were last increased in 1992 and to index the
limits to inflation.

SEC. 203. EXCEPTION TO LIMITATION ON FINANCIAL INSTITUTION
PORTFOLIO.

The second sentence of section 2(a) of the National Housing
Act (12 U.S.C. 1703(a)) is amended--
(1) by striking ``In no case'' and inserting ``Other than
in connection with a manufactured home or a lot on which to
place such a home (or both), in no case''; and
(2) by striking ``: Provided, That with'' and inserting ``.
With''.

SEC. 204. INSURANCE BENEFITS.

(a) In General.--Subsection (b) of section 2 of the
National Housing Act (12 U.S.C. 1703(b)), is amended by
adding at the end the following new paragraph:
``(8) Insurance benefits for manufactured housing loans.--
Any contract of insurance with respect to loans, advances of
credit, or purchases in connection with a manufactured home
or a lot on which to place a manufactured home (or both) for
a financial institution that is executed under this title
after the date of the enactment of the FHA Manufactured
Housing Loan Modernization Act of 2007 by the Secretary shall
be conclusive evidence of the eligibility of such financial
institution for insurance, and the validity of any contract
of insurance so executed shall be incontestable in the hands
of the bearer from the date of the execution of such
contract, except for fraud or misrepresentation on the part
of such institution.''.
(b) Applicability.--The amendment made by subsection (a)
shall only apply to loans that are registered or endorsed for
insurance after the date of the enactment of this Act.

SEC. 205. MAXIMUM LOAN LIMITS.

(a) Dollar Amounts.--Paragraph (1) of section 2(b) of the
National Housing Act (12 U.S.C. 1703(b)(1)) is amended--
(1) in clause (ii) of subparagraph (A), by striking
``$17,500'' and inserting ``$25,090'';
(2) in subparagraph (C) by striking ``$48,600'' and
inserting ``$69,678'';
(3) in subparagraph (D) by striking ``$64,800'' and
inserting ``$92,904'';
(4) in subparagraph (E) by striking ``$16,200'' and
inserting ``$23,226''; and
(5) by realigning subparagraphs (C), (D), and (E) 2 ems to
the left so that the left margins of such subparagraphs are
aligned with the margins of subparagraphs (A) and (B).
(b) Annual Indexing.--Subsection (b) of section 2 of the
National Housing Act (12 U.S.C. 1703(b)), as amended by the
preceding provisions of this Act, is further amended by
adding at the end the following new paragraph:
``(9) Annual indexing of manufactured housing loans.--The
Secretary shall develop a method of indexing in order to
annually adjust the loan limits established in subparagraphs
(A)(ii), (C), (D), and (E) of this subsection. Such index
shall be based on the manufactured housing price data
collected by the United States Census Bureau. The Secretary
shall establish such index no later than 1 year after the
date of the enactment of the FHA Manufactured Housing Loan
Modernization Act of 2007.''
(c) Technical and Conforming Changes.--Paragraph (1) of
section 2(b) of the National Housing Act (12 U.S.C.
1703(b)(1)) is amended--
(1) by striking ``No'' and inserting ``Except as provided
in the last sentence of this paragraph, no''; and
(2) by adding after and below subparagraph (G) the
following:
``The Secretary shall, by regulation, annually increase the
dollar amount limitations in subparagraphs (A)(ii), (C), (D),
and (E) (as such limitations may have been previously
adjusted under this sentence) in accordance with the index
established pursuant to paragraph (9).''.

[[Page S14295]]

SEC. 206. INSURANCE PREMIUMS.

Subsection (f) of section 2 of the National Housing Act (12
U.S.C. 1703(f)) is amended--
(1) by inserting ``(1) Premium charges.--'' after ``(f)'';
and
(2) by adding at the end the following new paragraph:
``(2) Manufactured Home Loans.--Notwithstanding paragraph
(1), in the case of a loan, advance of credit, or purchase in
connection with a manufactured home or a lot on which to
place such a home (or both), the premium charge for the
insurance granted under this section shall be paid by the
borrower under the loan or advance of credit, as follows:
``(A) At the time of the making of the loan, advance of
credit, or purchase, a single premium payment in an amount
not to exceed 2.25 percent of the amount of the original
insured principal obligation.
``(B) In addition to the premium under subparagraph (A),
annual premium payments during the term of the loan, advance,
or obligation purchased in an amount not exceeding 1.0
percent of the remaining insured principal balance (excluding
the portion of the remaining balance attributable to the
premium collected under subparagraph (A) and without taking
into account delinquent payments or prepayments).
``(C) Premium charges under this paragraph shall be
established in amounts that are sufficient, but do not exceed
the minimum amounts necessary, to maintain a negative credit
subsidy for the program under this section for insurance of
loans, advances of credit, or purchases in connection with a
manufactured home or a lot on which to place such a home (or
both), as determined based upon risk to the Federal
Government under existing underwriting requirements.
``(D) The Secretary may increase the limitations on premium
payments to percentages above those set forth in
subparagraphs (A) and (B), but only if necessary, and not in
excess of the minimum increase necessary, to maintain a
negative credit subsidy as described in subparagraph (C).''.

SEC. 207. TECHNICAL CORRECTIONS.

(a) Dates.--Subsection (a) of section 2 of the National
Housing Act (12 U.S.C. 1703(a)) is amended--
(1) by striking ``on and after July 1, 1939,'' each place
such term appears; and
(2) by striking ``made after the effective date of the
Housing Act of 1954''.
(b) Authority of Secretary.--Subsection (c) of section 2 of
the National Housing Act (12 U.S.C. 1703(c)) is amended to
read as follows:
``(c) Handling and Disposal of Property.--
``(1) Authority of secretary.--Notwithstanding any other
provision of law, the Secretary may--
``(A) deal with, complete, rent, renovate, modernize,
insure, or assign or sell at public or private sale, or
otherwise dispose of, for cash or credit in the Secretary's
discretion, and upon such terms and conditions and for such
consideration as the Secretary shall determine to be
reasonable, any real or personal property conveyed to or
otherwise acquired by the Secretary, in connection with the
payment of insurance heretofore or hereafter granted under
this title, including any evidence of debt, contract, claim,
personal property, or security assigned to or held by him in
connection with the payment of insurance heretofore or
hereafter granted under this section; and
``(B) pursue to final collection, by way of compromise or
otherwise, all claims assigned to or held by the Secretary
and all legal or equitable rights accruing to the Secretary
in connection with the payment of such insurance, including
unpaid insurance premiums owed in connection with insurance
made available by this title.
``(2) Advertisements for proposals.--Section 3709 of the
Revised Statutes shall not be construed to apply to any
contract of hazard insurance or to any purchase or contract
for services or supplies on account of such property if the
amount thereof does not exceed $25,000.
``(3) Delegation of authority.--The power to convey and to
execute in the name of the Secretary, deeds of conveyance,
deeds of release, assignments and satisfactions of mortgages,
and any other written instrument relating to real or personal
property or any interest therein heretofore or hereafter
acquired by the Secretary pursuant to the provisions of this
title may be exercised by an officer appointed by the
Secretary without the execution of any express delegation of
power or power of attorney. Nothing in this subsection shall
be construed to prevent the Secretary from delegating such
power by order or by power of attorney, in the Secretary's
discretion, to any officer or agent the Secretary may
appoint.''.

SEC. 208. REVISION OF UNDERWRITING CRITERIA.

(a) In General.--Subsection (b) of section 2 of the
National Housing Act (12 U.S.C. 1703(b)), as amended by the
preceding provisions of this Act, is further amended by
adding at the end the following new paragraph:
``(10) Financial soundness of manufactured housing
program.--The Secretary shall establish such underwriting
criteria for loans and advances of credit in connection with
a manufactured home or a lot on which to place a manufactured
home (or both), including such loans and advances represented
by obligations purchased by financial institutions, as may be
necessary to ensure that the program under this title for
insurance for financial institutions against losses from such
loans, advances of credit, and purchases is financially
sound.''.
(b) Timing.--Not later than the expiration of the 6-month
period beginning on the date of the enactment of this Act,
the Secretary of Housing and Urban Development shall revise
the existing underwriting criteria for the program referred
to in paragraph (10) of section 2(b) of the National Housing
Act (as added by subsection (a) of this section) in
accordance with the requirements of such paragraph.

SEC. 209. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

Title I of the National Housing Act is amended by adding at
the end of section 9 the following new section:

``SEC. 10. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

``(a) In General.--Except as provided in subsection (b),
the provisions of sections 3, 8, 16, 17, 18, and 19 of the
Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601
et seq.) shall apply to each sale of a manufactured home
financed with an FHA-insured loan or extension of credit, as
well as to services rendered in connection with such
transactions.
``(b) Authority of the Secretary.--The Secretary is
authorized to determine the manner and extent to which the
provisions of sections 3, 8, 16, 17, 18, and 19 of the Real
Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et
seq.) may reasonably be applied to the transactions described
in subsection (a), and to grant such exemptions as may be
necessary to achieve the purposes of this section.
``(c) Definitions.--For purposes of this section--
``(1) the term `federally related mortgage loan' as used in
sections 3, 8, 16, 17, 18, and 19 of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.)
shall include an FHA-insured loan or extension of credit made
to a borrower for the purpose of purchasing a manufactured
home that the borrower intends to occupy as a personal
residence; and
``(2) the term `real estate settlement service' as used in
sections 3, 8, 16, 17, 18, and 19 of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.)
shall include any service rendered in connection with a loan
or extension of credit insured by the Federal Housing
Administration for the purchase of a manufactured home.
``(d) Unfair and Deceptive Practices.--In connection with
the purchase of a manufactured home financed with a loan or
extension of credit insured by the Federal Housing
Administration under this title, the Secretary shall prohibit
acts or practices in connection with loans or extensions of
credit that the Secretary finds to be unfair, deceptive, or
otherwise not in the interests of the borrower.''.

SEC. 210. LEASEHOLD REQUIREMENTS.

Subsection (b) of section 2 of the National Housing Act (12
U.S.C. 1703(b)), as amended by the preceding provisions of
this Act, is further amended by adding at the end the
following new paragraph:
``(11) Leasehold requirements.--No insurance shall be
granted under this section to any such financial institution
with respect to any obligation representing any such loan,
advance of credit, or purchase by it, made for the purposes
of financing a manufactured home which is intended to be
situated in a manufactured home community pursuant to a
lease, unless such lease--
``(A) expires not less than 3 years after the origination
date of the obligation;
``(B) is renewable upon the expiration of the original 3
year term by successive 1 year terms; and
``(C) requires the lessor to provide the lessee written
notice of termination of the lease not less than 180 days
prior to the expiration of the current lease term in the
event the lessee is required to move due to the closing of
the manufactured home community, and further provides that
failure to provide such notice to the mortgagor in a timely
manner will cause the lease term, at its expiration, to
automatically renew for an additional 1 year term.''.
______

By Mr. McCONNELL (for himself and Mr. Stevens):
S. 2340. A bill making emergency supplemental appropriations for the
Department of Defense for the fiscal year ending September 30, 2008,
and for other purposes; read the first time.
Mr. McCONNELL. Mr. President, I ask unanimous consent that the text
of the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
placed in the Record, as follows:

S. 2340

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That the
following sums are appropriated, out of any money in the
Treasury not otherwise appropriated, for the fiscal year
ending September 30, 2008.

TITLE I

MILIARY PERSONNEL

Military Personnel, Army

For an additional amount for ``Military Personnel, Army'',
$6,158,778,000.

Military Personnel, Navy

For an additional amount for ``Military Personnel, Navy'',
$395,839,000.

[[Page S14296]]

Military Personnel, Marine Corps

For an additional amount for ``Military Personnel, Marine
Corps'', $895,011,000.

Military Personnel, Air Force

For an additional amount for ``Military Personnel, Air
Force'', $707,945,000.

Reverse Personnel, Army

For an additional amount for ``Reserve Personnel, Army'',
$115,150,000.

Reserve Personnel, Navy

For an additional amount for ``Reserve Personnel, Navy'',
$35,000,000.

Reserve Personnel, Marine Corps

For an additional amount for ``Reserve Personnel, Marine
Corps'', $7,710,000.

Reserve Personnel, Air Force

For an additional amount for ``Reserve Personnel, Air
Force'', $1,500,000.

National Guard Personnel, Army

For an additional amount for ``National Guard Personnel,
Army'', $334,000,000.

TITLE II

OPERATION AND MAINTENANCE

Operation and Maintenance, Army

For an additional amount for ``Operation and Maintenance,
Army'', $27,853,000,000.

Operation and Maintenance, Navy

(including transfers of funds)

For an additional amount for ``Operation and Maintenance,
Navy'', $2,664,000,000: Provided, That up to $98,000,000
shall be transferred to the Coast Guard ``Operating
Expenses'' account.

Operation and Maintenance, Marine Corps

For an additional amount for ``Operation and Maintenance,
Marine Corps'', $2,649,807,000.

Operation and Maintenance, Air Force

For an additional amount for ``Operation and Maintenance,
Air Force'', $4,778,000,000.

Operation and Maintenance, Defense-Wide

For an additional amount for ``Operation and Maintenance,
Defense-Wide'', $1,836,318,000, of which up to $300,000,000,
to remain available until expended, may be used for payments
to reimburse Pakistan, Jordan, and other key cooperating
nations, for logistical, military, and other support
provided, or to be provided, to United States military
operations, notwithstanding any other provision of law:
Provided, That such payments may be made in such amounts as
the Secretary of Defense, with the concurrence of the
Secretary of State, and in consultation with the Director of
the Office of Management and Budget, may determine, in his
discretion, based on documentation determined by the
Secretary of Defense to adequately account for the support
provided, and such determination is final and conclusive upon
the accounting officers of the United States, and 15 days
following notification to the appropriate congressional
committees: Provided further, That the Secretary of Defense
shall provide quarterly reports to the congressional defense
committees on the use of funds provided in this paragraph.

Operation and Maintenance, Army Reserve

For an additional amount for ``Operation and Maintenance,
Army Reserve'', $77,736,000.

Operation and Maintenance, Navy Reserve

For an additional amount for ``Operation and Maintenance,
Navy Reserve'', $41,657,000.

Operation and Maintenance, Marine Corps Reserve

For an additional amount for ``Operation and Maintenance,
Marine Corps Reserve'', $46,153,000.

Operations and Maintenance, Air Force Reserve

For an additional amount for ``Operation and Maintenance,
Air Force Reserve'', $12,133,000.

Operation and Maintenance, Army National Guard

For an additional amount for ``Operation and Maintenance,
Army National Guard'', $327,000,000.

Operation and Maintenance, Air National Guard

For an additional amount for ``Operation and Maintenance,
Air National Guard'', $51,634,000.

Iraq Freedom Fund

(including transfer of funds)

For an additional amount for ``Iraq Freedom Fund'',
$3,747,327,000, to remain available for transfer until
September 30, 2009, only to support operations in Iraq or
Afghanistan: Provided, That the Secretary of Defense may
transfer the funds provided herein to appropriations for
military personnel; operation and maintenance; Overseas
Humanitarian, Disaster, and Civic Aid; procurement; research,
development, test and evaluation; and working capital funds:
Provided further, That funds transferred shall be merged with
and be available for the same purposes and for the same time
period as the appropriation or fund to which transferred:
Provided further, That this transfer authority is in addition
to any other transfer authority available to the Department
of Defense: Provided further, That upon a determination that
all or part of the funds transferred from this appropriation
are not necessary for the purposes provided herein, such
amounts may be transferred back to this appropriation:
Provided further, That the Secretary of Defense shall, not
fewer than 5 days prior to making transfers from this
appropriation, notify the congressional defense committees in
writing of the details of any such transfer: Provided
further, That the Secretary shall submit a report no later
than 30 days after the end of each fiscal quarter to the
congressional defense committees summarizing the details of
the transfer of funds from this appropriation.

Afghanistan Security Forces Fund

(including transfer of funds)

For the ``Afghanistan Security Forces Fund'',
$1,350,000,000, to remain available until September 30, 2009:
Provided, That such funds shall be available to the Secretary
of Defense, notwithstanding any other provision of law, for
the purpose of allowing the Commander, Office of Security
Cooperation-Afghanistan, or the Secretary's designee, to
provide assistance, with the concurrence of the Secretary of
State, to the security forces of Afghanistan, including the
provision of equipment, supplies, services, training,
facility and infrastructure repair, renovation, and
construction, and funding: Provided further, That the
authority to provide assistance under this heading is in
addition to any other authority to provide assistance to
foreign nations: Provided further, That the Secretary of
Defense may transfer such funds to appropriations for
military personnel; operation and maintenance; Overseas
Humanitarian, Disaster, and Civic Aid; procurement; research,
development, test and evaluation; and defense working capital
funds to accomplish the purposes provided herein: Provided
further, That this transfer authority is in addition to any
other transfer authority available to the Department of
Defense: Provided further, That upon a determination that all
or part of the funds so transferred from this appropriation
are not necessary for the purposes provided herein, such
amounts may be transferred back to this appropriation:
Provided further, That contributions of funds for the
purposes provided herein from any person, foreign government,
or international organization may be credited to this Fund,
and used for such purposes: Provided further, That the
Secretary shall notify the congressional defense committees
in writing upon the receipt and upon the transfer of any
contribution delineating the sources and amounts of the funds
received and the specific use of such contributions: Provided
further, That the Secretary of Defense shall, not fewer than
five days prior to making transfers from this appropriation
account, notify the congressional defense committees in
writing of the details of any such transfer: Provided
further, That the Secretary shall submit a report no later
than 30 days after the end of each fiscal quarter to the
congressional defense committees summarizing the details of
the transfer of funds from this appropriation.

Iraq Security Forces Fund

(including transfer of funds)

For the ``Iraq Security Forces Fund'', $1,500,000,000, to
remain available until September 30, 2009: Provided, That
such funds shall be available to the Secretary of Defense,
notwithstanding any other provision of law, for the purpose
of allowing the Commander, Multi-National Security Transition
Command-Iraq, or the Secretary's designee, to provide
assistance, with the concurrence of the Secretary of State,
to the security forces of Iraq, including the provision of
equipment, supplies, services, training, facility and
infrastructure repair, renovation, and construction, and
funding: Provided further, That the authority to provide
assistance under this heading is in addition to any other
authority to provide assistance to foreign nations: Provided
further, That the Secretary of Defense may transfer such
funds to appropriations for military personnel; operation and
maintenance; Overseas Humanitarian, Disaster, and Civic Aid;
procurement; research, development, test and evaluation; and
defense working capital funds to accomplish the purposes
provided herein: Provided further, That this transfer
authority is in addition to any other transfer authority
available to the Department of Defense: Provided further,
That upon a determination that all or part of the funds so
transferred from this appropriation are not necessary for the
purposes provided herein, such amounts may be transferred
back to this appropriation: Provided further, That
contributions of funds for the purposes provided herein from
any person, foreign government, or international organization
may be credited to this Fund, and used for such purposes:
Provided further, That the Secretary shall notify the
congressional defense committees in writing upon the receipt
and upon the transfer of any contribution delineating the
sources and amounts of the funds received and the specific
use of such contributions: Provided further, That the
Secretary of Defense shall, not fewer than five days prior to
making transfers from this appropriation account, notify the
congressional defense committees in writing of the details of
any such transfer: Provided further, That the Secretary shall
submit a report no later than 30 days after the end of each
fiscal quarter to the congressional defense committees
summarizing the details of the transfer of funds from this
appropriation.

Joint Improvised Explosive Device Defeat Fund

(including transfer of funds)

For the ``Joint Improvised Explosive Device Defeat Fund'',
$2,264,500,000, to remain available until September 30, 2010:
Provided, That such funds shall be available to the Secretary
of Defense, notwithstanding any other provision of law, for
the purpose of allowing the Director of the Joint Improvised

[[Page S14297]]

Explosive Device Defeat Organization to investigate, develop
and provide equipment, supplies, services, training,
facilities, personnel and funds to assist United States
forces in the defeat of improvised explosive devices:
Provided further, That within 60 days of the enactment of
this Act, a plan for the intended management and use of the
Fund is provided to the congressional defense committees:
Provided further, That the Secretary of Defense shall submit
a report not later than 30 days after the end of each fiscal
quarter to the congressional defense committees providing
assessments of the evolving threats, individual service
requirements to counter the threats, the current strategy for
predeployment training of members of the Armed Forces on
improvised explosive devices, and details on the execution of
this Fund: Provided further, That the Secretary of Defense
may transfer funds provided herein to appropriations for
military personnel; operation and maintenance; procurement;
research, development, test and evaluation; and defense
working capital funds to accomplish the purpose provided
herein: Provided further, That this transfer authority is in
addition to any other transfer authority available to the
Department of Defense: Provided further, That upon
determination that all or part of the funds so transferred
from this appropriation are not necessary for the purpose
provided herein, such amounts may be transferred back to this
appropriation: Provided further, That the Secretary of
Defense shall, not fewer than 5 days prior to making
transfers from this appropriation, notify the congressional
defense committees in writing of the details of any such
transfer.

TITLE III

PROCUREMENT

Aircraft Procurement, Army

For an additional amount for ``Aircraft Procurement,
Army'', $1,300,503,000, to remain available for obligation
until September 30, 2010.

Missile Procurement, Army

For an additional amount for ``Missile Procurement, Army'',
$133,621,000, to remain available for obligation until
September 30, 2010.

Procurement of Weapons and Tracked Combat Vehicles, Army

For an additional amount for ``Procurement of Weapons and
Tracked Combat Vehicles, Army'', $4,512,566,000, to remain
available for obligation until September 30, 2010.

Procurement of Ammunition, Army

For an additional amount for ``Procurement of Ammunition,
Army'', $154,000,000, to remain available for obligation
until September 30, 2010.

Other Procurement, Army

For an additional amount for ``Other Procurement, Army'',
$2,300,942,000, to remain available for obligation until
September 30, 2010.

Aircraft Procurement, Navy

For an additional amount for ``Aircraft Procurement,
Navy'', $45,900,000, to remain available for obligation until
September 30, 2010.

Weapons Procurement, Navy

For an additional amount for ``Weapons Procurement, Navy'',
$159,141,000, to remain available for obligation until
September 30, 2010.

Procurement of Ammunition, Navy and Marine Corps

For an additional amount for ``Procurement of Ammunition,
Navy and Marine Corps'', $304,945,000, to remain available
for obligation until September 30, 2010.

Other Procurement, Navy

For an additional amount for ``Other Procurement, Navy'',
$140,061,000, to remain available for obligation until
September 30, 2010.

Procurement, Marine Corps

For an additional amount for ``Procurement, Marine Corps'',
$733,550,000, to remain available for obligation until
September 30, 2010.

Aircraft Procurement, Air Force

For an additional amount for ``Aircraft Procurement, Air
Force'', $133,500,000, to remain available for obligation
until September 30, 2010.

Procurement of Ammunition, Air Force

For an additional amount for ``Procurement of Ammunition,
Air Force'', $52,203,000, to remain available for obligation
until September 30, 2010.

Other Procurement, Air Force

For an additional amount for ``Other Procurement, Air
Force'', $199,617,000, to remain available for obligation
until September 30, 2010.

Procurement, Defense-Wide

For an additional amount for ``Procurement, Defense-Wide'',
$274,743,000, to remain available for obligation until
September 30, 2010.

TITLE IV

REVOLVING AND MANAGEMENT FUNDS

Defense Working Capital Funds

For an additional amount of ``Defense Working Capital
Funds'', $1,000,000,000, to remain available for obligation
until September 30, 2010.

TITLE V

OTHER DEPARTMENT OF DEFENSE PROGRAMS

Defense Health Program

For an additional amount for ``Defense Health Program'',
$575,701,000 for Operation and maintenance.

Drug Interdiction and Counter-Drug Activities, Defense

For an additional amount for ``Drug Interdiction and
Counter-Drug Activities, Defense'', $128,809,000.

TITLE VI

GENERAL PROVISIONS

Sec. 601. Appropriations provided in this Act are
available for obligation until September 30, 2008, unless
otherwise so provided in this Act.
Sec. 602. Notwithstanding any other provision of law or of
this Act, funds made available in this Act are in addition to
amounts appropriated or otherwise made available for the
Department of Defense for fiscal year 2008.

(TRANSFER OF FUNDS)

Sec. 603. Upon the determination of the Secretary of
Defense that such action is necessary in the national
interest, the Secretary may transfer between appropriations
up to $3,000,000,000 of the funds made available to the
Department of Defense in this Act: Provided, That the
Secretary shall notify the Congress promptly of each transfer
made pursuant to the authority in this section: Provided
further, That the authority provided in this section is in
addition to any other transfer authority available to the
Department of Defense.
Sec. 604. Funds appropriated in this Act, or made
available by the transfer of funds in or pursuant to this
Act, for intelligence activities are deemed to be
specifically authorized by the Congress for purposes of
section 504 of the National Security Act of 1947 (50 U.S.C.
414).
Sec. 605. None of the funds provided in this Act may be
used to finance programs or activities denied by Congress in
fiscal years 2007 or 2008 appropriations to the Department of
Defense or to initiate a procurement or research,
development, test and evaluation new start program without
prior written notification to the congressional defense
committees.
Sec. 606. (a) Availability of Funds for CERP.--From funds
made available in this Act to the Department of Defense, not
to exceed $500,000,000 may be used, notwithstanding any other
provision of law, to fund the Commander's Emergency Response
Program, for the purpose of enabling military commanders in
Iraq to respond to urgent humanitarian relief and
reconstruction requirements within their areas of
responsibility by carrying out programs that will immediately
assist the Iraqi people, and to fund a similar program to
assist the people of Afghanistan.
(b) Quarterly Reports.--Not later than 15 days after the
end of each fiscal year quarter (beginning with the first
quarter of fiscal year 2008), the Secretary of Defense shall
submit to the congressional defense committees a report
regarding the source of funds and the allocation and use of
funds during that quarter that were made available pursuant
to the authority provided in this section or under any other
provision of law for the purposes of the programs under
subsection (a).
Sec. 607. During the current fiscal year, funds available
to the Department of Defense for operation and maintenance
may be used, notwithstanding any other provision of law, to
provide supplies, services, transportation, including airlift
and sealift, and other logistical support to coalition forces
supporting military and stability operations in Iraq and
Afghanistan: Provided, That the Secretary of Defense shall
provide quarterly reports to the congressional defense
committees regarding support provided under this section.
Sec. 608. During fiscal year 2008, supervision and
administration costs associated with projects carried out
with funds appropriated to ``Afghanistan Security Forces
Fund'' or ``Iraq Security Forces Fund'' in this Act may be
obligated at the time a construction contract is awarded:
Provided, That for the purpose of this section, supervision
and administration costs include all in-house Government
costs.
Sec. 609. (a) Reports on Progress Toward Stability in
Iraq.--Not later than 60 days after the date of the enactment
of this Act and every 90 days thereafter through the end of
fiscal year 2008, the Secretary of Defense shall set forth in
a report to Congress a comprehensive set of performance
indicators and measures for progress toward military and
political stability in Iraq.
(b) Scope of Reports.--Each report shall include
performance standards and goals for security, economic, and
security force training objectives in Iraq together with a
notional timetable for achieving these goals.
(c) Specific Elements.--In specific, each report shall
require, at a minimum, the following:
(1) With respect to stability and security in Iraq, the
following:
(A) Key measures of political stability, including the
important political milestones that must be achieved over the
next several years.
(B) The primary indicators of a stable security environment
in Iraq, such as number of engagements per day, numbers of
trained Iraqi forces, and trends relating to numbers and
types of ethnic and religious-based hostile encounters.
(C) An assessment of the estimated strength of the
insurgency in Iraq and the

[[Page S14298]]

extent to which it is composed of non-Iraqi fighters.
(D) A description of all militias operating in Iraq,
including the number, size, equipment strength, military
effectiveness, sources of support, legal status, and efforts
to disarm or reintegrate each militia.
(E) Key indicators of economic activity that should be
considered the most important for determining the prospects
of stability in Iraq, including--
(i) unemployment levels;
(ii) electricity, water, and oil production rates; and
(iii) hunger and poverty levels.
(F) The criteria the Administration will use to determine
when it is safe to begin withdrawing United States forces
from Iraq.
(2) With respect to the training and performance of
security forces in Iraq, the following:
(A) The training provided Iraqi military and other Ministry
of Defense forces and the equipment used by such forces.
(B) Key criteria for assessing the capabilities and
readiness of the Iraqi military and other Ministry of Defense
forces, goals for achieving certain capability and readiness
levels (as well as for recruiting, training, and equipping
these forces), and the milestones and notional timetable for
achieving these goals.
(C) The operational readiness status of the Iraqi military
forces, including the type, number, size, and organizational
structure of Iraqi battalions that are--
(i) capable of conducting counterinsurgency operations
independently;
(ii) capable of conducting counterinsurgency operations
with the support of United States or coalition forces; or
(iii) not ready to conduct counter-
insurgency operations.
(D) The rates of absenteeism in the Iraqi military forces
and the extent to which insurgents have infiltrated such
forces.
(E) The training provided Iraqi police and other Ministry
of Interior forces and the equipment used by such forces.
(F) Key criteria for assessing the capabilities and
readiness of the Iraqi police and other Ministry of Interior
forces, goals for achieving certain capability and readiness
levels (as well as for recruiting, training, and equipping),
and the milestones and notional timetable for achieving these
goals, including--
(i) the number of police recruits that have received
classroom training and the duration of such instruction;
(ii) the number of veteran police officers who have
received classroom instruction and the duration of such
instruction;
(iii) the number of police candidates screened by the Iraqi
Police Screening Service, the number of candidates derived
from other entry procedures, and the success rates of those
groups of candidates;
(iv) the number of Iraqi police forces who have received
field training by international police trainers and the
duration of such instruction; and
(v) attrition rates and measures of absenteeism and
infiltration by insurgents.
(G) The estimated total number of Iraqi battalions needed
for the Iraqi security forces to perform duties now being
undertaken by coalition forces, including defending the
borders of Iraq and providing adequate levels of law and
order throughout Iraq.
(H) The effectiveness of the Iraqi military and police
officer cadres and the chain of command.
(I) The number of United States and coalition advisors
needed to support the Iraqi security forces and associated
ministries.
(J) An assessment, in a classified annex if necessary, of
United States military requirements, including planned force
rotations, through the end of calendar year 2008.
Sec. 610. Each amount appropriated or otherwise made
available in this Act is designated as an emergency
requirement and necessary to meet emergency needs pursuant to
subsections (a) and (b) of section 204 of S. Con. Res. 21
(110th Congress), the concurrent resolution on the budget for
fiscal year 2008.
Sec. 611. None of the funds appropriated or otherwise made
available by this Act may be obligated or expended to provide
award fees to any defense contractor for performance that
does not meet the requirements of the contract.
Sec. 612. No funds appropriated or otherwise made
available by this Act may be used by the Government of the
United States to enter into an agreement with the Government
of Iraq that would subject members of the Armed Forces of the
United States to the jurisdiction of Iraq criminal courts or
punishment under Iraq law.
Sec. 613. Notwithstanding any other provision of law, the
Secretary of the Army may reimburse a member for expenses
incurred by the member or family member when such expenses
are otherwise not reimbursable under law: Provided, That such
expenses must have been incurred in good faith as a direct
consequence of reasonable preparation for, or execution of,
military orders: Provided further, That reimbursement under
this section shall be allowed only in situations wherein
other authorities are insufficient to remedy a hardship
determined by the Secretary, and only when the Secretary
determines that reimbursement of the expense is in the best
interest of the member and the United States.
Sec. 614. In this Act, the term ``congressional defense
committees'' means--
(1) the Committees on Armed Services and Appropriations of
the Senate; and
(2) the Committees on Armed Services and Appropriations of
the House of Representatives.
Sec. 615. This Act may be cited as the ``Emergency
Supplemental Appropriations Act for Defense, 2008''.
______

By Mr. REID (for Mrs. Clinton (for herself, Mr. Rockefeller, and
Ms. Landrieu)):
S. 2341. A bill to provide Individual Development Accounts to support
foster youths who are transitioning from the foster care system; to the
Committee on Health, Education, Labor, and Pensions.
Mrs. CLINTON. Mr. President, youth aging out of foster care
constitute one of our Nation's most vulnerable populations. Not only do
these young people carry wih them histories of child abuse and neglect,
but they are also often unsupported in their transition from foster
care to independent living. Today, I am pleased to introduce the
Focusing Investments and Resources for a Safe Transition Act or FIRST
Act, a piece of legislation that will offer much needed financial
assistance to young adults as they exit the child welfare system.
Research shows that youth aging out of foster care fare worse than
their counterparts in the general population on a variety of social,
educational, and health indicators. These youth report significantly
lower levels of education and are more likely to be unemployed or
homeless. Research also shows that, as they prepare to exit foster
care, these young adults do not receive the independent living services
necessary to support them through their transition. When it comes to
guidance on educational opportunities and employment, money management
and housing, resources for foster youth are simply inadequate.
These young people need our help, and they need it now. According to
the most recent Federal data, over 20,000 youth age out of the foster
care system each year. We must intervene in order to prevent them from
experiencing the unfavorable outcomes described in the research. The
FIRST Act meets this task head on by addressing the financial status of
youth exiting foster care. Specifically, the legislation supports
states in setting up Individual Development Accounts, or IDAs, for
those preparing to age out of the child welfare system. The accounts
will contain a Federal deposit on behalf of foster youth matched by
public and private community partners.
Upon transitioning from foster care, and after completing money
management training, the legislation permits youths to withdraw their
savings to pay for necessities such as educational opportunities,
vocational training, and housing--elements critical to achieving self-
sufficiency. In short, with these funds, youth aging out of the child
welfare system will have a financial base on which they can build self-
sustaining, goal-oriented, independent lives.
A similar program is currently being piloted in my State of New York.
This summer, Mayor Mike Bloomberg announced that 450 New York City
foster youths will be provided IDAs through a program called Youth
Financial Empowerment. Similarly, the Jim Casey Youth Opportunities
Passport program has experienced success in offering IDAs to foster
youth in several cities.
For years I have been encouraging Congress to take action regarding
the needs of foster youth. In 2002 I introduced the Opportunity
Passport Act, which, among other provisions, called for the
establishment of IDAs for those aging out of the child welfare system.
Since that time we have failed to make progress on this issue while
youth continue to exit foster care without the resources they need. It
is under these circumstances that I come forward again today to present
the needs of this vulnerable group of young people. It is my hope that
you will join me in putting foster youth FIRST and support this
important legislation.
______

By Mr. REED:
S. 2343. A bill to amend the Real Estate Settlement Procedures Act to
require mortgage originators to make their fees more transparent; to
the Committee on Banking, Housing, and Urban Affairs.
Mr. REED. Mr. President, today I introduce the Real Estate
Transparency Act of 2007. This bill would amend the

[[Page S14299]]

Real Estate Settlement Practices Act of 1974 to improve the early loan
disclosures given to those applying for a mortgage, ensure binding and
transparent payment agreements between mortgage originators and
borrowers, and require that a borrower be given a copy of their final
settlement statement at least one business day before settlement so
that it can be thoroughly examined before closing.
As we are all too aware, current Good Faith Estimates do not provide
enough useful information to help borrowers truly make informed lending
decisions. We have heard too many stories of borrowers not
understanding the terms of their loan or not being told about
unexpectedly high settlement fees until they are at the closing table.
This lack of early and appropriate disclosures regarding the terms of a
mortgage loan and the costs of closing on that loan hinders a family's
ability to shop for the best loan product for the purchase of a home,
and also has allowed families to be taken advantage of by unscrupulous
brokers and lenders.
First and foremost, the Real Estate Transparency Act would replace
the current Good Faith Estimate with an early written settlement
statement of all of the costs to be charged to that person at or before
settlement of the loan. It would require that this early settlement
statement be in the same form as the final settlement statement,
currently known as the HUD 1. The borrower would not be liable for any
fees which are not disclosed on this early settlement statement, except
for third party fees within 10 percent of the cost listed on the early
settlement statement, or fees for bona fide and reasonable expenses not
anticipated by the mortgage originator for an inspection, appraisal,
survey, or flood certification. This early written settlement statement
should allow consumers to compare the costs associated with different
loan products from different mortgage originators and shop around for
the best product for them early in the process.
Second, this legislation would require for the first time that the
HUD 1 or final settlement statement be provided to the borrower at
least one business day before settlement. If this final settlement
statement is not provided to the borrower, then lenders will be subject
to statutory damages.
Third, this bill would require mortgage originators to provide
borrowers with a written agreement itemizing all of the fees they may
charge the borrower, including any origination fees, underwriting fees,
broker fees, or other fees to be charged at or before settlement of
such loan to be paid to the lender, the broker, or affiliates of the
lender or broker. In addition, this written agreement would have to set
out and explain three possible methods of payment for such fees:
payment in cash before or at settlement; adding such fees into the loan
amount to be borrowed; and increasing the interest rate of the loan.
The borrower also could choose to both pay in cash and incorporate some
of the fees into the loan amount. This written agreement regarding
mortgage origination fees would have to be provided to the borrower
within three days of application and be signed before the borrower is
obligated to pay any of these fees. Not only should this provide
greater transparency regarding what fees are going to be charged by the
mortgage originator, consumers also can decide not to sign on the
dotted line if they do not like the costs associated with the loan.
Finally, the bill subjects mortgage originators to statutory damages
for violations of these disclosure provisions equal to the sum of the
borrower's actual damages plus $5,000 for each instance such instance
of noncompliance.
Congress needs to take many steps to address the subprime mortgage
crisis and to reinstate confidence among our nation's homeowners and
those we hope will become homeowners. I believe that giving consumers
the information they need regarding their loan costs is a vital part of
improving this complicated and often overwhelming process. Borrowers
need to better understand the financial ramifications of choosing a
certain loan product from a certain mortgage originator early in this
process, and before they actually consummate the loan. I hope my
colleagues will join with me in supporting this legislation that I
believe will greatly improve mortgage loan disclosures.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 2343

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 ``Real Estate Transparency Act
of 2007''.

SEC. 2. GREATER TRANSPARENCY OF SETTLEMENT FEES.

(a) In General.--Section 4 of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2603) is amended--
(1) in subsection (a), in the first sentence, by striking
``The Secretary,'' and inserting ``Provision of Settlement
Statement.--The Secretary,'';
(2) in subsection (b)--
(A) in the first sentence--
(i) by striking ``The form'' and inserting ``Advance
Inspection of Settlement Statement.--The form''; and
(ii) by striking ``, except'' and all that follows through
``available at such time''; and
(B) in the second sentence--
(i) by striking ``Upon the request of the borrower to
inspect the form prescribed under this section during the''
and inserting ``At least 1'';
(ii) by striking ``shall permit the'' and inserting ``shall
provide a completed, written copy of the settlement statement
to the''; and
(iii) by striking ``to inspect those'' and all that follows
through ``preceding day''; and
(3) by adding at the end the following:
``(c) Agreement for Originator Fees.--
``(1) Notice of fees.--Not later than 3 days after a person
applies for a federally related mortgage loan, the mortgage
originator of such loan shall provide to that person a
written agreement itemizing all of the fees that person may
be charged by the mortgage originator, including any
origination fees, underwriting fees, broker fees, and any
other fees to be charged at or before the settlement of such
loan to be paid to the mortgage originator. Bona fide
discount points payable by such person to reduce the interest
rate of such loan need not be included on any originator fees
agreement under this paragraph.
``(2) Method of payment.--
``(A) In general.--Each originator fee agreement under
paragraph (1) shall set out the following 3 methods for the
payment of the fees described in any such agreement:
``(i) Payment in cash before or at settlement.
``(ii) Adding such fees into the total loan amount to be
borrowed.
``(iii) Increasing the interest rate of the loan.
``(B) Borrower's choice of payment method.--Each applicant
for a federally related mortgage loan, in determining how to
pay any of the fees described in an originator fees agreement
under paragraph (1), shall choose one of the payment methods
described under subparagraph (A), except that the applicant
may choose to combine the payment methods described under
clauses (i) and (ii) of subparagraph (A).
``(C) Required explanation.--
``(i) Written.--Each originator fee agreement under
paragraph (1) shall include a written explanation of each of
the payment options listed in subparagraph (A), along with a
clear and concise illustration of the effect of each option
on the amount borrowed, the interest rate, the payments
required on the loan, and any other loan terms which might be
affected by such option.
``(ii) Oral.--Each mortgage originator of a federally
related mortgage loan shall explain to each applicant for
such a loan each of the payment options listed in
subparagraph (A) before accepting any payment from that
person.
``(D) Required signature.--Before any applicant for a
federally related mortgage loan is obligated to pay any of
the fees described in the originator fees agreement under
paragraph (1), the person shall have--
``(i) agreed to and signed the originator fees agreement
described under paragraph (1); and
``(ii) exercised the option for determining the method of
payment for such fees.
``(d) Early Settlement Statement.--
``(1) In general.--Not later than 3 days after a person
applies for a federally related mortgage loan, the mortgage
originator of such loan shall provide to that person a
written early settlement statement of all of the settlement
costs to be charged to that person at or before settlement.
The early settlement statement shall be in the same or a
similar form as the statement of settlement costs provided to
the person pursuant to subsection (a).
``(2) Required inclusions.--Each early settlement statement
under this subsection shall include an itemization of the
following:
``(A) All fees agreed to by the applicant of a federally
related mortgage loan pursuant to the originator fees
agreement described under subsection (c)(1).
``(B) All fees to be charged to that applicant by
independent third parties, including government agencies at
or before settlement of the loan, plus all escrows reserves
which may be required of that person.

[[Page S14300]]

``(e) Borrower Liability for Fees.--No borrower shall be
liable for any fees which are not disclosed on an early
settlement statement, except that the borrower is liable for
such fees if--
``(1) the total amount charged for fees imposed by
independent third parties is--
``(A) not more than 10 percent greater than that stated in
the early settlement statement; or
``(B) greater than that allowed under subparagraph (A)
because bona fide and reasonable expenses were incurred by
such third parties for unanticipated inspection, appraisal,
survey, or flood certification of the home which was the
subject of such loan;
``(2) the mortgage originator provides a reasonable
explanation of the circumstances surrounding the settlement
of the loan of the borrower which were different than
anticipated by the mortgage originator when the statement was
provided; and
``(3) the mortgage originator does not engage in a pattern
or practice of providing early settlement statements which
disclose individual fees of independent third parties in
different amounts than actually charged at settlement.
``(f) Liability for Failure to Comply.--
``(1) In general.--Whoever fails to comply with any
provision of this section shall be liable to the borrower for
an amount equal to the sum of--
``(A) any actual damages to the borrower as a result of the
failure; and
``(B) $5,000 for each such instance of noncompliance.
``(2) Court costs.--In addition to any amount under
paragraph (1), in the case of any successful action brought
by a borrower under this subsection, such borrower shall be
reimbursed for the costs of the action, together with any
attorneys fees incurred in connection with such action as the
court may determine to be reasonable under the circumstances.
``(g) Definition.--As used in this section, the term
`mortgage originator'--
``(1) means any person who, for direct or indirect
compensation or gain, or in the expectation of direct or
indirect compensation or gain--
``(A) takes a residential mortgage loan application; or
``(B) assists a consumer in obtaining or applying to obtain
a residential mortgage loan; and
``(2) includes any person who makes loans directly or
brokers loans for others.''.
(b) Conforming Amendment.--Section 5(c) of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2604(c)) is
hereby repealed.

____________________