[Congressional Record Volume 154, Number 76 (Thursday, May 8, 2008)]
[House]
[Pages H3204-H3308]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FORECLOSURE PREVENTION ACT OF 2008
Mr. FRANK of Massachusetts. Mr. Speaker, pursuant to House Resolution
1175, I call up the bill (H.R. 3221) moving the United States toward
greater energy independence and security, developing innovative new
technologies, reducing carbon emissions, creating green jobs,
protecting consumers, increasing clean renewable energy production, and
modernizing our energy infrastructure, with the Senate amendments
thereto, and ask for its immediate consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore. The Clerk will designate the Senate
amendments.
The text of the Senate amendments is as follows:
Senate amendments:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the
``Foreclosure Prevention Act of 2008''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--FHA MODERNIZATION ACT OF 2008
Sec. 101. Short title.
Subtitle A--Building American Homeownership
Sec. 111. Short title.
Sec. 112. Maximum principal loan obligation.
Sec. 113. Cash investment requirement and prohibition of seller-funded
downpayment assistance.
Sec. 114. Mortgage insurance premiums.
Sec. 115. Rehabilitation loans.
Sec. 116. Discretionary action.
Sec. 117. Insurance of condominiums.
Sec. 118. Mutual Mortgage Insurance Fund.
Sec. 119. Hawaiian home lands and Indian reservations.
Sec. 120. Conforming and technical amendments.
Sec. 121. Insurance of mortgages.
Sec. 122. Home equity conversion mortgages.
Sec. 123. Energy efficient mortgages program.
Sec. 124. Pilot program for automated process for borrowers without
sufficient credit history.
Sec. 125. Homeownership preservation.
Sec. 126. Use of FHA savings for improvements in FHA technologies,
procedures, processes, program performance, staffing, and
salaries.
Sec. 127. Post-purchase housing counseling eligibility improvements.
Sec. 128. Pre-purchase homeownership counseling demonstration.
Sec. 129. Fraud prevention.
Sec. 130. Limitation on mortgage insurance premium increases.
Sec. 131. Savings provision.
Sec. 132. Implementation.
Sec. 133. Moratorium on implementation of risk-based premiums.
Subtitle B--Manufactured Housing Loan Modernization
Sec. 141. Short title.
Sec. 142. Purposes.
Sec. 143. Exception to limitation on financial institution portfolio.
Sec. 144. Insurance benefits.
Sec. 145. Maximum loan limits.
Sec. 146. Insurance premiums.
Sec. 147. Technical corrections.
Sec. 148. Revision of underwriting criteria.
Sec. 149. Prohibition against kickbacks and unearned fees.
Sec. 150. Leasehold requirements.
TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS
Sec. 201. Temporary increase in maximum loan guaranty amount for
certain housing loans guaranteed by the Secretary of
Veterans Affairs.
Sec. 202. Counseling on mortgage foreclosures for members of the Armed
Forces returning from service abroad.
Sec. 203. Enhancement of protections for servicemembers relating to
mortgages and mortgage foreclosures.
TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND
FORECLOSED HOMES
Sec. 301. Emergency assistance for the redevelopment of abandoned and
foreclosed homes.
Sec. 302. Nationwide distribution of resources.
Sec. 303. Limitation on use of funds with respect to eminent domain.
Sec. 304. Limitation on distribution of funds.
Sec. 305. Counseling intermediaries.
TITLE IV--HOUSING COUNSELING RESOURCES
Sec. 401. Housing counseling resources.
Sec. 402. Credit counseling.
TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT
Sec. 501. Short title.
Sec. 502. Enhanced mortgage loan disclosures.
Sec. 503. Community Development Investment Authority for depository
institutions.
Sec. 504. Federal Home loan bank refinancing authority for certain
residential mortgage loans.
TITLE VI--TAX-RELATED PROVISIONS
Sec. 601. Election for 4-year carryback of certain net operating losses
and temporary suspension of 90 percent AMT limit.
Sec. 602. Modifications on use of qualified mortgage bonds; temporary
increased volume cap for certain housing bonds.
Sec. 603. Credit for certain home purchases.
Sec. 604. Additional standard deduction for real property taxes for
nonitemizers.
Sec. 605. Election to accelerate AMT and R and D credits in lieu of
bonus depreciation.
Sec. 606. Use of amended income tax returns to take into account
receipt of certain hurricane-related casualty loss grants
by disallowing previously taken casualty loss deductions.
Sec. 607. Waiver of deadline on construction of GO Zone property
eligible for bonus depreciation.
Sec. 608. Temporary tax relief for Kiowa County, Kansas and surrounding
area.
TITLE VII--EMERGENCY DESIGNATION
Sec. 701. Emergency designation.
TITLE VIII--REIT INVESTMENT DIVERSIFICATION AND EMPOWERMENT
Sec. 801. Short title; amendment of 1986 Code.
Subtitle A--Taxable REIT Subsidiaries
Sec. 811. Conforming taxable REIT subsidiary asset test.
Subtitle B--Dealer Sales
Sec. 821. Holding period under safe harbor.
Sec. 822. Determining value of sales under safe harbor.
Subtitle C--Health Care REITs
Sec. 831. Conformity for health care facilities.
Subtitle D--Effective Dates and Sunset
Sec. 841. Effective dates and sunset.
TITLE IX--VETERANS HOUSING MATTERS
Sec. 901. Home improvements and structural alterations for totally
disabled members of the Armed Forces before discharge or
release from the Armed Forces.
Sec. 902. Eligibility for specially adapted housing benefits and
assistance for members of the Armed Forces with service-
connected disabilities and individuals residing outside
the United States.
Sec. 903. Specially adapted housing assistance for individuals with
severe burn injuries.
Sec. 904. Extension of assistance for individuals residing temporarily
in housing owned by a family member.
Sec. 905. Increase in specially adapted housing benefits for disabled
veterans.
Sec. 906. Report on specially adapted housing for disabled individuals.
Sec. 907. Report on specially adapted housing assistance for
individuals who reside in housing owned by a family
member on permanent basis.
Sec. 908. Definition of annual income for purposes of section 8 and
other public housing programs.
Sec. 909. Payment of transportation of baggage and household effects
for members of the Armed Forces who relocate due to
foreclosure of leased housing.
TITLE X--CLEAN ENERGY TAX STIMULUS
Sec. 1001. Short title; etc.
Subtitle A--Extension of Clean Energy Production Incentives
Sec. 1011. Extension and modification of renewable energy production
tax credit.
Sec. 1012. Extension and modification of solar energy and fuel cell
investment tax credit.
Sec. 1013. Extension and modification of residential energy efficient
property credit.
Sec. 1014. Extension and modification of credit for clean renewable
energy bonds.
Sec. 1015. Extension of special rule to implement FERC restructuring
policy.
Subtitle B--Extension of Incentives to Improve Energy Efficiency
Sec. 1021. Extension and modification of credit for energy efficiency
improvements to existing homes.
Sec. 1022. Extension and modification of tax credit for energy
efficient new homes.
Sec. 1023. Extension and modification of energy efficient commercial
buildings deduction.
Sec. 1024. Modification and extension of energy efficient appliance
credit for appliances produced after 2007.
TITLE XI--SENSE OF THE SENATE
Sec. 1101. Sense of the Senate.
[[Page H3205]]
TITLE I--FHA MODERNIZATION ACT OF 2008
SEC. 101. SHORT TITLE.
This title may be cited as the ``FHA Modernization Act of
2008''.
Subtitle A--Building American Homeownership
SEC. 111. SHORT TITLE.
This subtitle may be cited as the ``Building American
Homeownership Act of 2008''.
SEC. 112. MAXIMUM PRINCIPAL LOAN OBLIGATION.
(a) In General.--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, 110 percent of
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 for 2007 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
for 2007 under such section for a 1-family residence; or
``(ii) 132 percent of the dollar amount limitation in
effect for 2007 under such section 305(a)(2) for a residence
of the applicable size (without regard to any authority to
increase such limitations with respect to properties located
in Alaska, Guam, Hawaii, or the Virgin Islands), except that
each such maximum dollar amount shall be adjusted effective
January 1 of each year beginning with 2009, by adding to or
subtracting from each such amount (as it may have been
previously adjusted) a percentage thereof equal to the
percentage increase or decrease, during the most recently
completed 12-month or 4-quarter period ending before the time
of determining such annual adjustment, in an housing price
index developed or selected by the Secretary for purposes of
adjustments under this clause;
except that the dollar amount limitation in effect under this
subparagraph for any size residence for any area 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 amount limitation in effect
for 2007 under such section 305(a)(2) for a residence of the
applicable size, as such limitation is adjusted by any
subsequent percentage adjustments determined under clause
(ii) of this subparagraph; 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.''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect upon the expiration of the date described
in section 202(a) of the Economic Stimulus Act of 2008
(Public Law 110-185).
SEC. 113. 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 3.5 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. 114. 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. 115. 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. 116. 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, and redesignating such subsection as subsection (e).
SEC. 117. 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. 118. 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. The report shall
also include an evaluation of the quality control procedures
and accuracy of information utilized in the process of
underwriting loans guaranteed by the Fund. Such evaluation
shall include a review of the risk characteristics of loans
based not only on borrower information and performance, but
on risks associated with loans originated or funded by
various entities or financial institutions.
``(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
[[Page H3206]]
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 2008, 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 2008; 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. 119. 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. 120. 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. 121. 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. 122. 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) by amending subsection (d)(1) to read as follows:
``(1) have been originated by a mortgagee approved by the
Secretary;'';
(3) by amending subsection (d)(2)(B) to read as follows:
``(B) has received adequate counseling, as provided in
subsection (f), by an independent third party that is not,
either directly or indirectly, associated with or compensated
by a party involved in--
``(i) originating or servicing the mortgage;
``(ii) funding the loan underlying the mortgage; or
``(iii) the sale of annuities, investments, long-term care
insurance, or any other type of financial or insurance
product;'';
(4) in subsection (f)--
(A) by striking ``(f) Information Services for
Mortgagors.--'' and inserting ``(f) Counseling Services and
Information for Mortgagors.--''; and
(B) by amending the matter preceding paragraph (1) to read
as follows: ``The Secretary shall provide or cause to be
provided adequate counseling for the mortgagor, as described
in subsection (d)(2)(B). Such counseling shall be provided by
counselors that meet qualification standards and follow
uniform counseling protocols. The qualification standards and
counseling protocols shall be established by the Secretary
within 12 months of the date of enactment of the Reverse
Mortgage Proceeds Protection Act. The protocols shall require
a qualified counselor to discuss with each mortgagor
information which shall include--''
(5) in subsection (g), 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'';
(6) in subsection (i)(1)(C), by striking ``limitations''
and inserting ``limitation'';
(7) by striking subsection (l);
(8) by redesignating subsection (m) as subsection (l);
(9) by amending subsection (l), as so redesignated, to read
as follows:
``(l) Funding for Counseling.--The Secretary may use a
portion of the mortgage insurance premiums collected under
the program under this section to adequately fund the
counseling and disclosure activities required under
subsection (f), including counseling for those homeowners who
elect not to take out a home equity conversion mortgage,
provided that the use of such funds is based upon accepted
actuarial principles.''; and
(10) by adding at the end the following new subsection:
``(m) 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 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).
``(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.
``(n) Requirements on Mortgage Originators.--
``(1) In general.--The mortgagee and any other party that
participates in the origination of a mortgage to be insured
under this section shall--
``(A) not participate in, be associated with, or employ any
party that participates in or is associated with any other
financial or insurance activity; or
``(B) demonstrate to the Secretary that the mortgagee or
other party maintains, or will maintain, firewalls and other
safeguards designed to ensure that--
``(i) individuals participating in the origination of the
mortgage shall have no involvement with, or incentive to
provide the mortgagor with, any other financial or insurance
product; and
``(ii) the mortgagor shall not be required, directly or
indirectly, as a condition of obtaining a mortgage under this
section, to purchase any other financial or insurance
product.
``(2) Approval of other parties.--All parties that
participate in the origination of a mortgage to be insured
under this section shall be approved by the Secretary.
``(o) Prohibition Against Requirements To Purchase
Additional Products.--The mortgagee or any other party shall
not be required by the mortgagor or any other party to
purchase an insurance, annuity, or other additional product
as a requirement or condition of eligibility for a mortgage
authorized under subsection (c).
``(p) Study To Determine Consumer Protections and
Underwriting Standards.--The Secretary shall conduct a study
to examine and determine appropriate consumer protections and
underwriting standards to ensure that the purchase of
products referred to in subsection (o) is appropriate for the
consumer. In conducting such study, the Secretary shall
consult with consumer advocates (including recognized experts
in consumer protection), industry representatives,
representatives of counseling organizations, and other
interested parties.''.
(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 by
adding at the end the following new subsection:
``(r) 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--
[[Page H3207]]
``(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 (m)(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 title.
(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 title, 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. 123. 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. 124. 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 2008, 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
subtitle, 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. 125. 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. 126. 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 2009 through
2013, $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 title, 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. 127. 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)--
(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. 128. PRE-PURCHASE HOMEOWNERSHIP COUNSELING
DEMONSTRATION.
(a) Establishment of Program.--For the period beginning on
the date of enactment of this title 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.
[[Page H3208]]
(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 title 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. 129. 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. 130. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.
(a) In General.--Notwithstanding any other provision of
law, including any provision of this title and any amendment
made by this title--
(1) for the period beginning on the date of the enactment
of this title 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. 131. SAVINGS PROVISION.
Any mortgage insured under title II of the National Housing
Act before the date of enactment of this subtitle 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 subtitle.
SEC. 132. 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
subtitle. The notice shall take effect upon issuance.
SEC. 133. MORATORIUM ON IMPLEMENTATION OF RISK-BASED
PREMIUMS.
For the 12-month period beginning on the date of enactment
of this title, the Secretary of Housing and Urban Development
shall not enact, execute, or take any action to make
effective the planned implementation of risk-based premiums,
which are designed for mortgage lenders to offer borrowers an
FHA-insured product that provides a range of mortgage
insurance premium pricing, based on the risk the insurance
contract represents, as such planned implementation was set
forth in the Notice published in the Federal Register on
September 20, 2007 (Vol. 72, No. 182, Page 53872).
Subtitle B--Manufactured Housing Loan Modernization
SEC. 141. SHORT TITLE.
This subtitle may be cited as the ``FHA Manufactured
Housing Loan Modernization Act of 2008''.
SEC. 142. PURPOSES.
The purposes of this subtitle 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. 143. 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. 144. 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 2008 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 title.
SEC. 145. 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 title, 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 2008.''
(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).''.
SEC. 146. 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. 147. TECHNICAL CORRECTIONS.
(a) Dates.--Subsection (a) of section 2 of the National
Housing Act (12 U.S.C. 1703(a)) is amended--
[[Page H3209]]
(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. 148. 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 title, 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 title,
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. 149. 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. 150. 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 title, 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.''.
TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS
SEC. 201. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT
FOR CERTAIN HOUSING LOANS GUARANTEED BY THE
SECRETARY OF VETERANS AFFAIRS.
Notwithstanding subparagraph (C) of section 3703(a)(1) of
title 38, United States Code, for purposes of any loan
described in subparagraph (A)(i)(IV) of such section that is
originated during the period beginning on the date of the
enactment of this Act and ending on December 31, 2008, the
term ``maximum guaranty amount'' shall mean an amount equal
to 25 percent of the higher of--
(1) the limitation determined under section 305(a)(2) of
the Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)(2)) for the calendar year in which the loan is
originated for a single-family residence; or
(2) 125 percent of the area median price for a single-
family residence, but in no case to exceed 175 percent of the
limitation determined under such section 305(a)(2) for the
calendar year in which the loan is originated for a single-
family residence.
SEC. 202. COUNSELING ON MORTGAGE FORECLOSURES FOR MEMBERS OF
THE ARMED FORCES RETURNING FROM SERVICE ABROAD.
(a) In General.--The Secretary of Defense shall develop and
implement a program to advise members of the Armed Forces
(including members of the National Guard and Reserve) who are
returning from service on active duty abroad (including
service in Operation Iraqi Freedom and Operation Enduring
Freedom) on actions to be taken by such members to prevent or
forestall mortgage foreclosures.
(b) Elements.--The program required by subsection (a) shall
include the following:
(1) Credit counseling.
(2) Home mortgage counseling.
(3) Such other counseling and information as the Secretary
considers appropriate for purposes of the program.
(c) Timing of Provision of Counseling.--Counseling and
other information under the program required by subsection
(a) shall be provided to a member of the Armed Forces covered
by the program as soon as practicable after the return of the
member from service as described in subsection (a).
SEC. 203. ENHANCEMENT OF PROTECTIONS FOR SERVICEMEMBERS
RELATING TO MORTGAGES AND MORTGAGE
FORECLOSURES.
(a) Extension of Period of Protections Against Mortgage
Foreclosures.--
(1) Extension of protection period.--Subsection (c) of
section 303 of the Servicemembers Civil Relief Act (50 U.S.C.
App. 533) is amended by striking ``90 days'' and inserting
``9 months''.
(2) Extension of stay of proceedings period.--Subsection
(b) of such section is amended by striking ``90 days'' and
inserting ``9 months''.
(b) Treatment of Mortgages as Obligations Subject to
Interest Rate Limitation.--Section 207 of the Servicemembers
Civil Relief Act (50 U.S.C. App. 527) is amended--
(1) in subsection (a)(1), by striking ``in excess of 6
percent'' the second place it appears and all that follows
and inserting ``in excess of 6 percent--
``(A) during the period of military service and one year
thereafter, in the case of an obligation or liability
consisting of a mortgage, trust deed, or other security in
the nature of a mortgage; or
``(B) during the period of military service, in the case of
any other obligation or liability.''; and
(2) by striking subsection (d) and inserting the following
new subsection:
``(d) Definitions.--In this section:
``(1) Interest.--The term `interest' includes service
charges, renewal charges, fees, or any other charges (except
bona fide insurance) with respect to an obligation or
liability.
``(2) Obligation or liability.--The term `obligation or
liability' includes an obligation or liability consisting of
a mortgage, trust deed, or other security in the nature of a
mortgage.''.
(c) Effective Date; Sunset.--
(1) Effective date.--The amendment made by subsection (a)
shall take effect on the date of the enactment of this Act.
(2) Sunset.--The amendments made by subsection (a) shall
expire on December 31, 2010. Effective January 1, 2011, the
provisions of subsections (b) and (c) of section 303 of the
[[Page H3210]]
Servicemembers Civil Relief Act, as in effect on the day
before the date of the enactment of this Act, are hereby
revived.
TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND
FORECLOSED HOMES
SEC. 301. EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF
ABANDONED AND FORECLOSED HOMES.
(a) Direct Appropriations.--There are appropriated out of
any money in the Treasury not otherwise appropriated for the
fiscal year 2008, $4,000,000,000, to remain available until
expended, for assistance to States and units of general local
government (as such terms are defined in section 102 of the
Housing and Community Development Act of 1974 (42 U.S.C.
5302)) for the redevelopment of abandoned and foreclosed upon
homes and residential properties.
(b) Allocation of Appropriated Amounts.--
(1) In general.--The amounts appropriated or otherwise made
available to States and units of general local government
under this section shall be allocated based on a funding
formula established by the Secretary of Housing and Urban
Development (in this title referred to as the ``Secretary'').
(2) Formula to be devised swiftly.--The funding formula
required under paragraph (1) shall be established not later
than 60 days after the date of enactment of this section.
(3) Criteria.--The funding formula required under paragraph
(1) shall ensure that any amounts appropriated or otherwise
made available under this section are allocated to States and
units of general local government with the greatest need, as
such need is determined in the discretion of the Secretary
based on--
(A) the number and percentage of home foreclosures in each
State or unit of general local government;
(B) the number and percentage of homes financed by a
subprime mortgage related loan in each State or unit of
general local government; and
(C) the number and percentage of homes in default or
delinquency in each State or unit of general local
government.
(4) Distribution.--Amounts appropriated or otherwise made
available under this section shall be distributed according
to the funding formula established by the Secretary under
paragraph (1) not later than 30 days after the establishment
of such formula.
(c) Use of Funds.--
(1) In general.--Any State or unit of general local
government that receives amounts pursuant to this section
shall, not later than 18 months after the receipt of such
amounts, use such amounts to purchase and redevelop abandoned
and foreclosed homes and residential properties.
(2) Priority.--Any State or unit of general local
government that receives amounts pursuant to this section
shall in distributing such amounts give priority emphasis and
consideration to those metropolitan areas, metropolitan
cities, urban areas, rural areas, low- and moderate-income
areas, and other areas with the greatest need, including
those--
(A) with the greatest percentage of home foreclosures;
(B) with the highest percentage of homes financed by a
subprime mortgage related loan; and
(C) identified by the State or unit of general local
government as likely to face a significant rise in the rate
of home foreclosures.
(3) Eligible uses.--Amounts made available under this
section may be used to--
(A) establish financing mechanisms for purchase and
redevelopment of foreclosed upon homes and residential
properties, including such mechanisms as soft-seconds, loan
loss reserves, and shared-equity loans for low- and moderate-
income homebuyers;
(B) purchase and rehabilitate homes and residential
properties that have been abandoned or foreclosed upon, in
order to sell, rent, or redevelop such homes and properties;
(C) establish land banks for homes that have been
foreclosed upon; and
(D) demolish blighted structures.
(d) Limitations.--
(1) On purchases.--Any purchase of a foreclosed upon home
or residential property under this section shall be at a
discount from the current market appraised value of the home
or property, taking into account its current condition, and
such discount shall ensure that purchasers are paying below-
market value for the home or property.
(2) Sale of homes.--If an abandoned or foreclosed upon home
or residential property is purchased, redeveloped, or
otherwise sold to an individual as a primary residence, then
such sale shall be in an amount equal to or less than the
cost to acquire and redevelop or rehabilitate such home or
property up to a decent, safe, and habitable condition.
(3) Reinvestment of profits.--
(A) Profits from sales, rentals, and redevelopment.--
(i) 5-year reinvestment period.--During the 5-year period
following the date of enactment of this Act, any revenue
generated from the sale, rental, redevelopment,
rehabilitation, or any other eligible use that is in excess
of the cost to acquire and redevelop (including reasonable
development fees) or rehabilitate an abandoned or foreclosed
upon home or residential property shall be provided to and
used by the State or unit of general local government in
accordance with, and in furtherance of, the intent and
provisions of this section.
(ii) Deposits in the treasury.--
(I) Profits.--Upon the expiration of the 5-year period set
forth under clause (i), any revenue generated from the sale,
rental, redevelopment, rehabilitation, or any other eligible
use that is in excess of the cost to acquire and redevelop
(including reasonable development fees) or rehabilitate an
abandoned or foreclosed upon home or residential property
shall be deposited in the Treasury of the United States as
miscellaneous receipts, unless the Secretary approves a
request to use the funds for purposes under this Act.
(II) Other amounts.--Upon the expiration of the 5-year
period set forth under clause (i), any other revenue not
described under subclause (I) generated from the sale,
rental, redevelopment, rehabilitation, or any other eligible
use of an abandoned or foreclosed upon home or residential
property shall be deposited in the Treasury of the United
States as miscellaneous receipts.
(B) Other revenues.--Any revenue generated under
subparagraphs (A), (C) or (D) of subsection (c)(3) shall be
provided to and used by the State or unit of general local
government in accordance with, and in furtherance of, the
intent and provisions of this section.
(e) Rules of Construction.--
(1) In general.--Except as otherwise provided by this
section, amounts appropriated, revenues generated, or amounts
otherwise made available to States and units of general local
government under this section shall be treated as though such
funds were community development block grant funds under
title I of the Housing and Community Development Act of 1974
(42 U.S.C. 5301 et seq.).
(2) No match.--No matching funds shall be required in order
for a State or unit of general local government to receive
any amounts under this section.
(f) Authority to Specify Alternative Requirements.--
(1) In general.--In administering any amounts appropriated
or otherwise made available under this section, the Secretary
may specify alternative requirements to any provision under
title I of the Housing and Community Development Act of 1974
(except for those related to fair housing, nondiscrimination,
labor standards, and the environment) in accordance with the
terms of this section and for the sole purpose of expediting
the use of such funds.
(2) Notice.--The Secretary shall provide written notice of
its intent to exercise the authority to specify alternative
requirements under paragraph (1) to the Committee on Banking,
Housing and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives not later
than 10 business days before such exercise of authority is to
occur.
(3) Low and moderate income requirement.--
(A) In general.--Notwithstanding the authority of the
Secretary under paragraph (1)--
(i) all of the funds appropriated or otherwise made
available under this section shall be used with respect to
individuals and families whose income does not exceed 120
percent of area median income; and
(ii) not less than 25 percent of the funds appropriated or
otherwise made available under this section shall be used for
the purchase and redevelopment of abandoned or foreclosed
upon homes or residential properties that will be used to
house individuals or families whose incomes do not exceed 50
percent of area median income.
(B) Recurrent requirement.--The Secretary shall, by rule or
order, ensure, to the maximum extent practicable and for the
longest feasible term, that the sale, rental, or
redevelopment of abandoned and foreclosed upon homes and
residential properties under this section remain affordable
to individuals or families described in subparagraph (A).
(g) Periodic Audits.--In consultation with the Secretary of
Housing and Urban Development, the Comptroller General of the
United States shall conduct periodic audits to ensure that
funds appropriated, made available, or otherwise distributed
under this section are being used in a manner consistent with
the criteria provided in this section.
SEC. 302. NATIONWIDE DISTRIBUTION OF RESOURCES.
Notwithstanding any other provision of this Act or the
amendments made by this Act, each State shall receive not
less than 0.5 percent of funds made available under section
301 (relating to emergency assistance for the redevelopment
of abandoned and foreclosed homes).
SEC. 303. LIMITATION ON USE OF FUNDS WITH RESPECT TO EMINENT
DOMAIN.
No State or unit of general local government may use any
amounts received pursuant to section 301 to fund any project
that seeks to use the power of eminent domain, unless eminent
domain is employed only for a public use: Provided, That for
purposes of this section, public use shall not be construed
to include economic development that primarily benefits
private entities.
SEC. 304. LIMITATION ON DISTRIBUTION OF FUNDS.
(a) In General.--None of the funds made available under
this title or title IV shall be distributed to--
(1) an organization which has been indicted for a violation
under Federal law relating to an election for Federal office;
or
(2) an organization which employs applicable individuals.
(b) Applicable Individuals Defined.--In this section, the
term ``applicable individual'' means an individual who--
(1) is--
(A) employed by the organization in a permanent or
temporary capacity;
(B) contracted or retained by the organization; or
(C) acting on behalf of, or with the express or apparent
authority of, the organization; and
(2) has been indicted for a violation under Federal law
relating to an election for Federal office.
SEC. 305. COUNSELING INTERMEDIARIES.
Notwithstanding any other provision of this Act, the amount
appropriated under section
[[Page H3211]]
301(a) of this Act shall be $3,920,000,000 and the amount
appropriated under section 401 of this Act shall be
$180,000,000: Provided, That of amounts appropriated under
such section 401 $30,000,000 shall be used by the
Neighborhood Reinvestment Corporation (referred to in this
section as the ``NRC'') to make grants to counseling
intermediaries approved by the Department of Housing and
Urban Development or the NRC to hire attorneys to assist
homeowners who have legal issues directly related to the
homeowner's foreclosure, delinquency or short sale. Such
attorneys shall be capable of assisting homeowners of owner-
occupied homes with mortgages in default, in danger of
default, or subject to or at risk of foreclosure and who have
legal issues that cannot be handled by counselors already
employed by such intermediaries: Provided, That of the
amounts provided for in the prior provisos the NRC shall give
priority consideration to counseling intermediaries and legal
organizations that (1) provide legal assistance in the 100
metropolitan statistical areas (as defined by the Director of
the Office of Management and Budget) with the highest home
foreclosure rates, and (2) have the capacity to begin using
the financial assistance within 90 days after receipt of the
assistance: Provided further, That no funds provided under
this Act shall be used to provide, obtain, or arrange on
behalf of a homeowner, legal representation involving or for
the purposes of civil litigation.
TITLE IV--HOUSING COUNSELING RESOURCES
SEC. 401. HOUSING COUNSELING RESOURCES.
There are appropriated out of any money in the Treasury not
otherwise appropriated for the fiscal year 2008, for an
additional amount for the ``Neighborhood Reinvestment
Corporation--Payment to the Neighborhood Reinvestment
Corporation'' $100,000,000, to remain available until
September 30, 2008, for foreclosure mitigation activities
under the terms and conditions contained in the second
undesignated paragraph (beginning with the phrase ``For an
additional amount'') under the heading ``Neighborhood
Reinvestment Corporation--Payment to the Neighborhood
Reinvestment Corporation'' of Public Law 110-161.
SEC. 402. CREDIT COUNSELING.
(a) In General.--Entities approved by the Neighborhood
Reinvestment Corporation or the Secretary and State housing
finance entities receiving funds under this title shall work
to identify and coordinate with non-profit organizations
operating national or statewide toll-free foreclosure
prevention hotlines, including those that--
(1) serve as a consumer referral source and data repository
for borrowers experiencing some form of delinquency or
foreclosure;
(2) connect callers with local housing counseling agencies
approved by the Neighborhood Reinvestment Corporation or the
Secretary to assist with working out a positive resolution to
their mortgage delinquency or foreclosure; or
(3) facilitate or offer free assistance to help homeowners
to understand their options, negotiate solutions, and find
the best resolution for their particular circumstances.
TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT
SEC. 501. SHORT TITLE.
This title may be cited as the ``Mortgage Disclosure
Improvement Act of 2008''.
SEC. 502. ENHANCED MORTGAGE LOAN DISCLOSURES.
(a) Truth in Lending Act Disclosures.--Section 128(b)(2) of
the Truth in Lending Act (15 U.S.C. 1638(b)(2)) is amended--
(1) by inserting ``(A)'' before ``In the'';
(2) by striking ``a residential mortgage transaction, as
defined in section 103(w)'' and inserting ``any extension of
credit that is secured by the dwelling of a consumer'';
(3) by striking ``before the credit is extended, or'';
(4) by inserting ``, which shall be at least 7 business
days before consummation of the transaction'' after ``written
application'';
(5) by striking ``, whichever is earlier''; and
(6) by striking ``If the'' and all that follows through the
end of the paragraph and inserting the following:
``(B) In the case of an extension of credit that is secured
by the dwelling of a consumer, the disclosures provided under
subparagraph (A), shall be in addition to the other
disclosures required by subsection (a), and shall--
``(i) state in conspicuous type size and format, the
following: `You are not required to complete this agreement
merely because you have received these disclosures or signed
a loan application.'; and
``(ii) be provided in the form of final disclosures at the
time of consummation of the transaction, in the form and
manner prescribed by this section.
``(C) In the case of an extension of credit that is secured
by the dwelling of a consumer, under which the annual rate of
interest is variable, or with respect to which the regular
payments may otherwise be variable, in addition to the other
disclosures required by subsection (a), the disclosures
provided under this subsection shall do the following:
``(i) Label the payment schedule as follows: `Payment
Schedule: Payments Will Vary Based on Interest Rate Changes'.
``(ii) State in conspicuous type size and format examples
of adjustments to the regular required payment on the
extension of credit based on the change in the interest rates
specified by the contract for such extension of credit. Among
the examples required to be provided under this clause is an
example that reflects the maximum payment amount of the
regular required payments on the extension of credit, based
on the maximum interest rate allowed under the contract, in
accordance with the rules of the Board. Prior to issuing any
rules pursuant to this clause, the Board shall conduct
consumer testing to determine the appropriate format for
providing the disclosures required under this subparagraph to
consumers so that such disclosures can be easily understood.
``(D) In any case in which the disclosure statement under
subparagraph (A) contains an annual percentage rate of
interest that is no longer accurate, as determined under
section 107(c), the creditor shall furnish an additional,
corrected statement to the borrower, not later than 3
business days before the date of consummation of the
transaction.
``(E) The consumer shall receive the disclosures required
under this paragraph before paying any fee to the creditor or
other person in connection with the consumer's application
for an extension of credit that is secured by the dwelling of
a consumer. If the disclosures are mailed to the consumer,
the consumer is considered to have received them 3 business
days after they are mailed. A creditor or other person may
impose a fee for obtaining the consumer's credit report
before the consumer has received the disclosures under this
paragraph, provided the fee is bona fide and reasonable in
amount.
``(F) Waiver of timeliness of disclosures.--To expedite
consummation of a transaction, if the consumer determines
that the extension of credit is needed to meet a bona fide
personal financial emergency, the consumer may waive or
modify the timing requirements for disclosures under
subparagraph (A), provided that--
``(i) the term `bona fide personal emergency' may be
further defined in regulations issued by the Board;
``(ii) the consumer provides to the creditor a dated,
written statement describing the emergency and specifically
waiving or modifying those timing requirements, which
statement shall bear the signature of all consumers entitled
to receive the disclosures required by this paragraph; and
``(iii) the creditor provides to the consumers at or before
the time of such waiver or modification, the final
disclosures required by paragraph (1).
``(G) The requirements of subparagraphs (B), (C), (D) and
(E) shall not apply to extensions of credit relating to plans
described in section 101(53D) of title 11, United States
Code.''.
(b) Civil Liability.--Section 130(a) of the Truth in
Lending Act (15 U.S.C. 1640(a)) is amended--
(1) in paragraph (2)(A)(iii), by striking ``not less than
$200 or greater than $2,000'' and inserting ``not less than
$400 or greater than $4,000''; and
(2) in the penultimate sentence of the undesignated matter
following paragraph (4)--
(A) by inserting ``or section 128(b)(2)(C)(ii),'' after
``128(a),''; and
(B) by inserting ``or section 128(b)(2)(C)(ii)'' before the
period.
(c) Effective Dates.--
(1) General disclosures.--Except as provided in paragraph
(2), the amendments made by subsection (a) shall become
effective 12 months after the date of enactment of this Act.
(2) Variable interest rates.--Subparagraph (C) of section
128(b)(2) of the Truth in Lending Act (15 U.S.C.
1638(b)(2)(C)), as added by subsection (a) of this section,
shall become effective on the earlier of--
(A) the compliance date established by the Board for such
purpose, by regulation; or
(B) 30 months after the date of enactment of this Act.
SEC. 503. COMMUNITY DEVELOPMENT INVESTMENT AUTHORITY FOR
DEPOSITORY INSTITUTIONS.
(a) Depository Institution Community Development
Investments.--
(1) National banks.--The first sentence of the paragraph
designated as the ``Eleventh'' of section 5136 of the Revised
Statutes of the United States (12 U.S.C. 24) (as amended by
section 305(a) of the Financial Services Regulatory Relief
Act of 2006) is amended by striking ``promotes the public
welfare by benefitting primarily'' and inserting ``is
designed primarily to promote the public welfare, including
the welfare of''.
(2) State member banks.--The first sentence of the 23rd
paragraph of section 9 of the Federal Reserve Act (12 U.S.C.
338a) is amended by striking ``promotes the public welfare by
benefitting primarily'' and inserting ``is designed primarily
to promote the public welfare, including the welfare of''.
SEC. 504. FEDERAL HOME LOAN BANK REFINANCING AUTHORITY FOR
CERTAIN RESIDENTIAL MORTGAGE LOANS.
Section 10(j)(2) of the Federal Home Loan Bank Act (12
U.S.C. 1430(j)(2) is amended--
(1) in subparagraph (A), by striking ``or'' at the end;
(2) in subparagraph (B), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following:
``(C) during the 2-year period beginning on the date of
enactment of this subparagraph, refinance loans that are
secured by a first mortgage on a primary residence of any
family having an income at or below 80 percent of the median
income for the area.''.
TITLE VI--TAX-RELATED PROVISIONS
SEC. 601. ELECTION FOR 4-YEAR CARRYBACK OF CERTAIN NET
OPERATING LOSSES AND TEMPORARY SUSPENSION OF 90
PERCENT AMT LIMIT.
(a) In General.--
(1) 4-year carryback of certain losses.--Subparagraph (H)
of section 172(b)(1) of the Internal Revenue Code of 1986
(relating to years to which loss may be carried) is amended
to read as follows:
``(H) Additional carryback of certain losses.--
``(i) Taxable years ending during 2001 and 2002.--In the
case of a net operating loss for any
[[Page H3212]]
taxable year ending during 2001 or 2002, subparagraph (A)(i)
shall be applied by substituting `5' for `2' and subparagraph
(F) shall not apply.
``(ii) Taxable years ending during 2008 and 2009.--In the
case of a net operating loss with respect to any eligible
taxpayer (within the meaning of section 168(k)(4)) for any
taxable year ending during 2008 or 2009--
``(I) subparagraph (A)(i) shall be applied by substituting
`4' for `2',
``(II) subparagraph (E)(ii) shall be applied by
substituting `3' for `2', and
``(III) subparagraph (F) shall not apply.''.
(2) Temporary suspension of 90 percent limit on certain nol
carrybacks and carryovers.--
(A) In general.--Section 56(d) of the Internal Revenue Code
of 1986 (relating to definition of alternative tax net
operating loss deduction) is amended by adding at the end the
following new paragraph:
``(3) Additional adjustments.--For purposes of paragraph
(1)(A), in the case of an eligible taxpayer (within the
meaning of section 168(k)(4)), the amount described in
subclause (I) of paragraph (1)(A)(ii) shall be increased by
the amount of the net operating loss deduction allowable for
the taxable year under section 172 attributable to the sum
of--
``(A) carrybacks of net operating losses from taxable years
ending during 2008 and 2009, and
``(B) carryovers of net operating losses to taxable years
ending during 2008 or 2009.''.
(B) Conforming amendment.--Subclause (I) of section
56(d)(1)(A)(i) of such Code is amended by inserting ``amount
of such'' before ``deduction described in clause (ii)(I)''.
(3) Effective dates.--
(A) Net operating losses.--The amendments made by paragraph
(1) shall apply to net operating losses arising in taxable
years ending in 2008 or 2009.
(B) Suspension of amt limitation.--The amendments made by
paragraph (2) shall apply to taxable years ending after
December 31, 1997.
(4) Anti-abuse rules.--The Secretary of Treasury or the
Secretary's designee shall prescribe such rules as are
necessary to prevent the abuse of the purposes of the
amendments made by this subsection, including anti-stuffing
rules, anti-churning rules (including rules relating to sale-
leasebacks), and rules similar to the rules under section
1091 of the Internal Revenue Code of 1986 relating to losses
from wash sales.
(b) Election Among Stimulus Incentives.--
(1) In general.--
(A) Bonus depreciation.--Section 168(k) of the Internal
Revenue Code of 1986 (relating to special allowance for
certain property acquired after December 31, 2007, and before
January 1, 2009), as amended by the Economic Stimulus Act of
2008, is amended--
(i) in paragraph (1), by inserting ``placed in service by
an eligible taxpayer'' after ``any qualified property'', and
(ii) by adding at the end the following new paragraph:
``(4) Eligible taxpayer.--
``(A) In general.--At such time and in such manner as the
Secretary shall prescribe, each taxpayer may elect to be an
eligible taxpayer with respect to 1 (and only 1) of the
following:
``(i) This subsection and section 179(b)(7).
``(ii) The application of section 56(d)(1)(A)(ii)(I) and
section 172(b)(1)(H)(ii) in connection with net operating
losses relating to taxable years ending during 2008 and 2009.
``(B) Eligible taxpayer.--For purposes of each of the
provisions described in subparagraph (A), a taxpayer shall
only be treated as an eligible taxpayer with respect to the
provision with respect to which the taxpayer made the
election under subparagraph (A).
``(C) Election irrevocable.--An election under subparagraph
(A) may not be revoked except with the consent of the
Secretary.''.
(B) Effective date.--The amendments made by this paragraph
shall take effect as if included in section 103 of the
Economic Stimulus Act of 2008.
(2) Election for increased expensing.--
(A) In general.--Paragraph (7) of section 179(b) of the
Internal Revenue Code of 1986 (relating to limitations), as
added by the Economic Stimulus Act of 2008, is amended to
read as follows:
``(7) Special rule for eligible taxpayers in 2008.--In the
case of any taxable year of any eligible taxpayer (within the
meaning of section 168(k)(4)) beginning in 2008--
``(A) the dollar limitation under paragraph (1) shall be
$250,000,
``(B) the dollar limitation under paragraph (2) shall be
$800,000, and
``(C) the amounts described in subparagraphs (A) and (B)
shall not be adjusted under paragraph (5).''.
(B) Effective date.--The amendment made by this paragraph
shall take effect as if included in section 102 of the
Economic Stimulus Act of 2008.
SEC. 602. MODIFICATIONS ON USE OF QUALIFIED MORTGAGE BONDS;
TEMPORARY INCREASED VOLUME CAP FOR CERTAIN
HOUSING BONDS.
(a) Use of Qualified Mortgage Bonds Proceeds for Subprime
Refinancing Loans.--Section 143(k) of the Internal Revenue
Code of 1986 (relating to other definitions and special
rules) is amended by adding at the end the following new
paragraph:
``(12) Special rules for subprime refinancings.--
``(A) In general.--Notwithstanding the requirements of
subsection (i)(1), the proceeds of a qualified mortgage issue
may be used to refinance a mortgage on a residence which was
originally financed by the mortgagor through a qualified
subprime loan.
``(B) Special rules.--In applying this paragraph to any
case in which the proceeds of a qualified mortgage issue are
used for any refinancing described in subparagraph (A)--
``(i) subsection (a)(2)(D)(i) (relating to proceeds must be
used within 42 months of date of issuance) shall be applied
by substituting `12-month period' for `42-month period' each
place it appears,
``(ii) subsection (d) (relating to 3-year requirement)
shall not apply, and
``(iii) subsection (e) (relating to purchase price
requirement) shall be applied by using the market value of
the residence at the time of refinancing in lieu of the
acquisition cost.
``(C) Qualified subprime loan.--The term `qualified
subprime loan' means an adjustable rate single-family
residential mortgage loan originated after December 31, 2001,
and before January 1, 2008, that the bond issuer determines
would be reasonably likely to cause financial hardship to the
borrower if not refinanced.
``(D) Termination.--This paragraph shall not apply to any
bonds issued after December 31, 2010.''.
(b) Increased Volume Cap for Certain Bonds.--
(1) In general.--Subsection (d) of section 146 of the
Internal Revenue Code of 1986 (relating to State ceiling) is
amended by adding at the end the following new paragraph:
``(5) Increase and set aside for housing bonds for 2008.--
``(A) Increase for 2008.--In the case of calendar year
2008, the State ceiling for each State shall be increased by
an amount equal to the greater of--
``(i) $10,000,000,000 multiplied by a fraction--
``(I) the numerator of which is the population of such
State, and
``(II) the denominator of which is the total population of
all States, or
``(ii) the amount determined under subparagraph (B).
``(B) Minimum amount.--The amount determined under this
subparagraph is--
``(i) in the case of a State (other than a possession),
$90,300,606, and
``(ii) in the case of a possession of the United States
with a population less than the least populous State (other
than a possession), the product of--
``(I) a fraction the numerator of which is $90,300,606 and
the denominator of which is population of the least populous
State (other than a possession), and
``(II) the population of such possession.
In the case of any possession of the United States not
described in clause (ii), the amount determined under this
subparagraph shall be zero.
``(C) Set aside.--
``(i) In general.--Any amount of the State ceiling for any
State which is attributable to an increase under this
paragraph shall be allocated solely for one or more qualified
purposes.
``(ii) Qualified purpose.--For purposes of this paragraph,
the term `qualified purpose' means--
``(I) the issuance of exempt facility bonds used solely to
provide qualified residential rental projects, or
``(II) a qualified mortgage issue (determined by
substituting `12-month period' for `42-month period' each
place it appears in section 143(a)(2)(D)(i)).''.
(2) Carryforward of unused limitations.--Subsection (f) of
section 146 of such Code (relating to elective carryforward
of unused limitation for specified purpose) is amended by
adding at the end the following new paragraph:
``(6) Special rules for increased volume cap under
subsection (d)(5).--
``(A) In general.--No amount which is attributable to the
increase under subsection (d)(5) may be used--
``(i) for a carryforward purpose other than a qualified
purpose (as defined in subsection (d)(5)), and
``(ii) to issue any bond after calendar year 2010.
``(B) Ordering rules.--For purposes of subparagraph (A),
any carryforward of an issuing authority's volume cap for
calendar year 2008 shall be treated as attributable to such
increase to the extent of such increase.''.
(c) Alternative Minimum Tax Exemption for Qualified
Mortgage Bonds, Qualified Veterans' Mortgage Bonds, and Bonds
for Qualified Residential Rental Projects.--
(1) In general.--Clause (ii) of section 57(a)(5)(C) of the
Internal Revenue Code of 1986 (relating to specified private
activity bonds) is amended by striking ``shall not include''
and all that follows and inserting ``shall not include--
``(I) any qualified 501(c)(3) bond (as defined in section
145), or
``(II) any qualified mortgage bond (as defined in section
143(a)), any qualified veterans' mortgage bond (as defined in
section 143(b)), or any exempt facility bond (as defined in
section 142(a)) issued as part of an issue 95 percent or more
of the net proceeds of which are to be used to provide
qualified residential rental projects (as defined in section
142(d)), but only if such bond is issued after the date of
the enactment of this subclause and before January 1, 2011.
Subclause (II) shall not apply to a refunding bond unless
such subclause applied to the refunded bond (or in the case
of a series of refundings, the original bond).''.
(2) Conforming amendment.--The heading for section
57(a)(5)(C)(ii) of such Code is amended by striking
``qualified 501(c)(3) bonds'' and inserting ``certain
bonds''.
(d) Effective Date.--The amendments made by this section
shall apply to bonds issued after the date of the enactment
of this Act.
SEC. 603. CREDIT FOR CERTAIN HOME PURCHASES.
(a) Allowance of Credit.--Subpart A of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to nonrefundable personal credits) is amended
by inserting after section 25D the following new section:
[[Page H3213]]
``SEC. 25E. CREDIT FOR CERTAIN HOME PURCHASES.
``(a) Allowance of Credit.--
``(1) In general.--In the case of an individual who is a
purchaser of a qualified principal residence during the
taxable year, there shall be allowed as a credit against the
tax imposed by this chapter an amount equal to so much of the
purchase price of the residence as does not exceed $7,000.
``(2) Allocation of credit amount.--The amount of the
credit allowed under paragraph (1) shall be equally divided
among the 2 taxable years beginning with the taxable year in
which the purchase of the qualified principal residence is
made.
``(b) Limitations.--
``(1) Date of purchase.--The credit allowed under
subsection (a) shall be allowed only with respect to
purchases made--
``(A) after the date of the enactment of this section, and
``(B) before the date that is 12 months after such date.
``(2) Limitation based on amount of tax.--In the case of a
taxable year to which section 26(a)(2) does not apply, the
credit allowed under subsection (a) for any taxable year
shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this subpart
(other than this section and section 23) for the taxable
year.
``(3) One-time only.--
``(A) In general.--If a credit is allowed under this
section in the case of any individual (and such individual's
spouse, if married) with respect to the purchase of any
qualified principal residence, no credit shall be allowed
under this section in any taxable year with respect to the
purchase of any other qualified principal residence by such
individual or a spouse of such individual.
``(B) Joint purchase.--In the case of a purchase of a
qualified principal residence by 2 or more unmarried
individuals or by 2 married individuals filing separately, no
credit shall be allowed under this section if a credit under
this section has been allowed to any of such individuals in
any taxable year with respect to the purchase of any other
qualified principal residence.
``(c) Qualified Principal Residence.--For purposes of this
section--
``(1) In general.--The term `qualified principal residence'
means an eligible single-family residence that is purchased
to be the principal residence of the purchaser.
``(2) Eligible single-family residence.--
``(A) In general.--The term `eligible single-family
residence' means a single-family structure that is a
residence--
``(i) upon which foreclosure has been filed pursuant to the
laws of the State in which the residence is located, and
``(ii) which--
``(I) is a new previously unoccupied residence for which a
building permit was issued and construction began on or
before September 1, 2007, or
``(II) was occupied as a principal residence by the
mortgagor for at least 1 year prior to the foreclosure
filing.
``(B) Certification.--In the case of an eligible single-
family residence described in subparagraph (A)(ii)(I), no
credit shall be allowed under this section unless the
purchaser submits a certification by the seller of such
residence that such residence meets the requirements of such
subparagraph.
``(3) Principal residence.--The term `principal residence'
has the same meaning as when used in section 121.
``(d) Denial of Double Benefit.--No credit shall be allowed
under this section for any purchase for which a credit is
allowed under section 1400C.
``(e) Recapture in the Case of Certain Dispositions.--In
the event that a taxpayer--
``(1) disposes of the qualified principal residence with
respect to which a credit is allowed under subsection (a), or
``(2) fails to occupy such residence as the taxpayer's
principal residence,
at any time within 24 months after the date on which the
taxpayer purchased such residence, then the remaining portion
of the credit allowed under subsection (a) shall be
disallowed in the taxable year during which such disposition
occurred or in which the taxpayer failed to occupy the
residence as a principal residence, and in any subsequent
taxable year in which the remaining portion of the credit
would, but for this subsection, have been allowed.
``(f) Special Rules.--
``(1) Joint purchase.--
``(A) Married individuals filing separately.--In the case
of 2 married individuals filing separately, subsection (a)
shall be applied to each such individual by substituting
`$3,500' for `$7,000' in paragraph (1) thereof.
``(B) Unmarried individuals.--If 2 or more individuals who
are not married purchase a qualified principal residence, the
amount of the credit allowed under subsection (a) shall be
allocated among such individuals in such manner as the
Secretary may prescribe, except that the total amount of the
credits allowed to all such individuals shall not exceed
$7,000.
``(2) Purchase; purchase price.--Rules similar to the rules
of paragraphs (2) and (3) of section 1400C(e) (as in effect
on the date of the enactment of this section) shall apply for
purposes of this section.
``(3) Reporting requirement.--Rules similar to the rules of
section 1400C(f) (as so in effect) shall apply for purposes
of this section.
``(g) Basis Adjustment.--For purposes of this subtitle, if
a credit is allowed under this section with respect to the
purchase of any residence, the basis of such residence shall
be reduced by the amount of the credit so allowed.''.
(b) Conforming Amendments.--
(1) Section 24(b)(3)(B) of the Internal Revenue Code of
1986 is amended by striking ``and 25B'' and inserting ``,
25B, and 25E''.
(2) Section 25(e)(1)(C)(ii) of such Code is amended by
inserting ``25E,'' after ``25D,''.
(3) Section 25B(g)(2) of such Code is amended by striking
``section 23'' and inserting ``sections 23 and 25E''.
(4) Section 25D(c)(2) of such Code is amended by striking
``and 25B'' and inserting ``25B, and 25E''.
(5) Section 26(a)(1) of such Code is amended by striking
``and 25B'' and inserting ``25B, and 25E''.
(6) Section 904(i) of such Code is amended by striking
``and 25B'' and inserting ``25B, and 25E''.
(7) Subsection (a) of section 1016 of such Code is amended
by striking ``and'' at the end of paragraph (36), by striking
the period at the end of paragraph (37) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(38) to the extent provided in section 25E(g).''.
(8) Section 1400C(d)(2) of such Code is amended by striking
``and 25D'' and inserting ``25D, and 25E''.
(c) Clerical Amendment.--The table of sections for subpart
A of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by inserting after the item
relating to section 25D the following new item:
``Sec. 25E. Credit for certain home purchases.''.
(d) Effective Date.--The amendments made by this section
shall apply to purchases in taxable years ending after the
date of the enactment of this Act.
(e) Application of EGTRRA Sunset.--The amendment made by
subsection (b)(1) shall be subject to title IX of the
Economic Growth and Tax Relief Reconciliation Act of 2001 in
the same manner as the provisions of such Act to which such
amendment relates.
SEC. 604. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY
TAXES FOR NONITEMIZERS.
(a) In General.--Section 63(c)(1) of the Internal Revenue
Code of 1986 (defining standard deduction) is amended by
striking ``and'' at the end of subparagraph (A), by striking
the period at the end of subparagraph (B) and inserting ``,
and'', and by adding at the end the following new
subparagraph:
``(C) in the case of any taxable year beginning in 2008,
the real property tax deduction.''.
(b) Definition.--Section 63(c) of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
paragraph:
``(8) Real property tax deduction.--
``(A) In general.--For purposes of paragraph (1), the real
property tax deduction is so much of the amount of the
eligible State and local real property taxes paid or accrued
by the taxpayer during the taxable year which do not exceed
$500 ($1,000 in the case of a joint return).
``(B) Eligible state and local real property taxes.--For
purposes of subparagraph (A), the term `eligible State and
local real property taxes' means State and local real
property taxes (within the meaning of section 164), but only
if the rate of tax for all residential real property taxes in
the jurisdiction has not been increased at any time after
April 2, 2008, and before January 1, 2009.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 605. ELECTION TO ACCELERATE AMT AND R AND D CREDITS IN
LIEU OF BONUS DEPRECIATION.
(a) In General.--Section 168(k), as amended by this Act, is
amended by adding at the end the following new paragraph:
``(5) Election to accelerate amt and r and d credits in
lieu of bonus depreciation.--
``(A) In general.--If a corporation which is an eligible
taxpayer (within the meaning of paragraph (4)) for purposes
of this subsection elects to have this paragraph apply--
``(i) no additional depreciation shall be allowed under
paragraph (1) for any qualified property placed in service
during any taxable year to which paragraph (1) would
otherwise apply, and
``(ii) the limitations described in subparagraph (B) for
such taxable year shall be increased by an aggregate amount
not in excess of the bonus depreciation amount for such
taxable year.
``(B) Limitations to be increased.--The limitations
described in this subparagraph are--
``(i) the limitation under section 38(c), and
``(ii) the limitation under section 53(c).
``(C) Bonus depreciation amount.--For purposes of this
paragraph--
``(i) In general.--The bonus depreciation amount for any
applicable taxable year is an amount equal to the product of
20 percent and the excess (if any) of--
``(I) the aggregate amount of depreciation which would be
determined under this section for property placed in service
during the taxable year if no election under this paragraph
were made, over
``(II) the aggregate amount of depreciation allowable under
this section for property placed in service during the
taxable year.
In the case of property which is a passenger aircraft, the
amount determined under subclause (I) shall be calculated
without regard to the written binding contract limitation
under paragraph (2)(A)(iii)(I).
``(ii) Eligible qualified property.--For purposes of clause
(i), the term `eligible qualified property' means qualified
property under paragraph (2), except that in applying
paragraph (2) for purposes of this clause--
``(I) `March 31, 2008' shall be substituted for `December
31, 2007' each place it appears in subparagraph (A) and
clauses (i) and (ii) of subparagraph (E) thereof,
[[Page H3214]]
``(II) only adjusted basis attributable to manufacture,
construction, or production after March 31, 2008, and before
January 1, 2009, shall be taken into account under
subparagraph (B)(ii) thereof, and
``(III) in the case of property which is a passenger
aircraft, the written binding contract limitation under
subparagraph (A)(iii)(I) thereof shall not apply.
``(iii) Maximum amount.--The bonus depreciation amount for
any applicable taxable year shall not exceed the applicable
limitation under clause (iv), reduced (but not below zero) by
the bonus depreciation amount for any preceding taxable year.
``(iv) Applicable limitation.--For purposes of clause
(iii), the term `applicable limitation' means, with respect
to any eligible taxpayer, the lesser of--
``(I) $40,000,000, or
``(II) 10 percent of the sum of the amounts determined with
respect to the eligible taxpayer under clauses (ii) and (iii)
of subparagraph (D).
``(v) Aggregation rule.--All corporations which are treated
as a single employer under section 52(a) shall be treated as
1 taxpayer for purposes of applying the limitation under this
subparagraph and determining the applicable limitation under
clause (iv).
``(D) Allocation of bonus depreciation amounts.--
``(i) In general.--Subject to clauses (ii) and (iii), the
taxpayer shall, at such time and in such manner as the
Secretary may prescribe, specify the portion (if any) of the
bonus depreciation amount which is to be allocated to each of
the limitations described in subparagraph (B).
``(ii) Business credit limitation.--The portion of the
bonus depreciation amount allocated to the limitation
described in subparagraph (B)(i) shall not exceed an amount
equal to the portion of the credit allowable under section 38
for the taxable year which is allocable to business credit
carryforwards to such taxable year which are--
``(I) from taxable years beginning before January 1, 2006,
and
``(II) properly allocable (determined under the rules of
section 38(d)) to the research credit determined under
section 41(a).
``(iii) Alternative minimum tax credit limitation.--The
portion of the bonus depreciation amount allocated to the
limitation described in subparagraph (B)(ii) shall not exceed
an amount equal to the portion of the minimum tax credit
allowable under section 53 for the taxable year which is
allocable to the adjusted minimum tax imposed for taxable
years beginning before January 1, 2006.
``(E) Credit refundable.--Any aggregate increases in the
credits allowed under section 38 or 53 by reason of this
paragraph shall, for purposes of this title, be treated as a
credit allowed to the taxpayer under subpart C of part IV of
subchapter A.
``(F) Other rules.--
``(i) Election.--Any election under this paragraph
(including any allocation under subparagraph (D)) may be
revoked only with the consent of the Secretary.
``(ii) Deduction allowed in computing minimum tax.--
Notwithstanding this paragraph, paragraph (2)(G) shall apply
with respect to the deduction computed under this section
(after application of this paragraph) with respect to
property placed in service during any applicable taxable
year.''.
(b) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2007, in taxable years ending after such date.
SEC. 606. USE OF AMENDED INCOME TAX RETURNS TO TAKE INTO
ACCOUNT RECEIPT OF CERTAIN HURRICANE-RELATED
CASUALTY LOSS GRANTS BY DISALLOWING PREVIOUSLY
TAKEN CASUALTY LOSS DEDUCTIONS.
(a) In General.--Notwithstanding any other provision of the
Internal Revenue Code of 1986, if a taxpayer claims a
deduction for any taxable year with respect to a casualty
loss to a personal residence (within the meaning of section
121 of such Code) resulting from Hurricane Katrina, Hurricane
Rita, or Hurricane Wilma and in a subsequent taxable year
receives a grant under Public Law 109-148, 109-234, or 110-
116 as reimbursement for such loss, such taxpayer may elect
to file an amended income tax return for the taxable year in
which such deduction was allowed and disallow such deduction.
If elected, such amended return must be filed not later than
the due date for filing the tax return for the taxable year
in which the taxpayer receives such reimbursement or the date
that is 4 months after the date of the enactment of this Act,
whichever is later. Any increase in Federal income tax
resulting from such disallowance if such amended return is
filed--
(1) shall be subject to interest on the underpaid tax for
one year at the underpayment rate determined under section
6621(a)(2) of such Code; and
(2) shall not be subject to any penalty under such Code.
(b) Emergency Designation.--For purposes of Senate
enforcement, all provisions of this section are designated as
emergency requirements and necessary to meet emergency needs
pursuant to section 204 of S. Con. Res. 21 (110th Congress),
the concurrent resolution on the budget for fiscal year 2008.
SEC. 607. WAIVER OF DEADLINE ON CONSTRUCTION OF GO ZONE
PROPERTY ELIGIBLE FOR BONUS DEPRECIATION.
(a) In General.--Subparagraph (B) of section 1400N(d)(3) of
the Internal Revenue Code of 1986 is amended to read as
follows:
``(B) without regard to `and before January 1, 2009' in
clause (i) thereof,''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2007.
(c) Emergency Designation.--For purposes of Senate
enforcement, all provisions of this section are designated as
emergency requirements and necessary to meet emergency needs
pursuant to section 204 of S. Con. Res. 21 (110th Congress),
the concurrent resolution on the budget for fiscal year 2008.
SEC. 608. TEMPORARY TAX RELIEF FOR KIOWA COUNTY, KANSAS AND
SURROUNDING AREA.
(a) In General.--The following provisions of or relating to
the Internal Revenue Code of 1986 shall apply, in addition to
the areas described in such provisions, to an area with
respect to which a major disaster has been declared by the
President under section 401 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (FEMA-1699-DR,
as in effect on the date of the enactment of this Act) by
reason of severe storms and tornados beginning on May 4,
2007, and determined by the President to warrant individual
or individual and public assistance from the Federal
Government under such Act with respect to damages attributed
to such storms and tornados:
(1) Suspension of certain limitations on personal casualty
losses.--Section 1400S(b)(1) of the Internal Revenue Code of
1986, by substituting ``May 4, 2007'' for ``August 25,
2005''.
(2) Extension of replacement period for nonrecognition of
gain.--Section 405 of the Katrina Emergency Tax Relief Act of
2005, by substituting ``on or after May 4, 2007, by reason of
the May 4, 2007, storms and tornados'' for ``on or after
August 25, 2005, by reason of Hurricane Katrina''.
(3) Employee retention credit for employers affected by may
4 storms and tornados.--Section 1400R(a) of the Internal
Revenue Code of 1986--
(A) by substituting ``May 4, 2007'' for ``August 28, 2005''
each place it appears,
(B) by substituting ``January 1, 2008'' for ``January 1,
2006'' both places it appears, and
(C) only with respect to eligible employers who employed an
average of not more than 200 employees on business days
during the taxable year before May 4, 2007.
(4) Special allowance for certain property acquired on or
after may 5, 2007.--Section 1400N(d) of such Code--
(A) by substituting ``qualified Recovery Assistance
property'' for ``qualified Gulf Opportunity Zone property''
each place it appears,
(B) by substituting ``May 5, 2007'' for ``August 28, 2005''
each place it appears,
(C) by substituting ``December 31, 2008'' for ``December
31, 2007'' in paragraph (2)(A)(v),
(D) by substituting ``December 31, 2009'' for ``December
31, 2008'' in paragraph (2)(A)(v),
(E) by substituting ``May 4, 2007'' for ``August 27, 2005''
in paragraph (3)(A),
(F) by substituting ``January 1, 2009'' for ``January 1,
2008'' in paragraph (3)(B), and
(G) determined without regard to paragraph (6) thereof.
(5) Increase in expensing under section 179.--Section
1400N(e) of such Code, by substituting ``qualified section
179 Recovery Assistance property'' for ``qualified section
179 Gulf Opportunity Zone property'' each place it appears.
(6) Expensing for certain demolition and clean-up costs.--
Section 1400N(f) of such Code--
(A) by substituting ``qualified Recovery Assistance clean-
up cost'' for ``qualified Gulf Opportunity Zone clean-up
cost'' each place it appears, and
(B) by substituting ``beginning on May 4, 2007, and ending
on December 31, 2009'' for ``beginning on August 28, 2005,
and ending on December 31, 2007'' in paragraph (2) thereof.
(7) Treatment of public utility property disaster losses.--
Section 1400N(o) of such Code.
(8) Treatment of net operating losses attributable to storm
losses.--Section 1400N(k) of such Code--
(A) by substituting ``qualified Recovery Assistance loss''
for ``qualified Gulf Opportunity Zone loss'' each place it
appears,
(B) by substituting ``after May 3, 2007, and before on
January 1, 2010'' for ``after August 27, 2005, and before
January 1, 2008'' each place it appears,
(C) by substituting ``May 4, 2007'' for ``August 28, 2005''
in paragraph (2)(B)(ii)(I) thereof,
(D) by substituting ``qualified Recovery Assistance
property'' for ``qualified Gulf Opportunity Zone property''
in paragraph (2)(B)(iv) thereof, and
(E) by substituting ``qualified Recovery Assistance
casualty loss'' for ``qualified Gulf Opportunity Zone
casualty loss'' each place it appears.
(9) Treatment of representations regarding income
eligibility for purposes of qualified rental project
requirements.--Section 1400N(n) of such Code.
(10) Special rules for use of retirement funds.--Section
1400Q of such Code--
(A) by substituting ``qualified Recovery Assistance
distribution'' for ``qualified hurricane distribution'' each
place it appears,
(B) by substituting ``on or after May 4, 2007, and before
January 1, 2009'' for ``on or after August 25, 2005, and
before January 1, 2007'' in subsection (a)(4)(A)(i),
(C) by substituting ``qualified storm distribution'' for
``qualified Katrina distribution'' each place it appears,
(D) by substituting ``after November 4, 2006, and before
May 5, 2007'' for ``after February 28, 2005, and before
August 29, 2005'' in subsection (b)(2)(B)(ii),
(E) by substituting ``beginning on May 4, 2007, and ending
on November 5, 2007'' for ``beginning on August 25, 2005, and
ending on February 28, 2006'' in subsection (b)(3)(A),
(F) by substituting ``qualified storm individual'' for
``qualified Hurricane Katrina individual'' each place it
appears,
[[Page H3215]]
(G) by substituting ``December 31, 2007'' for ``December
31, 2006'' in subsection (c)(2)(A),
(H) by substituting ``beginning on June 4, 2007, and ending
on December 31, 2007'' for ``beginning on September 24, 2005,
and ending on December 31, 2006'' in subsection (c)(4)(A)(i),
(I) by substituting ``May 4, 2007'' for ``August 25, 2005''
in subsection (c)(4)(A)(ii), and
(J) by substituting ``January 1, 2008'' for ``January 1,
2007'' in subsection (d)(2)(A)(ii).
(b) Emergency Designation.--For purposes of Senate
enforcement, all provisions of this section are designated as
emergency requirements and necessary to meet emergency needs
pursuant to section 204 of S. Con. Res. 21 (110th Congress),
the concurrent resolution on the budget for fiscal year 2008.
TITLE VII--EMERGENCY DESIGNATION
SEC. 701. EMERGENCY DESIGNATION.
For purposes of Senate enforcement, all provisions of this
Act are designated as emergency requirements and necessary to
meet emergency needs pursuant to section 204 of S. Con. Res.
21 (110th Congress), the concurrent resolution on the budget
for fiscal year 2008.
TITLE VIII--REIT INVESTMENT DIVERSIFICATION AND EMPOWERMENT
SEC. 801. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) Short Title.--This title may be cited as the ``REIT
Investment Diversification and Empowerment Act of 2008''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this title an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
Subtitle A--Taxable REIT Subsidiaries
SEC. 811. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.
Section 856(c)(4)(B)(ii) is amended by striking ``20
percent'' and inserting ``25 percent''.
Subtitle B--Dealer Sales
SEC. 821. HOLDING PERIOD UNDER SAFE HARBOR.
Section 857(b)(6) (relating to income from prohibited
transactions) is amended--
(1) by striking ``4 years'' in subparagraphs (C)(i),
(C)(iv), and (D)(i) and inserting ``2 years'',
(2) by striking ``4-year period'' in subparagraphs (C)(ii),
(D)(ii), and (D)(iii) and inserting ``2-year period'', and
(3) by striking ``real estate asset''and all that follows
through ``if'' in the matter preceding clause (i) of
subparagraphs (C) and (D), respectively, and inserting ``real
estate asset (as defined in section 856(c)(5)(B)) and which
is described in section 1221(a)(1) if''.
SEC. 822. DETERMINING VALUE OF SALES UNDER SAFE HARBOR.
Section 857(b)(6) is amended--
(1) by striking the semicolon at the end of subparagraph
(C)(iii) and inserting ``, or (III) the fair market value of
property (other than sales of foreclosure property or sales
to which section 1033 applies) sold during the taxable year
does not exceed 10 percent of the fair market value of all of
the assets of the trust as of the beginning of the taxable
year;'', and
(2) by adding ``or'' at the end of subclause (II) of
subparagraph (D)(iv) and by adding at the end of such
subparagraph the following new subclause:
``(III) the fair market value of property (other than sales
of foreclosure property or sales to which section 1033
applies) sold during the taxable year does not exceed 10
percent of the fair market value of all of the assets of the
trust as of the beginning of the taxable year,''.
Subtitle C--Health Care REITs
SEC. 831. CONFORMITY FOR HEALTH CARE FACILITIES.
(a) Related Party Rentals.--Subparagraph (B) of section
856(d)(8) (relating to special rule for taxable REIT
subsidiaries) is amended to read as follows:
``(B) Exception for certain lodging facilities and health
care property.--The requirements of this subparagraph are met
with respect to an interest in real property which is a
qualified lodging facility (as defined in paragraph (9)(D))
or a qualified health care property (as defined in subsection
(e)(6)(D)(i)) leased by the trust to a taxable REIT
subsidiary of the trust if the property is operated on behalf
of such subsidiary by a person who is an eligible independent
contractor. For purposes of this section, a taxable REIT
subsidiary is not considered to be operating or managing a
qualified health care property or qualified lodging facility
solely because it--
``(i) directly or indirectly possesses a license, permit,
or similar instrument enabling it to do so, or
``(ii) employs individuals working at such property or
facility located outside the United States, but only if an
eligible independent contractor is responsible for the daily
supervision and direction of such individuals on behalf of
the taxable REIT subsidiary pursuant to a management
agreement or similar service contract.''.
(b) Eligible Independent Contractor.--Subparagraphs (A) and
(B) of section 856(d)(9) (relating to eligible independent
contractor) are amended to read as follows:
``(A) In general.--The term `eligible independent
contractor' means, with respect to any qualified lodging
facility or qualified health care property (as defined in
subsection (e)(6)(D)(i)), any independent contractor if, at
the time such contractor enters into a management agreement
or other similar service contract with the taxable REIT
subsidiary to operate such qualified lodging facility or
qualified health care property, such contractor (or any
related person) is actively engaged in the trade or business
of operating qualified lodging facilities or qualified health
care properties, respectively, for any person who is not a
related person with respect to the real estate investment
trust or the taxable REIT subsidiary.
``(B) Special rules.--Solely for purposes of this paragraph
and paragraph (8)(B), a person shall not fail to be treated
as an independent contractor with respect to any qualified
lodging facility or qualified health care property (as so
defined) by reason of the following:
``(i) The taxable REIT subsidiary bears the expenses for
the operation of such qualified lodging facility or qualified
health care property pursuant to the management agreement or
other similar service contract.
``(ii) The taxable REIT subsidiary receives the revenues
from the operation of such qualified lodging facility or
qualified health care property, net of expenses for such
operation and fees payable to the operator pursuant to such
agreement or contract.
``(iii) The real estate investment trust receives income
from such person with respect to another property that is
attributable to a lease of such other property to such person
that was in effect as of the later of--
``(I) January 1, 1999, or
``(II) the earliest date that any taxable REIT subsidiary
of such trust entered into a management agreement or other
similar service contract with such person with respect to
such qualified lodging facility or qualified health care
property.''.
(c) Taxable REIT Subsidiaries.--The last sentence of
section 856(l)(3) is amended--
(1) by inserting ``or a health care facility'' after ``a
lodging facility'', and
(2) by inserting ``or health care facility'' after ``such
lodging facility''.
Subtitle D--Effective Dates and Sunset
SEC. 841 EFFECTIVE DATES AND SUNSET.
(a) In General.--Except as otherwise provided in this
section, the amendments made by this title shall apply to
taxable years beginning after the date of the enactment of
this Act.
(b) REIT Income Tests.--
(1) The amendment made by section 801(a) and (b) shall
apply to gains and items of income recognized after the date
of the enactment of this Act.
(2) The amendment made by section 801(c) shall apply to
transactions entered into after the date of the enactment of
this Act.
(3) The amendment made by section 801(d) shall apply after
the date of the enactment of this Act.
(c) Conforming Foreign Currency Revisions.--
(1) The amendment made by section 803(a) shall apply to
gains recognized after the date of the enactment of this Act.
(2) The amendment made by section 803(b) shall apply to
gains and deductions recognized after the date of the
enactment of this Act.
(d) Dealer Sales.--The amendments made by subtitle C shall
apply to sales made after the date of the enactment of this
Act.
(e) Sunset.--All amendments made by this title shall not
apply to taxable years beginning after the date which is 5
years after the date of the enactment of this Act. The
Internal Revenue Code of 1986 shall be applied and
administered to taxable years described in the preceding
sentence as if the amendments so described had never been
enacted.
TITLE IX--VETERANS HOUSING MATTERS
SEC. 901. HOME IMPROVEMENTS AND STRUCTURAL ALTERATIONS FOR
TOTALLY DISABLED MEMBERS OF THE ARMED FORCES
BEFORE DISCHARGE OR RELEASE FROM THE ARMED
FORCES.
Section 1717 of title 38, United States Code, is amended by
adding at the end the following new subsection:
``(d)(1) In the case of a member of the Armed Forces who,
as determined by the Secretary, has a disability permanent in
nature incurred or aggravated in the line of duty in the
active military, naval, or air service, the Secretary may
furnish improvements and structural alterations for such
member for such disability or as otherwise described in
subsection (a)(2) while such member is hospitalized or
receiving outpatient medical care, services, or treatment for
such disability if the Secretary determines that such member
is likely to be discharged or released from the Armed Forces
for such disability.
``(2) The furnishing of improvements and alterations under
paragraph (1) in connection with the furnishing of medical
services described in subparagraph (A) or (B) of subsection
(a)(2) shall be subject to the limitation specified in the
applicable subparagraph.''.
SEC. 902. ELIGIBILITY FOR SPECIALLY ADAPTED HOUSING BENEFITS
AND ASSISTANCE FOR MEMBERS OF THE ARMED FORCES
WITH SERVICE-CONNECTED DISABILITIES AND
INDIVIDUALS RESIDING OUTSIDE THE UNITED STATES.
(a) Eligibility.--Chapter 21 of title 38, United States
Code, is amended by inserting after section 2101 the
following new section:
``Sec. 2101A. Eligibility for benefits and assistance:
members of the Armed Forces with service-connected
disabilities; individuals residing outside the United
States
``(a) Members With Service-Connected Disabilities.--(1) The
Secretary may provide assistance under this chapter to a
member of the Armed Forces serving on active duty who is
suffering from a disability that meets applicable criteria
for benefits under this chapter if the disability is incurred
or aggravated in line of duty in the active military, naval,
or air service. Such assistance shall be provided to the same
extent as assistance is provided under this chapter to
veterans eligible for assistance under this chapter and
subject to the same requirements as veterans under this
chapter.
``(2) For purposes of this chapter, any reference to a
veteran or eligible individual shall be treated as a
reference to a member of the Armed
[[Page H3216]]
Forces described in subsection (a) who is similarly situated
to the veteran or other eligible individual so referred to.
``(b) Benefits and Assistance for Individuals Residing
Outside the United States.--(1) Subject to paragraph (2), the
Secretary may, at the Secretary's discretion, provide
benefits and assistance under this chapter (other than
benefits under section 2106 of this title) to any individual
otherwise eligible for such benefits and assistance who
resides outside the United States.
``(2) The Secretary may provide benefits and assistance to
an individual under paragraph (1) only if--
``(A) the country or political subdivision in which the
housing or residence involved is or will be located permits
the individual to have or acquire a beneficial property
interest (as determined by the Secretary) in such housing or
residence; and
``(B) the individual has or will acquire a beneficial
property interest (as so determined) in such housing or
residence.
``(c) Regulations.--Benefits and assistance under this
chapter by reason of this section shall be provided in
accordance with such regulations as the Secretary may
prescribe.''.
(b) Conforming Amendments.--
(1) Repeal of superseded authority.--Section 2101 of such
title is amended--
(A) by striking subsection (c); and
(B) by redesignating subsection (d) as subsection (c).
(2) Limitations on assistance.--Section 2102 of such title
is amended--
(A) in subsection (a)--
(i) by striking ``veteran'' each place it appears and
inserting ``individual''; and
(ii) in paragraph (3), by striking ``veteran's'' and
inserting ``individual's'';
(B) in subsection (b)(1), by striking ``a veteran'' and
inserting ``an individual'';
(C) in subsection (c)--
(i) by striking ``a veteran'' and inserting ``an
individual''; and
(ii) by striking ``the veteran'' each place it appears and
inserting ``the individual''; and
(D) in subsection (d), by striking ``a veteran'' each place
it appears and inserting ``an individual''.
(3) Assistance for individuals temporarily residing in
housing of family member.--Section 2102A of such title is
amended--
(A) by striking ``veteran'' each place it appears (other
than in subsection (b)) and inserting ``individual'';
(B) in subsection (a), by striking ``veteran's'' each place
it appears and inserting ``individual's''; and
(C) in subsection (b), by striking ``a veteran'' each place
it appears and inserting ``an individual''.
(4) Furnishing of plans and specifications.--Section 2103
of such title is amended by striking ``veterans'' both places
it appears and inserting ``individuals''.
(5) Construction of benefits.--Section 2104 of such title
is amended--
(A) in subsection (a), by striking ``veteran'' each place
it appears and inserting ``individual''; and
(B) in subsection (b)--
(i) in the first sentence, by striking ``A veteran'' and
inserting ``An individual'';
(ii) in the second sentence, by striking ``a veteran'' and
inserting ``an individual''; and
(iii) by striking ``such veteran'' each place it appears
and inserting ``such individual''.
(6) Veterans' mortgage life insurance.--Section 2106 of
such title is amended--
(A) in subsection (a)--
(i) by striking ``any eligible veteran'' and inserting
``any eligible individual''; and
(ii) by striking ``the veterans' '' and inserting ``the
individual's'';
(B) in subsection (b), by striking ``an eligible veteran''
and inserting ``an eligible individual'';
(C) in subsection (e), by striking ``an eligible veteran''
and inserting ``an individual'';
(D) in subsection (h), by striking ``each veteran'' and
inserting ``each individual'';
(E) in subsection (i), by striking ``the veteran's'' each
place it appears and inserting ``the individual's'';
(F) by striking ``the veteran'' each place it appears and
inserting ``the individual''; and
(G) by striking ``a veteran'' each place it appears and
inserting ``an individual''.
(7) Heading amendments.--(A) The heading of section 2101 of
such title is amended to read as follows:
``Sec. 2101. Acquisition and adaptation of housing: eligible
veterans''.
(B) The heading of section 2102A of such title is amended
to read as follows:
``Sec. 2102A. Assistance for individuals residing temporarily
in housing owned by a family member''.
(8) Clerical amendments.--The table of sections at the
beginning of chapter 21 of such title is amended--
(A) by striking the item relating to section 2101 and
inserting the following new item:
``2101. Acquisition and adaptation of housing: eligible veterans.'';
(B) by inserting after the item relating to section 2101,
as so amended, the following new item:
``2101A. Eligibility for benefits and assistance: members of the Armed
Forces with service-connected disabilities; individuals
residing outside the United States.'';
and
(C) by striking the item relating to section 2102A and
inserting the following new item:
``2102A. Assistance for individuals residing temporarily in housing
owned by a family member.''.
SEC. 903. SPECIALLY ADAPTED HOUSING ASSISTANCE FOR
INDIVIDUALS WITH SEVERE BURN INJURIES.
Section 2101 of title 38, United States Code, is amended--
(1) in subsection (a)(2), by adding at the end the
following new subparagraph:
``(E) The disability is due to a severe burn injury (as
determined pursuant to regulations prescribed by the
Secretary).''; and
(2) in subsection (b)(2)--
(A) by striking ``either'' and inserting ``any''; and
(B) by adding at the end the following new subparagraph:
``(C) The disability is due to a severe burn injury (as so
determined).''.
SEC. 904. EXTENSION OF ASSISTANCE FOR INDIVIDUALS RESIDING
TEMPORARILY IN HOUSING OWNED BY A FAMILY
MEMBER.
Section 2102A(e) of title 38, United States Code, is
amended by striking ``after the end of the five-year period
that begins on the date of the enactment of the Veterans'
Housing Opportunity and Benefits Improvement Act of 2006''
and inserting ``after December 31, 2011''.
SEC. 905. INCREASE IN SPECIALLY ADAPTED HOUSING BENEFITS FOR
DISABLED VETERANS.
(a) In General.--Section 2102 of title 38, United States
Code, is amended--
(1) in subsection (b)(2), by striking ``$10,000'' and
inserting ``$12,000'';
(2) in subsection (d)--
(A) in paragraph (1), by striking ``$50,000'' and inserting
``$60,000''; and
(B) in paragraph (2), by striking ``$10,000'' and inserting
``$12,000''; and
(3) by adding at the end the following new subsection:
``(e)(1) Effective on October 1 of each year (beginning in
2009), the Secretary shall increase the amounts described in
subsection (b)(2) and paragraphs (1) and (2) of subsection
(d) in accordance with this subsection.
``(2) The increase in amounts under paragraph (1) to take
effect on October 1 of a year shall be by an amount of such
amounts equal to the percentage by which--
``(A) the residential home cost-of-construction index for
the preceding calendar year, exceeds
``(B) the residential home cost-of-construction index for
the year preceding the year described in subparagraph (A).
``(3) The Secretary shall establish a residential home
cost-of-construction index for the purposes of this
subsection. The index shall reflect a uniform, national
average change in the cost of residential home construction,
determined on a calendar year basis. The Secretary may use an
index developed in the private sector that the Secretary
determines is appropriate for purposes of this subsection.''.
(b) Effective Date.--The amendments made by this section
shall take effect on July 1, 2008, and shall apply with
respect to payments made in accordance with section 2102 of
title 38, United States Code, on or after that date.
SEC. 906. REPORT ON SPECIALLY ADAPTED HOUSING FOR DISABLED
INDIVIDUALS.
(a) In General.--Not later than December 31, 2008, the
Secretary of Veterans Affairs shall submit to the Committee
on Veterans' Affairs of the Senate and the Committee on
Veterans' Affairs of the House of Representatives a report
that contains an assessment of the adequacy of the
authorities available to the Secretary under law to assist
eligible disabled individuals in acquiring--
(1) suitable housing units with special fixtures or movable
facilities required for their disabilities, and necessary
land therefor;
(2) such adaptations to their residences as are reasonably
necessary because of their disabilities; and
(3) residences already adapted with special features
determined by the Secretary to be reasonably necessary as a
result of their disabilities.
(b) Focus on Particular Disabilities.--The report required
by subsection (a) shall set forth a specific assessment of
the needs of--
(1) veterans who have disabilities that are not described
in subsections (a)(2) and (b)(2) of section 2101 of title 38,
United States Code; and
(2) other disabled individuals eligible for specially
adapted housing under chapter 21 of such title by reason of
section 2101A of such title (as added by section 902(a) of
this Act) who have disabilities that are not described in
such subsections.
SEC. 907. REPORT ON SPECIALLY ADAPTED HOUSING ASSISTANCE FOR
INDIVIDUALS WHO RESIDE IN HOUSING OWNED BY A
FAMILY MEMBER ON PERMANENT BASIS.
Not later than December 31, 2008, the Secretary of Veterans
Affairs shall submit to the Committee on Veterans' Affairs of
the Senate and the Committee on Veterans' Affairs of the
House of Representatives a report on the advisability of
providing assistance under section 2102A of title 38, United
States Code, to veterans described in subsection (a) of such
section, and to members of the Armed Forces covered by such
section 2102A by reason of section 2101A of title 38, United
States Code (as added by section 902(a) of this Act), who
reside with family members on a permanent basis.
SEC. 908. DEFINITION OF ANNUAL INCOME FOR PURPOSES OF SECTION
8 AND OTHER PUBLIC HOUSING PROGRAMS.
Section 3(b)(4) of the United States Housing Act of 1937
(42 U.S.C. 1437a(3)(b)(4)) is amended by inserting ``or any
deferred Department of Veterans Affairs disability benefits
that are received in a lump sum amount or in prospective
monthly amounts'' before ``may not be considered''.
[[Page H3217]]
SEC. 909. PAYMENT OF TRANSPORTATION OF BAGGAGE AND HOUSEHOLD
EFFECTS FOR MEMBERS OF THE ARMED FORCES WHO
RELOCATE DUE TO FORECLOSURE OF LEASED HOUSING.
Section 406 of title 37, United States Code, is amended--
(1) by redesignating subsections (k) and (l) as subsections
(l) and (m), respectively; and
(2) by inserting after subsection (j) the following new
subsection (k):
``(k) A member of the armed forces who relocates from
leased or rental housing by reason of the foreclosure of such
housing is entitled to transportation of baggage and
household effects under subsection (b)(1) in the same manner,
and subject to the same conditions and limitations, as
similarly circumstanced members entitled to transportation of
baggage and household effects under that subsection.''.
TITLE X--CLEAN ENERGY TAX STIMULUS
SEC. 1001. SHORT TITLE; ETC.
(a) Short Title.--This title may be cited as the ``Clean
Energy Tax Stimulus Act of 2008''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this title an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
Subtitle A--Extension of Clean Energy Production Incentives
SEC. 1011. EXTENSION AND MODIFICATION OF RENEWABLE ENERGY
PRODUCTION TAX CREDIT.
(a) Extension of Credit.--Each of the following provisions
of section 45(d) (relating to qualified facilities) is
amended by striking ``January 1, 2009'' and inserting
``January 1, 2010'':
(1) Paragraph (1).
(2) Clauses (i) and (ii) of paragraph (2)(A).
(3) Clauses (i)(I) and (ii) of paragraph (3)(A).
(4) Paragraph (4).
(5) Paragraph (5).
(6) Paragraph (6).
(7) Paragraph (7).
(8) Paragraph (8).
(9) Subparagraphs (A) and (B) of paragraph (9).
(b) Production Credit for Electricity Produced From Marine
Renewables.--
(1) In general.--Paragraph (1) of section 45(c) (relating
to resources) is amended by striking ``and'' at the end of
subparagraph (G), by striking the period at the end of
subparagraph (H) and inserting ``, and'', and by adding at
the end the following new subparagraph:
``(I) marine and hydrokinetic renewable energy.''.
(2) Marine renewables.--Subsection (c) of section 45 is
amended by adding at the end the following new paragraph:
``(10) Marine and hydrokinetic renewable energy.--
``(A) In general.--The term `marine and hydrokinetic
renewable energy' means energy derived from--
``(i) waves, tides, and currents in oceans, estuaries, and
tidal areas,
``(ii) free flowing water in rivers, lakes, and streams,
``(iii) free flowing water in an irrigation system, canal,
or other man-made channel, including projects that utilize
nonmechanical structures to accelerate the flow of water for
electric power production purposes, or
``(iv) differentials in ocean temperature (ocean thermal
energy conversion).
``(B) Exceptions.--Such term shall not include any energy
which is derived from any source which utilizes a dam,
diversionary structure (except as provided in subparagraph
(A)(iii)), or impoundment for electric power production
purposes.''.
(3) Definition of facility.--Subsection (d) of section 45
is amended by adding at the end the following new paragraph:
``(11) Marine and hydrokinetic renewable energy
facilities.--In the case of a facility producing electricity
from marine and hydrokinetic renewable energy, the term
`qualified facility' means any facility owned by the
taxpayer--
``(A) which has a nameplate capacity rating of at least 150
kilowatts, and
``(B) which is originally placed in service on or after the
date of the enactment of this paragraph and before January 1,
2010.''.
(4) Credit rate.--Subparagraph (A) of section 45(b)(4) is
amended by striking ``or (9)'' and inserting ``(9), or
(11)''.
(5) Coordination with small irrigation power.--Paragraph
(5) of section 45(d), as amended by subsection (a), is
amended by striking ``January 1, 2010'' and inserting ``the
date of the enactment of paragraph (11)''.
(c) Sales of Electricity to Regulated Public Utilities
Treated as Sales to Unrelated Persons.--Section 45(e)(4)
(relating to related persons) is amended by adding at the end
the following new sentence: ``A taxpayer shall be treated as
selling electricity to an unrelated person if such
electricity is sold to a regulated public utility (as defined
in section 7701(a)(33).''.
(d) Trash Facility Clarification.--Paragraph (7) of section
45(d) is amended--
(1) by striking ``facility which burns'' and inserting
``facility (other than a facility described in paragraph (6))
which uses'', and
(2) by striking ``combustion''.
(e) Effective Dates.--
(1) Extension.--The amendments made by subsection (a) shall
apply to property originally placed in service after December
31, 2008.
(2) Modifications.--The amendments made by subsections (b)
and (c) shall apply to electricity produced and sold after
the date of the enactment of this Act, in taxable years
ending after such date.
(3) Trash facility clarification.--The amendments made by
subsection (d) shall apply to electricity produced and sold
before, on, or after December 31, 2007.
SEC. 1012. EXTENSION AND MODIFICATION OF SOLAR ENERGY AND
FUEL CELL INVESTMENT TAX CREDIT.
(a) Extension of Credit.--
(1) Solar energy property.--Paragraphs (2)(A)(i)(II) and
(3)(A)(ii) of section 48(a) (relating to energy credit) are
each amended by striking ``January 1, 2009'' and inserting
``January 1, 2017''.
(2) Fuel cell property.--Subparagraph (E) of section
48(c)(1) (relating to qualified fuel cell property) is
amended by striking ``December 31, 2008'' and inserting
``December 31, 2017''.
(3) Qualified microturbine property.--Subparagraph (E) of
section 48(c)(2) (relating to qualified microturbine
property) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2017''.
(b) Allowance of Energy Credit Against Alternative Minimum
Tax.--Subparagraph (B) of section 38(c)(4) (relating to
specified credits) is amended by striking ``and'' at the end
of clause (iii), by striking the period at the end of clause
(iv) and inserting ``, and'', and by adding at the end the
following new clause:
``(v) the credit determined under section 46 to the extent
that such credit is attributable to the energy credit
determined under section 48.''.
(c) Repeal of Dollar Per Kilowatt Limitation for Fuel Cell
Property.--
(1) In general.--Section 48(c)(1) (relating to qualified
fuel cell), as amended by subsection (a)(2), is amended by
striking subparagraph (B) and by redesignating subparagraphs
(C), (D), and (E) as subparagraphs (B), (C), and (D),
respectively.
(2) Conforming amendment.--Section 48(a)(1) is amended by
striking ``paragraphs (1)(B) and (2)(B) of subsection (c)''
and inserting ``subsection (c)(2)(B)''.
(d) Public Electric Utility Property Taken Into Account.--
(1) In general.--Paragraph (3) of section 48(a) is amended
by striking the second sentence thereof.
(2) Conforming amendments.--
(A) Paragraph (1) of section 48(c), as amended by this
section, is amended by striking subparagraph (C) and
redesignating subparagraph (D) as subparagraph (C).
(B) Paragraph (2) of section 48(c), as amended by
subsection (a)(3), is amended by striking subparagraph (D)
and redesignating subparagraph (E) as subparagraph (D).
(e) Effective Dates.--
(1) Extension.--The amendments made by subsection (a) shall
take effect on the date of the enactment of this Act.
(2) Allowance against alternative minimum tax.--The
amendments made by subsection (b) shall apply to credits
determined under section 46 of the Internal Revenue Code of
1986 in taxable years beginning after the date of the
enactment of this Act and to carrybacks of such credits.
(3) Fuel cell property and public electric utility
property.--The amendments made by subsections (c) and (d)
shall apply to periods after the date of the enactment of
this Act, in taxable years ending after such date, under
rules similar to the rules of section 48(m) of the Internal
Revenue Code of 1986 (as in effect on the day before the date
of the enactment of the Revenue Reconciliation Act of 1990).
SEC. 1013. EXTENSION AND MODIFICATION OF RESIDENTIAL ENERGY
EFFICIENT PROPERTY CREDIT.
(a) Extension.--Section 25D(g) (relating to termination) is
amended by striking ``December 31, 2008'' and inserting
``December 31, 2009''.
(b) No Dollar Limitation for Credit for Solar Electric
Property.--
(1) In general.--Section 25D(b)(1) (relating to maximum
credit) is amended by striking subparagraph (A) and by
redesignating subparagraphs (B) and (C) as subparagraphs (A)
and (B), respectively.
(2) Conforming amendments.--Section 25D(e)(4) is amended--
(A) by striking clause (i) in subparagraph (A),
(B) by redesignating clauses (ii) and (iii) in subparagraph
(A) as clauses (i) and (ii), respectively, and
(C) by striking ``, (2),'' in subparagraph (C).
(c) Credit Allowed Against Alternative Minimum Tax.--
(1) In general.--Subsection (c) of section 25D is amended
to read as follows:
``(c) Limitation Based on Amount of Tax; Carryforward of
Unused Credit.--
``(1) Limitation based on amount of tax.--In the case of a
taxable year to which section 26(a)(2) does not apply, the
credit allowed under subsection (a) for the taxable year
shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this subpart
(other than this section) and section 27 for the taxable
year.
``(2) Carryforward of unused credit.--
``(A) Rule for years in which all personal credits allowed
against regular and alternative minimum tax.--In the case of
a taxable year to which section 26(a)(2) applies, if the
credit allowable under subsection (a) exceeds the limitation
imposed by section 26(a)(2) for such taxable year reduced by
the sum of the credits allowable under this subpart (other
than this section), such excess shall be carried to the
succeeding taxable year and added to the credit allowable
under subsection (a) for such succeeding taxable year.
``(B) Rule for other years.--In the case of a taxable year
to which section 26(a)(2) does not apply, if the credit
allowable under subsection (a) exceeds the limitation imposed
by paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and
[[Page H3218]]
added to the credit allowable under subsection (a) for such
succeeding taxable year.''.
(2) Conforming amendments.--
(A) Section 23(b)(4)(B) is amended by inserting ``and
section 25D'' after ``this section''.
(B) Section 24(b)(3)(B) is amended by striking ``and 25B''
and inserting ``, 25B, and 25D''.
(C) Section 25B(g)(2) is amended by striking ``section 23''
and inserting ``sections 23 and 25D''.
(D) Section 26(a)(1) is amended by striking ``and 25B'' and
inserting ``25B, and 25D''.
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2007.
(2) Application of egtrra sunset.--The amendments made by
subparagraphs (A) and (B) of subsection (c)(2) shall be
subject to title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 in the same manner as the
provisions of such Act to which such amendments relate.
SEC. 1014. EXTENSION AND MODIFICATION OF CREDIT FOR CLEAN
RENEWABLE ENERGY BONDS.
(a) Extension.--Section 54(m) (relating to termination) is
amended by striking ``December 31, 2008'' and inserting
``December 31, 2009''.
(b) Increase in National Limitation.--Section 54(f)
(relating to limitation on amount of bonds designated) is
amended--
(1) by inserting ``, and for the period beginning after the
date of the enactment of the Clean Energy Tax Stimulus Act of
2008 and ending before January 1, 2010, $400,000,000'' after
``$1,200,000,000'' in paragraph (1),
(2) by striking ``$750,000,000 of the'' in paragraph (2)
and inserting ``$750,000,000 of the $1,200,000,000'', and
(3) by striking ``bodies'' in paragraph (2) and inserting
``bodies, and except that the Secretary may not allocate more
than \1/3\ of the $400,000,000 national clean renewable
energy bond limitation to finance qualified projects of
qualified borrowers which are public power providers nor more
than \1/3\ of such limitation to finance qualified projects
of qualified borrowers which are mutual or cooperative
electric companies described in section 501(c)(12) or section
1381(a)(2)(C)''.
(c) Public Power Providers Defined.--Section 54(j) is
amended--
(1) by adding at the end the following new paragraph:
``(6) Public power provider.--The term `public power
provider' means a State utility with a service obligation, as
such terms are defined in section 217 of the Federal Power
Act (as in effect on the date of the enactment of this
paragraph).'', and
(2) by inserting ``; Public Power Provider'' before the
period at the end of the heading.
(d) Technical Amendment.--The third sentence of section
54(e)(2) is amended by striking ``subsection (l)(6)'' and
inserting ``subsection (l)(5)''.
(e) Effective Date.--The amendments made by this section
shall apply to bonds issued after the date of the enactment
of this Act.
SEC. 1015. EXTENSION OF SPECIAL RULE TO IMPLEMENT FERC
RESTRUCTURING POLICY.
(a) Qualifying Electric Transmission Transaction.--
(1) In general.--Section 451(i)(3) (defining qualifying
electric transmission transaction) is amended by striking
``January 1, 2008'' and inserting ``January 1, 2010''.
(2) Effective date.--The amendment made by this subsection
shall apply to transactions after December 31, 2007.
(b) Independent Transmission Company.--
(1) In general.--Section 451(i)(4)(B)(ii) (defining
independent transmission company) is amended by striking
``December 31, 2007'' and inserting ``the date which is 2
years after the date of such transaction''.
(2) Effective date.--The amendment made by this subsection
shall take effect as if included in the amendments made by
section 909 of the American Jobs Creation Act of 2004.
Subtitle B--Extension of Incentives to Improve Energy Efficiency
SEC. 1021. EXTENSION AND MODIFICATION OF CREDIT FOR ENERGY
EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.
(a) Extension of Credit.--Section 25C(g) (relating to
termination) is amended by striking ``December 31, 2007'' and
inserting ``December 31, 2009''.
(b) Qualified Biomass Fuel Property.--
(1) In general.--Section 25C(d)(3) is amended--
(A) by striking ``and'' at the end of subparagraph (D),
(B) by striking the period at the end of subparagraph (E)
and inserting ``, and'', and
(C) by adding at the end the following new subparagraph:
``(F) a stove which uses the burning of biomass fuel to
heat a dwelling unit located in the United States and used as
a residence by the taxpayer, or to heat water for use in such
a dwelling unit, and which has a thermal efficiency rating of
at least 75 percent.''.
(2) Biomass fuel.--Section 25C(d) (relating to residential
energy property expenditures) is amended by adding at the end
the following new paragraph:
``(6) Biomass fuel.--The term `biomass fuel' means any
plant-derived fuel available on a renewable or recurring
basis, including agricultural crops and trees, wood and wood
waste and residues (including wood pellets), plants
(including aquatic plants), grasses, residues, and fibers.''.
(c) Modifications of Standards for Energy-Efficient
Building Property.--
(1) Electric heat pumps.--Subparagraph (B) of section
25C(d)(3) is amended to read as follows:
``(A) an electric heat pump which achieves the highest
efficiency tier established by the Consortium for Energy
Efficiency, as in effect on January 1, 2008.''.
(2) Central air conditioners.--Section 25C(d)(3)(D) is
amended by striking ``2006'' and inserting ``2008''.
(3) Water heaters.--Subparagraph (E) of section 25C(d) is
amended to read as follows:
``(E) a natural gas, propane, or oil water heater which has
either an energy factor of at least 0.80 or a thermal
efficiency of at least 90 percent.''.
(4) Oil furnaces and hot water boilers.--Paragraph (4) of
section 25C(d) is amended to read as follows:
``(4) Qualified natural gas, propane, and oil furnaces and
hot water boilers.--
``(A) Qualified natural gas furnace.--The term `qualified
natural gas furnace' means any natural gas furnace which
achieves an annual fuel utilization efficiency rate of not
less than 95.
``(B) Qualified natural gas hot water boiler.--The term
`qualified natural gas hot water boiler' means any natural
gas hot water boiler which achieves an annual fuel
utilization efficiency rate of not less than 90.
``(C) Qualified propane furnace.--The term `qualified
propane furnace' means any propane furnace which achieves an
annual fuel utilization efficiency rate of not less than 95.
``(D) Qualified propane hot water boiler.--The term
`qualified propane hot water boiler' means any propane hot
water boiler which achieves an annual fuel utilization
efficiency rate of not less than 90.
``(E) Qualified oil furnaces.--The term `qualified oil
furnace' means any oil furnace which achieves an annual fuel
utilization efficiency rate of not less than 90.
``(F) Qualified oil hot water boiler.--The term `qualified
oil hot water boiler' means any oil hot water boiler which
achieves an annual fuel utilization efficiency rate of not
less than 90.''.
(d) Effective Date.--The amendments made this section shall
apply to expenditures made after December 31, 2007.
SEC. 1022. EXTENSION AND MODIFICATION OF TAX CREDIT FOR
ENERGY EFFICIENT NEW HOMES.
(a) Extension of Credit.--Subsection (g) of section 45L
(relating to termination) is amended by striking ``December
31, 2008'' and inserting ``December 31, 2010''.
(b) Allowance for Contractor's Personal Residence.--
Subparagraph (B) of section 45L(a)(1) is amended to read as
follows:
``(B)(i) acquired by a person from such eligible contractor
and used by any person as a residence during the taxable
year, or
``(ii) used by such eligible contractor as a residence
during the taxable year.''.
(c) Effective Date.--The amendments made by this section
shall apply to homes acquired after December 31, 2008.
SEC. 1023. EXTENSION AND MODIFICATION OF ENERGY EFFICIENT
COMMERCIAL BUILDINGS DEDUCTION.
(a) Extension.--Section 179D(h) (relating to termination)
is amended by striking ``December 31, 2008'' and inserting
``December 31, 2009''.
(b) Adjustment of Maximum Deduction Amount.--
(1) In general.--Subparagraph (A) of section 179D(b)(1)
(relating to maximum amount of deduction) is amended by
striking ``$1.80'' and inserting ``$2.25''.
(2) Partial allowance.--Paragraph (1) of section 179D(d) is
amended--
(A) by striking ``$.60'' and inserting ``$0.75'', and
(B) by striking ``$1.80'' and inserting ``$2.25''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act.
SEC. 1024. MODIFICATION AND EXTENSION OF ENERGY EFFICIENT
APPLIANCE CREDIT FOR APPLIANCES PRODUCED AFTER
2007.
(a) In General.--Subsection (b) of section 45M (relating to
applicable amount) is amended to read as follows:
``(b) Applicable Amount.--For purposes of subsection (a)--
``(1) Dishwashers.--The applicable amount is--
``(A) $45 in the case of a dishwasher which is manufactured
in calendar year 2008 or 2009 and which uses no more than 324
kilowatt hours per year and 5.8 gallons per cycle, and
``(B) $75 in the case of a dishwasher which is manufactured
in calendar year 2008, 2009, or 2010 and which uses no more
than 307 kilowatt hours per year and 5.0 gallons per cycle
(5.5 gallons per cycle for dishwashers designed for greater
than 12 place settings).
``(2) Clothes washers.--The applicable amount is--
``(A) $75 in the case of a residential top-loading clothes
washer manufactured in calendar year 2008 which meets or
exceeds a 1.72 modified energy factor and does not exceed a
8.0 water consumption factor,
``(B) $125 in the case of a residential top-loading clothes
washer manufactured in calendar year 2008 or 2009 which meets
or exceeds a 1.8 modified energy factor and does not exceed a
7.5 water consumption factor,
``(C) $150 in the case of a residential or commercial
clothes washer manufactured in calendar year 2008, 2009, or
2010 which meets or exceeds 2.0 modified energy factor and
does not exceed a 6.0 water consumption factor, and
``(D) $250 in the case of a residential or commercial
clothes washer manufactured in calendar year 2008, 2009, or
2010 which meets or exceeds 2.2 modified energy factor and
does not exceed a 4.5 water consumption factor.
[[Page H3219]]
``(3) Refrigerators.--The applicable amount is--
``(A) $50 in the case of a refrigerator which is
manufactured in calendar year 2008, and consumes at least 20
percent but not more than 22.9 percent less kilowatt hours
per year than the 2001 energy conservation standards,
``(B) $75 in the case of a refrigerator which is
manufactured in calendar year 2008 or 2009, and consumes at
least 23 percent but no more than 24.9 percent less kilowatt
hours per year than the 2001 energy conservation standards,
``(C) $100 in the case of a refrigerator which is
manufactured in calendar year 2008, 2009, or 2010, and
consumes at least 25 percent but not more than 29.9 percent
less kilowatt hours per year than the 2001 energy
conservation standards, and
``(D) $200 in the case of a refrigerator manufactured in
calendar year 2008, 2009, or 2010 and which consumes at least
30 percent less energy than the 2001 energy conservation
standards.''.
(b) Eligible Production.--
(1) Similar treatment for all appliances.--Subsection (c)
of section 45M (relating to eligible production) is amended--
(A) by striking paragraph (2),
(B) by striking ``(1) In general'' and all that follows
through ``the eligible'' and inserting ``The eligible'', and
(C) by moving the text of such subsection in line with the
subsection heading and redesignating subparagraphs (A) and
(B) as paragraphs (1) and (2), respectively.
(2) Modification of base period.--Paragraph (2) of section
45M(c), as amended by paragraph (1) of this section, is
amended by striking ``3-calendar year'' and inserting ``2-
calendar year''.
(c) Types of Energy Efficient Appliances.--Subsection (d)
of section 45M (defining types of energy efficient
appliances) is amended to read as follows:
``(d) Types of Energy Efficient Appliance.--For purposes of
this section, the types of energy efficient appliances are--
``(1) dishwashers described in subsection (b)(1),
``(2) clothes washers described in subsection (b)(2), and
``(3) refrigerators described in subsection (b)(3).''.
(d) Aggregate Credit Amount Allowed.--
(1) Increase in limit.--Paragraph (1) of section 45M(e)
(relating to aggregate credit amount allowed) is amended to
read as follows:
``(1) Aggregate credit amount allowed.--The aggregate
amount of credit allowed under subsection (a) with respect to
a taxpayer for any taxable year shall not exceed $75,000,000
reduced by the amount of the credit allowed under subsection
(a) to the taxpayer (or any predecessor) for all prior
taxable years beginning after December 31, 2007.''.
(2) Exception for certain refrigerator and clothes
washers.--Paragraph (2) of section 45M(e) is amended to read
as follows:
``(2) Amount allowed for certain refrigerators and clothes
washers.--Refrigerators described in subsection (b)(3)(D) and
clothes washers described in subsection (b)(2)(D) shall not
be taken into account under paragraph (1).''.
(e) Qualified Energy Efficient Appliances.--
(1) In general.--Paragraph (1) of section 45M(f) (defining
qualified energy efficient appliance) is amended to read as
follows:
``(1) Qualified energy efficient appliance.--The term
`qualified energy efficient appliance' means--
``(A) any dishwasher described in subsection (b)(1),
``(B) any clothes washer described in subsection (b)(2),
and
``(C) any refrigerator described in subsection (b)(3).''.
(2) Clothes washer.--Section 45M(f)(3) (defining clothes
washer) is amended by inserting ``commercial'' before
``residential'' the second place it appears.
(3) Top-loading clothes washer.--Subsection (f) of section
45M (relating to definitions) is amended by redesignating
paragraphs (4), (5), (6), and (7) as paragraphs (5), (6),
(7), and (8), respectively, and by inserting after paragraph
(3) the following new paragraph:
``(4) Top-loading clothes washer.--The term `top-loading
clothes washer' means a clothes washer which has the clothes
container compartment access located on the top of the
machine and which operates on a vertical axis.''.
(4) Replacement of energy factor.--Section 45M(f)(6), as
redesignated by paragraph (3), is amended to read as follows:
``(6) Modified energy factor.--The term `modified energy
factor' means the modified energy factor established by the
Department of Energy for compliance with the Federal energy
conservation standard.''.
(5) Gallons per cycle; water consumption factor.--Section
45M(f) (relating to definitions), as amended by paragraph
(3), is amended by adding at the end the following:
``(9) Gallons per cycle.--The term `gallons per cycle'
means, with respect to a dishwasher, the amount of water,
expressed in gallons, required to complete a normal cycle of
a dishwasher.
``(10) Water consumption factor.--The term `water
consumption factor' means, with respect to a clothes washer,
the quotient of the total weighted per-cycle water
consumption divided by the cubic foot (or liter) capacity of
the clothes washer.''.
(f) Effective Date.--The amendments made by this section
shall apply to appliances produced after December 31, 2007.
TITLE XI--SENSE OF THE SENATE
SEC. 1101. SENSE OF THE SENATE.
It is the sense of the Senate that in implementing or
carrying out any provision of this Act, or any amendment made
by this Act, the Senate supports a policy of noninterference
regarding local government requirements that the holder of a
foreclosed property maintain that property.
Amend the title so as to read: ``An Act to provide needed
housing reform and for other purposes.''.
Motion Offered by Mr. Frank of Massachusetts
Mr. FRANK of Massachusetts. Mr. Speaker, I have a motion at the desk.
The SPEAKER pro tempore. The Clerk will designate the motion.
The text of the motion is as follows:
Motion offered by Mr. Frank of Massachusetts:
Mr. Frank of Massachusetts moves that the House concur in
the Senate amendments to the text of H.R. 3221 with each of
the three amendments printed in the report of the Committee
on Rules accompanying House Resolution 1175.
The text of House amendment No. 1 to the Senate amendments is as
follows:
In the matter proposed to be inserted by the amendment of
the Senate to the text of the bill, strike section 1 and all
that follows through the end of title V and insert the
following:
SEC. 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``American
Housing Rescue and Foreclosure Prevention Act of 2008''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title and table of contents.
TITLE I--FHA HOUSING STABILIZATION AND HOMEOWNERSHIP RETENTION
Sec. 101. Short title.
Subtitle A--Homeownership Retention
Sec. 111. Purposes.
Sec. 112. Insurance of homeownership retention mortgages.
Sec. 113. Study of Auction or Bulk Refinance Program.
Sec. 114. Temporary increase in maximum loan guaranty amount for
certain housing loans guaranteed by Secretary of Veterans
Affairs.
Sec. 115. Study of possible accounting revisions relating to property
at risk of foreclosure and the availability of credit for
refinancing home mortgages at risk of foreclosure.
Sec. 116. GAO study of the effect of tightening credit markets in
communities affected by the subprime mortgage foreclosure
crises and predatory lending on prospective first-time
homebuyers seeking mortgages.
Subtitle B--Office of Housing Counseling
Sec. 131. Short title.
Sec. 132. Establishment of Office of Housing Counseling.
Sec. 133. Counseling procedures.
Sec. 134. Grants for housing counseling assistance.
Sec. 135. Requirements to use HUD-certified counselors under HUD
programs.
Sec. 136. Study of defaults and foreclosures.
Sec. 137. Definitions for counseling-related programs.
Sec. 138. Updating and simplification of mortgage information booklet.
Subtitle C--Combating Mortgage Fraud
Sec. 151. Authorization of appropriations to combat mortgage fraud.
TITLE II--FHA REFORM AND MANUFACTURED HOUSING LOAN INSURANCE
MODERNIZATION
Subtitle A--FHA Reform
Sec. 201. Short title.
Sec. 202. Findings and purposes.
Sec. 203. Maximum principal loan obligation.
Sec. 204. Extension of mortgage term.
Sec. 205. Downpayment simplification.
Sec. 206. Mortgage insurance premiums for qualified homeownership
assistance entities and higher-risk borrowers.
Sec. 207. Risk-based mortgage insurance premiums.
Sec. 208. Payment incentives for higher-risk borrowers.
Sec. 209. Protections for higher-risk borrowers.
Sec. 210. Refinancing mortgages.
Sec. 211. Annual reports on new programs and loss mitigation.
Sec. 212. Insurance for single family homes with licensed child care
facilities.
Sec. 213. Rehabilitation loans.
Sec. 214. Discretionary action.
Sec. 215. Insurance of condominiums and manufactured housing.
Sec. 216. Mutual Mortgage Insurance Fund.
Sec. 217. Hawaiian home lands and Indian reservations.
Sec. 218. Conforming and technical amendments.
Sec. 219. Home equity conversion mortgages.
Sec. 220. Study on participation of mortgage brokers and correspondent
lenders.
Sec. 221. Conforming loan limit in disaster areas.
Sec. 222. Failure to pay amounts from escrow accounts for single family
mortgages.
[[Page H3220]]
Sec. 223. Acceptable identification for FHA mortgagors.
Sec. 224. Pilot program for automated process for borrowers without
sufficient credit history.
Sec. 225. Sense of Congress regarding technology for financial systems.
Sec. 226. Clarification of disposition of certain properties.
Sec. 227. Valuation of multifamily properties in noncompetitive sales
by HUD to states and localities.
Sec. 228. Limitation on mortgage insurance premium increases.
Sec. 229. Civil money penalties for improperly influencing appraisals.
Sec. 230. Mortgage insurance premium refunds.
Sec. 231. Savings provision.
Sec. 232. Implementation.
Subtitle B--FHA Manufactured Housing Loan Insurance Modernization
Sec. 251. Short title.
Sec. 252. Findings and purposes.
Sec. 253. Exception to limitation on financial institution portfolio.
Sec. 254. Insurance benefits.
Sec. 255. Maximum loan limits.
Sec. 256. Insurance premiums.
Sec. 257. Technical corrections.
Sec. 258. Revision of underwriting criteria.
Sec. 259. Requirement of social security account number for assistance.
Sec. 260. GAO study of mitigation of tornado risks to manufactured
homes.
TITLE III--REFORM OF GOVERNMENT-SPONSORED ENTITIES FOR HOUSING FINANCE
Sec. 301. Short title.
Sec. 302. Definitions.
Subtitle A--Reform of Regulation of Enterprises and Federal Home Loan
Banks
Chapter 1--Improvement of Safety and Soundness
Sec. 311. Establishment of the Federal Housing Finance Agency.
Sec. 312. Duties and authorities of Director.
Sec. 313. Federal Housing Enterprise Board.
Sec. 314. Authority to require reports by regulated entities.
Sec. 315. Disclosure of income and charitable contributions by
enterprises.
Sec. 316. Assessments.
Sec. 317. Examiners and accountants.
Sec. 318. Prohibition and withholding of executive compensation.
Sec. 319. Reviews of regulated entities.
Sec. 320. Inclusion of minorities and women; diversity in Agency
workforce.
Sec. 321. Regulations and orders.
Sec. 322. Non-waiver of privileges.
Sec. 323. Risk-based capital requirements.
Sec. 324. Minimum and critical capital levels.
Sec. 325. Review of and authority over enterprise assets and
liabilities.
Sec. 326. Corporate governance of enterprises.
Sec. 327. Required registration under Securities Exchange Act of 1934.
Sec. 328. Liaison with Financial Institutions Examination Council.
Sec. 329. Guarantee fee study.
Sec. 330. Conforming amendments.
Chapter 2--Improvement of Mission Supervision
Sec. 331. Transfer of product approval and housing goal oversight.
Sec. 332. Review of enterprise products.
Sec. 333. Conforming loan limits.
Sec. 334. Annual housing report regarding regulated entities.
Sec. 335. Annual reports by regulated entities on affordable housing
stock.
Sec. 336. Mortgagor identification requirements for mortgages of
regulated entities.
Sec. 337. Revision of housing goals.
Sec. 338. Duty to serve underserved markets.
Sec. 339. Monitoring and enforcing compliance with housing goals.
Sec. 340. Affordable Housing Fund.
Sec. 341. Consistency with mission.
Sec. 342. Enforcement.
Sec. 343. Conforming amendments.
Chapter 3--Prompt Corrective Action
Sec. 345. Capital classifications.
Sec. 346. Supervisory actions applicable to undercapitalized regulated
entities.
Sec. 347. Supervisory actions applicable to significantly
undercapitalized regulated entities.
Sec. 348. Authority over critically undercapitalized regulated
entities.
Sec. 349. Conforming amendments.
Chapter 4--Enforcement Actions
Sec. 351. Cease-and-desist proceedings.
Sec. 352. Temporary cease-and-desist proceedings.
Sec. 353. Prejudgment attachment.
Sec. 354. Enforcement and jurisdiction.
Sec. 355. Civil money penalties.
Sec. 356. Removal and prohibition authority.
Sec. 357. Criminal penalty.
Sec. 358. Subpoena authority.
Sec. 359. Conforming amendments.
Chapter 5--General Provisions
Sec. 361. Boards of enterprises.
Sec. 362. Report on portfolio operations, safety and soundness, and
mission of enterprises.
Sec. 363. Conforming and technical amendments.
Sec. 364. Study of alternative secondary market systems.
Sec. 365. Effective date.
Subtitle B--Federal Home Loan Banks
Sec. 371. Definitions.
Sec. 372. Directors.
Sec. 373. Federal Housing Finance Agency oversight of Federal Home Loan
Banks.
Sec. 374. Joint activities of Banks.
Sec. 375. Sharing of information between Federal Home Loan Banks.
Sec. 376. Reorganization of Banks and voluntary merger.
Sec. 377. Securities and Exchange Commission disclosure.
Sec. 378. Community financial institution members.
Sec. 379. Technical and conforming amendments.
Sec. 380. Study of affordable housing program use for long-term care
facilities.
Sec. 381. Effective date.
Subtitle C--Transfer of Functions, Personnel, and Property of Office of
Federal Housing Enterprise Oversight, Federal Housing Finance Board,
and Department of Housing and Urban Development
Chapter 1--Office of Federal Housing Enterprise Oversight
Sec. 385. Abolishment of OFHEO.
Sec. 386. Continuation and coordination of certain regulations.
Sec. 387. Transfer and rights of employees of OFHEO.
Sec. 388. Transfer of property and facilities.
Chapter 2--Federal Housing Finance Board
Sec. 391. Abolishment of the Federal Housing Finance Board.
Sec. 392. Continuation and coordination of certain regulations.
Sec. 393. Transfer and rights of employees of the Federal Housing
Finance Board.
Sec. 394. Transfer of property and facilities.
Chapter 3--Department of Housing and Urban Development
Sec. 395. Termination of enterprise-related functions.
Sec. 396. Continuation and coordination of certain regulations.
Sec. 397. Transfer and rights of employees of Department of Housing and
Urban Development.
Sec. 398. Transfer of appropriations, property, and facilities.
TITLE IV--EMERGENCY MORTGAGE LOAN MODIFICATION
Sec. 401. Short title.
Sec. 402. Safe harbor for qualified loan modifications or workout plans
for certain residential mortgage loans.
TITLE V--OTHER HOUSING PROVISIONS
Sec. 501. Depository Institution Community Development Investments
Enhancement .
Sec. 502. Preservation of certain affordable housing dwelling units.
Sec. 503. Eligibility of certain projects for enhanced voucher
assistance.
Sec. 504. Transfer of certain rental assistance contracts.
Sec. 505. Protection against discriminatory treatment.
TITLE I--FHA HOUSING STABILIZATION AND HOMEOWNERSHIP RETENTION
SEC. 101. SHORT TITLE.
This title may be cited as the ``FHA Housing Stabilization
and Homeownership Retention Act of 2008''.
Subtitle A--Homeownership Retention
SEC. 111. PURPOSES.
The purposes of this subtitle are--
(1) to create an FHA program, which is voluntary on the
part of borrowers and existing mortgage loan holders,
including both existing senior mortgage loan holders and
existing subordinate mortgage loan holders, to insure
refinance loans for substantial numbers of borrowers at risk
of foreclosure, at levels which are reasonably likely to be
sustainable through enhanced affordability of debt service;
(2) to provide flexible underwriting for FHA-insured loans
under such a program to provide refinancing opportunities
under fiscally responsible terms, including higher fees
commensurate with higher risk levels, a seasoning requirement
for higher debt to income loans, and additional program
controls to limit and control risk;
(3) to bar speculators and second home owners from
participation in such program;
(4) to require existing mortgage loan holders to take
substantial loan writedowns in exchange for having the
Federal Government and the borrower assume the ongoing risk
of the refinanced loan;
(5) to set a loan-to-value limit on such loans that
provides the FHA with an equity buffer against potential loan
losses, provides protections against the risk of future home
price declines, and creates incentives for borrowers to
maintain payments on the loan;
(6) to protect the FHA against losses which may exceed
normal FHA loss levels by establishing higher fee levels,
including an exit fee and profit sharing during the first
five years of the loan, with such higher fee levels
effectively being funded through the required lender
writedown;
(7) to provide a fair level of incentives for junior lien
holders to provide the necessary releases of their lien
interests, in order to meet program requirements that all
outstanding liens must be extinguished, and thereby permit
the refinancing to be completed;
(8) to enhance the administrative capacity of the FHA to
carry out its expanded role
[[Page H3221]]
under the program through establishment of an Oversight Board
which adds expertise from the Federal Reserve and the
Department of the Treasury, through additional funding to
contract out for the provision of any needed expertise in
designing program requirements and oversight, and through
additional funding to increase FHA personnel resources as
needed to handle the increased loan volume resulting from the
program;
(9) to sunset the program when it is no longer needed; and
(10) to study the need for and efficacy of an auction or
bulk refinancing mechanism to facilitate more expeditious
refinancing of larger volumes of existing mortgages that are
at risk for foreclosure into FHA-insured mortgages.
SEC. 112. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.
(a) Mortgage Insurance Program.--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. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.
``(a) Oversight Board.--
``(1) Establishment.--There is hereby established the
Refinance Program Oversight Board (in this section referred
to as the `Oversight Board').
``(2) Membership.--The Oversight Board shall consist of the
following members or their designees:
``(A) The Secretary of the Treasury.
``(B) The Secretary of Housing and Urban Development.
``(C) The Chairman of the Board of Governors of the Federal
Reserve System.
``(3) No additional compensation.--Members of the Oversight
Board shall receive no additional pay by reason of service on
the Oversight Board.
``(4) Responsibilities.--The Oversight Board shall be
responsible for establishing program and oversight
requirements for the program under this section, which shall
include--
``(A) detailed program requirements under subsection (c);
``(B) flexible underwriting criteria under subsection (d);
``(C) a mortgage premium structure under subsection (e);
``(D) a reasonable fee and rate limitation under subsection
(f);
``(E) enhancement of FHA capacity under subsection (i),
including oversight of such activities and personnel as may
be contracted for as provided therein;
``(F) monitoring of underwriting risk under subsection (j);
and
``(G) such additional requirements as may be necessary and
appropriate to oversee and implement the program.
``(5) Use of resources.--In carrying out its functions
under this section, the Oversight Board may utilize, with
their consent and to the extent practical, the personnel,
services, and facilities of the Department of the Treasury,
the Department of Housing and Urban Development, the Board of
Governors of the Federal Reserve System, the Federal Reserve
Banks, and other Federal agencies, with or without
reimbursement therefore.
``(b) Authority.--
``(1) In general.--The Secretary shall, subject only to the
absence of qualified requests for insurance under this
section and to the limitations under subsection (h) of this
section and section 531(a), make commitments to insure and
insure any mortgage covering a 1- to 4-family residence that
is made for the purpose of paying or prepaying outstanding
obligations under an existing mortgage or mortgages on the
residence if the mortgage being insured under this section
meets the requirements of this section, as established by the
Oversight Board, and of section 203, except as modified by
this section.
``(2) Establishment and implementation of program
requirements.--The Oversight Board shall establish program
requirements and standards under this section and the
Secretary shall implement such requirements and standards.
The Oversight Board and the Secretary may establish and
implement any requirements or standards through interim
guidance and mortgagee letters.
``(c) Requirements.--To be eligible for insurance under
this section, a mortgage shall comply with all of the
following requirements:
``(1) Owner-occupied principal residence requirement.--The
residence securing the mortgage insured under this section
shall be occupied by the mortgagor as the principal residence
of the mortgagor and the mortgagor shall provide a
certification to the originator of the mortgage that such
residence securing the mortgage insured under this section is
the only residence in which the mortgagor has any present
ownership interest. With regard to such certification, the
Oversight Board may create exceptions for mortgagors who have
only a partial ownership interest in a residence other than
the residence securing the mortgage insured under this
section.
``(2) Lack of capacity to pay existing mortgage or
mortgages.--
``(A) Borrower certification.--
``(i) The mortgagor shall provide a certification to the
originator of the mortgage that the mortgagor--
``(I) has not intentionally defaulted on the existing
mortgage or mortgages; and
``(II) has not knowingly, or willfully and with actual
knowledge furnished material information known to be false
for the purpose of obtaining the existing mortgage or
mortgages.
``(ii) The mortgagor shall agree in writing that the
mortgagor shall be liable to repay the FHA any direct
financial benefit achieved from the reduction of indebtedness
on the existing mortgage or mortgages on the residence
refinanced under this section derived from misrepresentations
made in the certifications and documentation required under
this subparagraph, subject to the discretion of the Oversight
Board.
``(B) Current borrower debt-to-income ratio.--As of March
1, 2008, the mortgagor shall have had a ratio of mortgage
debt to income, taking into consideration all existing
mortgages at such time, greater than 35 percent.
``(C) Loss mitigation responsibilities.--This section may
not be construed to alter or in any way affect the
responsibilities of any party (including the mortgage
servicer) to engage in any or all loan modification or other
loss mitigation strategies to maximize value to investors as
established by any applicable contract.
``(3) Eligibility of mortgages by date of origination.--The
existing senior mortgage shall have been originated on or
before December 31, 2007.
``(4) Maximum loan-to-value ratio for new loans.--The
mortgage being insured under this section shall involve a
principal obligation (including such initial service charges,
appraisal, inspection, and other fees as the Secretary shall
approve and including the mortgage insurance premium paid
pursuant to subsection (e)(1)) in an amount not to exceed 90
percent of the current appraised value of the property.
Section 203(d) shall not apply to mortgages insured under
this section.
``(5) Required waiver of prepayment penalties and fees.--
All penalties for prepayment of the existing mortgage or
mortgages, and all fees and penalties related to default or
delinquency on all existing mortgages or mortgages, shall be
waived or forgiven.
``(6) Required loan reduction.--
``(A) Reduction of indebtedness under existing senior
mortgage.--The amount of indebtedness on the existing
mortgage or mortgages on the residence shall have been
substantially reduced by such percentage as the Oversight
Board may require, and such reduction shall be at least
sufficient to--
``(i) provide for the refinancing of such existing mortgage
or mortgages in an amount not greater than 90 percent of the
current appraised value of the property involved;
``(ii) pay the full amount of the single premium to be
collected pursuant to subsection (e)(1) (which shall be an
amount equal to 3.0 percent of the amount of the original
insured principal obligation of the mortgage insured under
this section and which shall serve as an additional reserve
to cover possible loan losses); and
``(iii) pay the full amount of the loan origination fee and
any other closing costs, not to exceed 2.0 percent of the
amount of the original insured principal obligation of the
mortgage insured under this section.
``(B) Extinguishment of debt by refinancing.--
``(i) Required agreement.--All existing holders of mortgage
liens on the property securing the mortgage to be insured
under this section shall agree to accept the proceeds of the
insured loan as payment in full of all indebtedness under all
existing mortgages, and all encumbrances related to such
mortgages shall be removed. The Oversight Board may take such
actions as the Oversight Board considers necessary or
appropriate to facilitate coordination and agreement between
the holders of the existing senior mortgage and any existing
subordinate mortgages, taking into consideration the
subordinate lien status of such subordinate mortgages, to
comply with the requirement under this subparagraph.
``(ii) Treatment of multiple mortgage liens.--In addition
to clause (i), the Oversight Board shall adopt one of the
following approaches for all mortgages or such classes of
mortgages as the Oversight Board may determine and may, from
time to time, reconsider:
``(I) Fixed price.--As a requirement for participating in
this program, all existing lien holders will agree to not
provide any payment to subordinate lien holders other than
such payment in accordance with a formula established by the
Oversight Board as set forth in clause (iii); except that the
Oversight Board may establish a short period within which
first and subordinate lien holders may negotiate to
extinguish all subordinate liens for compensation that may be
different from the amount determined under such formula set
forth in clause (iii).
``(II) Shared equity.--The Oversight Board may require the
mortgagor under a mortgage insured under this section to
agree to share a portion of any future equity in the
mortgaged property with holders of existing subordinate
mortgages, in accordance with a formula for such shared
equity established by the Oversight Board as set forth in
clause (iii), except that payments of such shared equity may
be made only after the Secretary recovers all amounts owed to
the Secretary with respect to such mortgage pursuant to the
program under this section (including amounts owed pursuant
to paragraph (8)).
``(iii) Formula.--In determining a formula for determining
any payments to subordinate lien holders pursuant to
subclauses (I) and (II) of clause (ii), and in any
reconsideration of such formula as the Oversight Board may
from time to time undertake, the Oversight Board shall take
into consideration the
[[Page H3222]]
current market value of such liens. In no case may a formula
provide for the payment of more than 1 percent of the current
appraised value of the mortgaged property to a subordinate
lien holder if the outstanding balance owed to more senior
lien holders is equal to or exceeds such current appraised
value.
``(iv) Voluntary program.--This section may not be
construed to require any holder of any existing mortgage to
participate in the program under this section generally, or
with respect to any particular loan.
``(v) Source of payments for subordinate loans.--Any
amounts paid to holders of any existing subordinate mortgages
in connection with the origination and insurance of a
mortgage under this section shall derive only from--
``(I) the holder of the existing senior mortgage; or
``(II) in the case only of the shared equity approach under
clause (ii)(II), the mortgagor under the mortgage insured
under this section
``(7) Required reduction of debt service.--The debt service
payments due under the mortgage insured under this section
shall be in an amount that is substantially reduced from the
debt service payments due under the existing mortgage or
mortgages, which reduction may be achieved through a
reduction of indebtedness, a reduction in the interest rate
being paid, or an extension of the term of the mortgage, or
any combination thereof.
``(8) Financial recovery to federal government through exit
premium.--
``(A) Subordinate lien.--The mortgage shall provide that
the Secretary shall retain a lien on the residence involved,
which shall be subordinate to the mortgage insured under this
section but senior to all other mortgages on the residence
that may exist at any time, and which shall secure the
repayment of the amount due under subparagraph (D).
``(B) No interest or payment during mortgage.--The amount
secured by the lien retained by the Secretary pursuant to
subparagraph (A) shall not bear interest and shall not be
repayable to the Secretary except as provided in subparagraph
(D) of this paragraph.
``(C) Net proceeds available for exit premium.--Upon the
sale, refinancing, or other disposition of the residence
securing a mortgage insured under this section, any proceeds
resulting from such disposition that remain after deducting
the remaining insured principal balance of the mortgage
insured under this section shall be available to meet the
obligation under subparagraph (D). In the case of a
refinance, non-arms length transaction, or such other
transaction as the Oversight Board shall determine, the
proceeds shall be based on the current appraised value at the
time of the refinance or transaction.
``(D) Exit premium.--Upon any refinancing of the mortgage
insured under this section or any sale or disposition of the
residence securing the mortgage, the Secretary shall, subject
to the availability of sufficient net proceeds described in
subparagraph (C), receive the greater of--
``(i) 3 percent of the amount of the original insured
principal obligation of the mortgage (or the entire amount of
the net proceeds described in subparagraph (C) if such net
proceeds are less than 3 percent of the amount of the
original insured principal obligation of the mortgage); or
``(ii) a percentage of the portion of the net proceeds
available for profit-sharing, as described in subparagraph
(E), which shall be--
``(I) in the case of any refinancing, sale, or disposition
occurring during the first year of the term of the mortgage,
100 percent of such net proceeds;
``(II) in the case of any refinancing, sale, or disposition
occurring during the second year of the term of the mortgage,
80 percent;
``(III) in the case of any refinancing, sale, or
disposition occurring during the third year of the term of
the mortgage, 60 percent; and
``(IV) in the case of any refinancing, sale, or disposition
occurring during the fourth year of the term of the mortgage
or at any time thereafter, 50 percent;
except that such percentage of proceeds shall be reduced by
all fees the Secretary has collected for the mortgage prior
to such refinancing, sale, or disposition.
``(E) Net proceeds available for profit-sharing.--With
respect to any mortgage insured under this section, the net
proceeds available for purposes of subparagraph (D)(ii) shall
be any proceeds resulting from the sale, refinancing, or
other disposition of the residence securing the mortgage that
remain after deducting the original insured principal
obligation of the mortgage. In the case of a refinance, non-
arms length transaction, or such other transaction as the
Oversight Board shall determine, the proceeds shall be based
on the current appraised value at the time of the refinance
or transaction.
``(F) Authority to prohibit new second liens.--The
Oversight Board shall prohibit borrowers from granting a new
second lien on the mortgaged property during the first five
years of the term of the mortgage insured under this section,
except as the Oversight Board determines to be necessary to
ensure the appropriate maintenance of the mortgaged property.
``(9) Documentation and verification of income.--In
complying with the FHA underwriting requirements under the
program under this section, the mortgagee shall document and
verify the income of the mortgagor or non-filing status by
procuring (A) an income tax return transcript of the income
tax returns of the mortgagor, or (B) a copy of the income tax
returns for the Internal Revenue Service, for the two most
recent years for which the filing deadline for such years has
passed and by any other method, in accordance with procedures
and standards that the Oversight Board shall establish.
``(10) Fixed rate mortgage.--The mortgage insured under
this section shall bear interest at a single rate that is
fixed for the entire term of the mortgage.
``(11) Maximum loan amount.--Notwithstanding section
203(b)(2), the mortgage being insured under this section
shall involve a principal obligation in an amount that does
not exceed the limitation (for a property of the applicable
size) on the amount of the principal obligation that would be
allowable under the terms of section 202(a) of the Economic
Stimulus Act of 2008 if the mortgage were insured pursuant to
such section. The limitation on the amount of the principal
obligation allowable under such Act shall apply for the
purposes of this section until the termination under
subsection (n) of the program under this section.
``(12) Ineligibility for fraud conviction.--The mortgagor
shall not have been convicted under Federal or State law for
mortgage fraud during the 7-year period ending upon the
insurance of the mortgage under this section.
``(13) Lender review.--The mortgagee under the mortgage
shall conduct an electronic database search of the
mortgagor's criminal history to determine if the mortgagor
has had a conviction described in paragraph (12). The
mortgagee may charge the mortgagor a reasonable fee for the
actual cost of the search not to exceed a maximum rate
established by the Oversight Board. The Oversight Board may
provide clarification, if needed, to help mortgagees identify
any differences among the States in how they report mortgage
fraud convictions. The Oversight Board shall establish
procedures sufficient to allow the mortgagor to challenge a
mortgagee's determination with respect to paragraph (12)
(including to correct inaccuracies resulting from theft of
the mortgagor's identity or personally identifiable
information).
``(14) Appraisals.--Any appraisal conducted in connection
with a mortgage insured under this section shall--
``(A) be based on the current value of the property;
``(B) be conducted in accordance with title XI of the
Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 (12 U.S.C. 3331 et seq.);
``(C) be completed by an appraiser who meets the competency
requirements of the Uniform Standards of Professional
Appraisal Practice;
``(D) be wholly consistent with the appraisal standards,
practices, and procedures under section 202(e) of this Act
that apply to all loans insured under this Act; and
``(E) comply with the requirements of subsection (g) of
this section (relating to appraisal independence).
``(15) Statement of loan terms.--
``(A) Requirement.--The mortgagor shall have been provided
by the mortgagee, not later than three days before closing
for the mortgage, a form described in subparagraph (B)
appropriately and accurately completed by the mortgagee.
``(B) Form.--The form described in this subparagraph shall
be a single page, written disclosure regarding the mortgage
loan to be insured under this section that, when completed by
the mortgagee, sets forth, in accordance with such
requirements as the Secretary shall by regulation establish a
best possible estimate of--
``(i) the total loan amount under the mortgage;
``(ii) the loan-to-value ratio for the mortgage;
``(iii) the final maturity date for the mortgage;
``(iv) the amount of any prepayment fee to be charged if
the mortgage is paid in full before the final maturity date
for the mortgage, including the percentages of any net
proceeds to be received by the Secretary pursuant to
paragraph (8)(D)(ii);
``(v) the amount of the exit premium under the mortgage
pursuant to subsection (e)(3);
``(vi) the interest rate under the mortgage expressed as an
annual percentage rate, and the amount of the monthly payment
due under such rate;
``(vii) the fully indexed rate of interest under the
mortgage expressed as an annual percentage rate and the
amount of the monthly payment due under such rate;
``(viii) the monthly household income of the borrower upon
which the mortgage is based;
``(ix) the amount of the monthly payment due under the
mortgage, and the amount of such initial monthly payment plus
monthly amounts due for taxes and insurance on the property
for which the mortgage is made, both expressed as a
percentage of the monthly household income of the borrower;
and
``(x) the aggregate amount of settlement charges for all
settlement services provided in connection with the mortgage,
the amount of such charges that are included in the principal
amount and the amount of such charges the borrower must pay
at closing, the aggregate amount of mortgagee's fees
[[Page H3223]]
connection with the mortgage, and the aggregate amount of
other fees or required payments in connection with the
mortgage.
``(d) Flexible Underwriting Criteria.--
``(1) In general.--The Oversight Board shall establish, and
the Secretary acting on behalf of the Oversight Board shall
implement, underwriting standards for mortgages insured under
this section that--
``(A) ensure that each mortgagor under a mortgage insured
under this section has a reasonable expectation of repaying
the mortgage, taking into consideration the mortgagor's
income, assets, liabilities, payment history, and other
applicable criteria, but which shall not result in a denial
of insurance solely on the basis of the mortgagor's current
FICO or other credit scores, or any delinquency or default by
the mortgagor under the existing mortgage or mortgages, or
any case filed under title 11, United States Code, by the
mortgagor; and
``(B) subject to the provisions of subparagraph (A), permit
a total debt-to-income ratio of up to 43 percent.
``(2) Exception.--
``(A) In general.--Subject to the underwriting standards
established under paragraph (1)(A) and any additional
requirements that the Oversight Board considers appropriate,
the Oversight Board shall permit a total debt-to-income ratio
of more than 43 percent, but not more than 50 percent, if the
mortgagor has made, on a timely basis before the endorsement
of the mortgage insured under this section, not less than six
months of payments in an amount not less than the amount of
the monthly payment due under the mortgage to be insured
under this section. The holder of the existing senior
mortgage shall exercise forbearance with respect to such
mortgage during the period in which such payments are made.
``(B) Computation of debt-to-income ratio.-- In computing
the mortgagor's total debt-to-income ratio for purposes of
mortgage qualification under the underwriting standards
established pursuant to this section--
``(i) if the mortgagor is a debtor in a case under chapter
13 of title 11, United States Code, payments on recurring
debts other than housing expenses shall be based on the
amounts being paid on such debts under the mortgagor's
confirmed plan under such chapter; and
``(ii) if the mortgagor is a debtor in a case under chapter
7 of title 11, United States Code, recurring debts that are
to be discharged in that case shall not be considered.
``(3) Authority.--The Oversight Board may alter the ratios
under this subsection for a particular class of borrowers
subject to such requirements as the Board determines is
necessary and appropriate to fulfill the purposes of this
Act.
``(4) Representations and warranties.--The Oversight Board
shall require the underwriter of the insured loan to provide
such representations and warranties as the Oversight Board
considers necessary or appropriate for the Secretary to
enforce compliance with all underwriting and appraisal
standards of the program.
``(e) Premiums.--For each mortgage insured under this
section, the Oversight Board shall establish and the
Secretary shall collect--
``(1) at the time of insurance, a single premium payment in
an amount equal to 3.0 percent of the amount of the original
insured principal obligation of the mortgage, which shall be
paid from the proceeds of the mortgage being insured under
this section, through the reduction of the amount of
indebtedness on the existing senior mortgage required under
subsection (c)(6)(A);
``(2) in addition to the premium under paragraph (1),
annual premium payments in an amount equal to 1.50 percent of
the remaining insured principal balance of the mortgage; and
``(3) an exit premium in the amount determined under
subsection (c)(8), but which shall not be less than 3.0
percent of the original insured principal obligation of the
mortgage, subject only to the availability of sufficient net
proceeds from sale, refinancing, or other disposition of the
property, as determined in subsection (c)(8).
``(f) Origination Fees and Mortgage Rate.--The Oversight
Board shall establish and the Secretary shall implement a
reasonable limitation on origination fees for mortgages
insured under this section and shall establish procedures to
ensure that interest rates on such mortgages shall be
commensurate with market rate interest rates on such types of
loans.
``(g) Appraisal Independence.--
``(1) Prohibitions on interested parties in a real estate
transaction.--No mortgage lender, mortgage broker, mortgage
banker, real estate broker, appraisal management company,
employee of an appraisal management company, nor any other
person with an interest in a real estate transaction
involving an appraisal in connection with a mortgage insured
under this section shall improperly influence, or attempt to
improperly influence, through coercion, extortion, collusion,
compensation, instruction, inducement, intimidation, non-
payment for services rendered, or bribery, the development,
reporting, result, or review of a real estate appraisal
sought in connection with the mortgage.
``(2) Exceptions.--The requirements of paragraph (1) shall
not be construed as prohibiting a mortgage lender, mortgage
broker, mortgage banker, real estate broker, appraisal
management company, employee of an appraisal management
company, or any other person with an interest in a real
estate transaction from asking an appraiser to provide 1 or
more of the following services:
``(A) Consider additional, appropriate property
information, including the consideration of additional
comparable properties to make or support an appraisal.
``(B) Provide further detail, substantiation, or
explanation for the appraiser's value conclusion.
``(C) Correct errors in the appraisal report.
``(3) Civil monetary penalties.--The Secretary may impose a
civil money penalty for any knowing and material violation of
paragraph (1) under the same terms and conditions as are
authorized in section 536(a) of this Act.
``(h) Limitation on Aggregate Insurance Authority.--The
aggregate original principal obligation of all mortgages
insured under this section may not exceed $300,000,000,000.
``(i) Enhancement of FHA Capacity.--Under the direction of
the Oversight Board, the Secretary shall take such actions as
may be necessary to--
``(1) contract for the establishment of underwriting
criteria, automated underwriting systems, pricing standards,
and other factors relating to eligibility for mortgages
insured under this section;
``(2) contract for independent quality reviews of
underwriting, including appraisal reviews and fraud
detection, of mortgages insured under this section or pools
of such mortgages; and
``(3) increase personnel of the Department as necessary to
process or monitor the processing of mortgages insured under
this section.
``(j) Monitoring of Underwriting Risk.--
``(1) Monitoring of designated underwriters.--The Oversight
Board and the Secretary shall monitor independent quality
reviews as established pursuant to subsection (i)(2) to--
``(A) determine compliance of designated underwriters with
underwriting standards;
``(B) determine rates of delinquency, claims rates, and
loss rates of designated underwriters; and
``(C) terminate eligibility of designated underwriters that
do not meet minimum performance standards as the Oversight
Board may establish and the Secretary implements.
``(2) Reports by oversight board.--The Oversight Board
shall submit monthly reports to the Congress identifying the
progress of the program for mortgage insurance under this
section, which shall contain the following information for
each month:
``(A) The number of new mortgages insured under this
section, including the location of the properties subject to
such mortgages by census tract.
``(B) The aggregate principal obligation of new mortgages
insured under this section.
``(C) The average amount by which the indebtedness on
existing mortgages is reduced in accordance with subsection
(c)(6).
``(D) The average amount by which the debt service payments
on existing mortgages is reduced in accordance with
subsection (c)(7).
``(E) The amount of premiums collected for insurance of
mortgages under this section.
``(F) The claim and loss rates for mortgages insured under
this section.
``(G) The race, ethnicity, gender, and income of the
mortgagors, aggregated by geographical areas at least as
specific as census tracts, except where necessary to protect
privacy of the borrower.
``(H) Any other information that the Oversight Board
considers appropriate.
``(3) Report by inspector general.--The Inspector General
of the Department of Housing and Urban Development shall
conduct an annual audit of the program for mortgage insurance
under this section to determine compliance with this section
and program rules.
``(k) GNMA Commitment Authority.--
``(1) Guarantees.--The Secretary shall take such actions as
may be necessary to ensure that securities based on and
backed by a trust or pool composed of mortgages insured under
this section are available to be guaranteed by the Government
National Mortgage Association as to the timely payment of
principal and interest.
``(2) Guarantee authority.--To carry out the purposes of
section 306 of the National Housing Act (12 U.S.C. 1721), the
Government National Mortgage Association may enter into new
commitments to issue guarantees of securities based on or
backed by mortgages insured under this section, not exceeding
$300,000,000,000. The amount of authority provided under the
preceding sentence to enter into new commitments to issue
guarantees is in addition to any amount of authority to make
new commitments to issue guarantees that is provided to the
Association under any other provision of law.
``(l) Special Risk Insurance Fund.--The insurance of each
mortgage under this section shall be the obligation of the
Special Risk Insurance Fund established by section 238.
``(m) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) Existing mortgage.--The term `existing mortgage'
means, with respect to a mortgage insured under this section,
a mortgage that is to be extinguished, and paid or prepaid,
from the proceeds of the mortgage insured under this section.
[[Page H3224]]
``(2) Existing senior mortgage.--The term `existing senior
mortgage' means, with respect to a mortgage insured under
this section, the existing mortgage that has superior
priority.
``(3) Existing subordinate mortgage.--The term `existing
subordinate mortgage' means, with respect to a mortgage
insured under this section, an existing mortgage that has
subordinate priority to the existing senior mortgage.
``(n) Sunset.--
``(1) In general.--Except as provided in paragraph (2), the
authority of the Secretary to make any new commitment to
insure any mortgage under this section shall terminate upon
the expiration of the 2-year period beginning on the date of
the enactment of the FHA Housing Stabilization and
Homeownership Retention Act of 2008.
``(2) Extensions.--The Oversight Board may, not more than
four times, extend the authority to enter into new
commitments to insure mortgages under this section beyond the
date specified in paragraph (1), except that each such
extension shall--
``(A) be effective only if, before the program terminates
pursuant to paragraph (1) or any previous extension pursuant
to this paragraph, the Oversight Board--
``(i) certifies the need for such extension in writing to
the Congress; and
``(ii) causes notice of such extension to be published in
the Federal Register no later than the beginning of the 3-
month period that ends upon the scheduled termination date of
the program; and
``(B) be for a period of not more than 6 months.
``(o) Authorizations of Appropriations.--There is
authorized to be appropriated for each of fiscal years 2008
and 2009--
``(1) $230,000,000 for providing counseling regarding loss
mitigation for mortgagors with 1- to 4-family residences,
including determining eligibility for the program under this
section, with grants to be administered through the
Neighborhood Reinvestment Corporation, except that--
``(A) funds shall be targeted to States and communities
based on their levels of foreclosures and delinquencies in
2007 and 2008;
``(B) not less than 15 percent of the funds made available
pursuant to this paragraph shall be provided to counseling
organizations that target counseling services regarding loss
mitigation to minority and low-income homeowners or provide
such services in neighborhoods with high concentrations of
minority and low-income homeowners;
``(C) $35,000,000 of the funds made available pursuant to
this paragraph shall be used by the Neighborhood Reinvestment
Corporation (referred to in this subparagraph as the `NRC')
to make grants to State and local legal organizations or
attorneys that have demonstrated legal experience in home
foreclosure or eviction law to provide legal assistance
related to home ownership preservation, home foreclosure
prevention, and tenancy associated with home foreclosure or
to counseling intermediaries that have been approved by the
Department of Housing and Urban Development for the purpose
of making such grants or contracting for such legal
assistance; of the amount provided under this subparagraph,
at least 60 percent shall be allocated for legal assistance
to low-income homeowners or tenants; such attorneys shall be
capable of assisting homeowners in owner-occupied homes or
tenants who live in homes with mortgages in default, in
danger of default, or subject to or at risk of foreclosure or
eviction and who have legal issues that cannot be handled by
counselors employed by NRC intermediaries; in using the
amount made available under this subparagraph, the NRC shall
give priority consideration to State and local legal
organizations and attorneys that (i) provide legal assistance
in the 100 metropolitan statistical areas (as defined by the
Director of the Office of Management and Budget) with the
highest home foreclosure rates, and (ii) have the capacity to
begin using the financial assistance within 90 days after
receipt of the assistance; as a condition of the receipt of a
grant under this subparagraph, the grantee shall submit to
NRC information relating to the demographic characteristics
of the assisted homeowners or tenants, the dollar amount and
terms of the relevant mortgages and the outcome of legal
proceedings related to the foreclosure or eviction
proceedings, including the resolutions thereof; except that
no funds under this subparagraph shall be used for class
action litigation;
``(D) $20,000,000 of the funds made available pursuant to
this paragraph shall be used for such counseling for veterans
recently returning from active duty in the Armed Forces;
``(E) the NRC shall give priority consideration for funding
with amounts made available pursuant to this paragraph,
except for funds made available under subparagraphs (B), (C),
and (D), to entities that have an effective plan in place for
making contact, including personal contact, with defaulted
mortgagors, and such a plan may include use of third parties
(including both for-profit and not-for-profit entities) to
make personal contact with defaulted mortgagors, or visits to
such mortgagors, or both;
``(F) except with respect to funds reserved under
subparagraphs (B), (C), and (D), the NRC shall give priority
consideration for funding with amounts made available
pursuant to this paragraph to entities that have a written
plan that has been implemented for providing in-person
counseling and for making contact, including personal
contact, with defaulted mortgagors, for the purpose of
providing counseling or providing information about available
counseling, both (i) prior to commencement of any foreclosure
proceedings, and (ii) in the event effective in person or
phone contact has not been made with such defaulted
mortgagors prior thereto, then prior to the conclusion of the
foreclosure process; and
``(G) not less than 2 percent of the funds made available
pursuant to this paragraph shall be used only for identifying
and notifying borrowers under existing mortgages who are
eligible under this section for insurance of refinancing
mortgages, and in making funds reserved under this
subparagraph available for such purpose, the Secretary shall
give preference to assistance for programs that have a proven
history of outreach within minority communities; and
``(2) $150,000,000 for costs of activities under subsection
(i).
``(p) Audit and Report by Inspector General.--
``(1) Audit.--The Inspector General of the Department of
Housing and Urban Development shall conduct an audit of the
program for loss mitigation counseling funded with amounts
made available under subsection (o)(1) to determine
compliance with such subsection.
``(2) Reports to congress.--Not later than March 30, 2009,
and every calendar quarter thereafter, the Inspector General
shall submit to the appropriate committees of the Congress a
report summarizing the activities of the Inspector General
and the Neighborhood Reinvestment Corporation during the 120-
day period ending on the date of such report. Each report
shall include, for the period covered by such report, a
detailed statement of all obligations, expenditures, and
revenues associated with paragraphs (1) and (2) of subsection
(o), including--
``(A) obligations and expenditures of appropriated funds;
``(B) the number of homeowners eligible in such program;
``(C) the number of homeowners participating in such
program;
``(D) the status of homeowners within such program;
``(E) the number of homeowners who have rejected assistance
from the Neighborhood Reinvestment Corporation; and
``(F) information on participating counseling services.''.
(b) Special Risk Insurance Fund.--Section 238 of the
National Housing Act (12 U.S.C. 1715z-3) is amended--
(1) in subsection (a)(1), by striking ``or 243'' each place
such term appears and inserting ``243, or 257''; and
(2) in subsection (b), by striking ``and 243'' each place
such term appears and inserting ``243, and 257''.
(c) FHA Reverse Mortgage Program.--Section 255(g) of the
National Housing Act (12 U.S.C. 1715z-20(g)) is amended by
striking the first sentence.
SEC. 113. STUDY OF AUCTION OR BULK REFINANCE PROGRAM.
(a) Study.--The Board of Governors of the Federal Reserve
System (in this section referred to as the ``Board of
Governors''), in consultation with other members of the
Oversight Board established by section 257(a) of the National
Housing Act (as added by the amendment made by section 112(a)
of this title), shall conduct a study of the need for and
efficacy of an auction or bulk refinancing mechanism to
facilitate refinancing of existing residential mortgages that
are at risk for foreclosure into mortgages insured under the
mortgage insurance program under title II of the National
Housing Act. The study shall identify and examine various
options for mechanisms under which lenders and servicers of
such mortgages may make bids for forward commitments for such
insurance in an expedited manner.
(b) Content.--
(1) Analysis.--The study required under subsection (a)
shall analyze--
(A) the feasibility of establishing a mechanism that would
facilitate the more rapid refinancing of borrowers at risk of
foreclosure into performing mortgages insured under title II
of the National Housing Act;
(B) whether such a mechanism would provide an effective and
efficient mechanism to reduce foreclosures on qualified
existing mortgages;
(C) whether the use of an auction or bulk refinance program
is necessary to stabilize the housing market and reduce the
impact of turmoil in that market on the economy of the United
States;
(D) whether there are other mechanisms or authority that
would be useful to reduce foreclosure; and
(E) and any other factors that the Board of Governors
considers relevant.
(2) Determinations.--To the extent that the Board of
Governors finds that a facility of the type described in
paragraph (1) is feasible and useful, the study shall--
(A) determine and identify any additional authority or
resources needed to establish and operate such a mechanism;
(B) determine whether there is a need for additional
authority with respect to the loan underwriting criteria
included in the amendment made by section 112(a) of this
title or with respect to eligibility of participating
borrowers, lenders, or holders of liens;
(C) determine whether such underwriting criteria should be
established on the basis of individual loans, in the
aggregate, or otherwise to facilitate the goal of refinancing
borrowers at risk of foreclosure into viable
[[Page H3225]]
loans insured under the National Housing Act.
(c) Report.--Not later than the expiration of the 60-day
period beginning on the date of the enactment of this Act,
the Board of Governors shall submit a report regarding the
results of the study conducted under this section to the
Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate. The report shall include a
detailed description of the analysis required under
subsection (b)(1) and of the determinations made pursuant to
subsection (b)(2), and shall include any other findings and
recommendations of the Board of Governors pursuant to the
study, including identifying various options for mechanisms
described in subsection (a).
SEC. 114. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT
FOR CERTAIN HOUSING LOANS GUARANTEED BY
SECRETARY OF VETERANS AFFAIRS.
Notwithstanding subparagraph (C) of section 3703(a)(1) of
title 38, United States Code, for purposes of any loan
described in subparagraph (A)(i)(IV) of such section that is
originated during the period beginning on the date of the
enactment of this Act and ending on December 31, 2008, the
term ``maximum guaranty amount'' shall mean an amount equal
to 25 percent of the higher of--
(1) the limitation determined under section 305(a)(2) of
the Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)(2)) for the calendar year in which the loan is
originated for a single-family residence; or
(2) 125 percent of the area median price for a single-
family residence, but in no case to exceed 175 percent of the
limitation determined under such section 305(a)(2) for the
calendar year in which the loan is originated for a single-
family residence.
SEC. 115. STUDY OF POSSIBLE ACCOUNTING REVISIONS RELATING TO
PROPERTY AT RISK OF FORECLOSURE AND THE
AVAILABILITY OF CREDIT FOR REFINANCING HOME
MORTGAGES AT RISK OF FORECLOSURE.
(a) Study Required.--The Securities and Exchange
Commission, in consultation with the Board of Governors of
the Federal Reserve System, shall conduct a study on fair
value accounting standards applicable to financial
institutions, including depository institutions, with respect
to their residential mortgages that are at risk of
foreclosure and mortgage-backed securities involving such
mortgages, the effects of such accounting standards on a
financial institution's balance sheet and capacity to provide
refinancing to residential mortgagors that are at risk of
foreclosure and to residential mortgagors during periods of
market value declines and increased foreclosures, and the
advisability and feasibility of modifications of such
standards during periods of market fluctuation in order to
maintain the ability of the institution to continue to carry
mortgages on residential property at risk of foreclosure and
assure the availability of credit to refinance at-risk
residential mortgages.
(b) Report Required.--The Securities and Exchange
Commission shall submit a report to the Congress before the
end of the 90-day period beginning on the date of the
enactment of this Act containing the findings and
determinations of the Commission with respect to the study
conducted under subsection (a) and such administrative and
legislative recommendations as the Commission may determine
to be appropriate.
SEC. 116. GAO STUDY OF THE EFFECT OF TIGHTENING CREDIT
MARKETS IN COMMUNITIES AFFECTED BY THE SUBPRIME
MORTGAGE FORECLOSURE CRISES AND PREDATORY
LENDING ON PROSPECTIVE FIRST-TIME HOMEBUYERS
SEEKING MORTGAGES.
The Comptroller General of the United States shall conduct
a study to analyze the effects of tightening credit markets
on prospective first-time home buyers who reside in selected
communities that have been most detrimentally affected by
both the current subprime mortgage foreclosure crisis and
predatory mortgage lending. Such study shall also analyze the
adequacy of financial literacy outreach efforts by agencies
of the Federal Government tasked with implementing financial
literacy education in such communities and shall assess
whether the current funding levels for such efforts are at
sufficient levels to reduce the levels of subprime mortgage
delinquencies and foreclosures and to increase the level of
financial literacy in the selected communities so as to
minimize the incidences of predatory mortgage lending. Not
later than the expiration of the 6-month period beginning on
the date of the enactment of this Act, the Comptroller
General shall submit a report to the Congress setting forth
the results of the study and including recommendations
regarding such funding levels.
Subtitle B--Office of Housing Counseling
SEC. 131. SHORT TITLE.
This subtitle may be cited as the ``Expand and Preserve
Home Ownership Through Counseling Act''.
SEC. 132. ESTABLISHMENT OF OFFICE OF HOUSING COUNSELING.
Section 4 of the Department of Housing and Urban
Development Act (42 U.S.C. 3533) is amended by adding at the
end the following new subsection:
``(g) Office of Housing Counseling.--
``(1) Establishment.--There is established, in the Office
of the Secretary, the Office of Housing Counseling.
``(2) Director.--There is established the position of
Director of Housing Counseling. The Director shall be the
head of the Office of Housing Counseling and shall be
appointed by the Secretary. Such position shall be a career-
reserved position in the Senior Executive Service.
``(3) Functions.--
``(A) In general.--The Director shall have ultimate
responsibility within the Department, except for the
Secretary, for all activities and matters relating to
homeownership counseling and rental housing counseling,
including--
``(i) research, grant administration, public outreach, and
policy development relating to such counseling; and
``(ii) establishment, coordination, and administration of
all regulations, requirements, standards, and performance
measures under programs and laws administered by the
Department that relate to housing counseling, homeownership
counseling (including maintenance of homes), mortgage-related
counseling (including home equity conversion mortgages and
credit protection options to avoid foreclosure), and rental
housing counseling, including the requirements, standards,
and performance measures relating to housing counseling.
``(B) Specific functions.--The Director shall carry out the
functions assigned to the Director and the Office under this
section and any other provisions of law. Such functions shall
include establishing rules necessary for--
``(i) the counseling procedures under section 106(g)(1) of
the Housing and Urban Development Act of 1968 (12 U.S.C.
1701x(h)(1));
``(ii) carrying out all other functions of the Secretary
under section 106(g) of the Housing and Urban Development Act
of 1968, including the establishment, operation, and
publication of the availability of the toll-free telephone
number under paragraph (2) of such section;
``(iii) carrying out section 5 of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2604) for home
buying information booklets prepared pursuant to such
section;
``(iv) carrying out the certification program under section
106(e) of the Housing and Urban Development Act of 1968 (12
U.S.C. 1701x(e));
``(v) carrying out the assistance program under section
106(a)(4) of the Housing and Urban Development Act of 1968,
including criteria for selection of applications to receive
assistance;
``(vi) carrying out any functions regarding abusive,
deceptive, or unscrupulous lending practices relating to
residential mortgage loans that the Secretary considers
appropriate, which shall include conducting the study under
section 136 of the Expand and Preserve Home Ownership Through
Counseling Act;
``(vii) providing for operation of the advisory committee
established under paragraph (4) of this subsection;
``(viii) collaborating with community-based organizations
with expertise in the field of housing counseling; and
``(ix) providing for the building of capacity to provide
housing counseling services in areas that lack sufficient
services.
``(4) Advisory committee.--
``(A) In general.--The Secretary shall appoint an advisory
committee to provide advice regarding the carrying out of the
functions of the Director.
``(B) Members.--Such advisory committee shall consist of
not more than 12 individuals, and the membership of the
committee shall equally represent all aspects of the mortgage
and real estate industry, including consumers.
``(C) Terms.--Except as provided in subparagraph (D), each
member of the advisory committee shall be appointed for a
term of 3 years. Members may be reappointed at the discretion
of the Secretary.
``(D) Terms of initial appointees.--As designated by the
Secretary at the time of appointment, of the members first
appointed to the advisory committee, 4 shall be appointed for
a term of 1 year and 4 shall be appointed for a term of 2
years.
``(E) Prohibition of pay; travel expenses.--Members of the
advisory committee shall serve without pay, but shall receive
travel expenses, including per diem in lieu of subsistence,
in accordance with applicable provisions under subchapter I
of chapter 57 of title 5, United States Code.
``(F) Advisory role only.--The advisory committee shall
have no role in reviewing or awarding housing counseling
grants.
``(5) Scope of homeownership counseling.--In carrying out
the responsibilities of the Director, the Director shall
ensure that homeownership counseling provided by, in
connection with, or pursuant to any function, activity, or
program of the Department addresses the entire process of
homeownership, including the decision to purchase a home, the
selection and purchase of a home, issues arising during or
affecting the period of ownership of a home (including
refinancing, default and foreclosure, and other financial
decisions), and the sale or other disposition of a home.''.
SEC. 133. COUNSELING PROCEDURES.
(a) In General.--Section 106 of the Housing and Urban
Development Act of 1968 (12 U.S.C. 1701x) is amended by
adding at the end the following new subsection:
[[Page H3226]]
``(g) Procedures and Activities.--
``(1) Counseling procedures.--
``(A) In general.--The Secretary shall establish,
coordinate, and monitor the administration by the Department
of Housing and Urban Development of the counseling procedures
for homeownership counseling and rental housing counseling
provided in connection with any program of the Department,
including all requirements, standards, and performance
measures that relate to homeownership and rental housing
counseling.
``(B) Homeownership counseling.--For purposes of this
subsection and as used in the provisions referred to in this
subparagraph, the term `homeownership counseling' means
counseling related to homeownership and residential mortgage
loans. Such term includes counseling related to homeownership
and residential mortgage loans that is provided pursuant to--
``(i) section 105(a)(20) of the Housing and Community
Development Act of 1974 (42 U.S.C. 5305(a)(20));
``(ii) in the United States Housing Act of 1937--
``(I) section 9(e) (42 U.S.C. 1437g(e));
``(II) section 8(y)(1)(D) (42 U.S.C. 1437f(y)(1)(D));
``(III) section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D));
``(IV) section 23(c)(4) (42 U.S.C. 1437u(c)(4));
``(V) section 32(e)(4) (42 U.S.C. 1437z-4(e)(4));
``(VI) section 33(d)(2)(B) (42 U.S.C. 1437z-5(d)(2)(B));
``(VII) sections 302(b)(6) and 303(b)(7) (42 U.S.C.
1437aaa-1(b)(6), 1437aaa-2(b)(7)); and
``(VIII) section 304(c)(4) (42 U.S.C. 1437aaa-3(c)(4));
``(iii) section 302(a)(4) of the American Homeownership and
Economic Opportunity Act of 2000 (42 U.S.C. 1437f note);
``(iv) sections 233(b)(2) and 258(b) of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C.
12773(b)(2), 12808(b));
``(v) this section and section 101(e) of the Housing and
Urban Development Act of 1968 (12 U.S.C. 1701x, 1701w(e));
``(vi) section 220(d)(2)(G) of the Low-Income Housing
Preservation and Resident Homeownership Act of 1990 (12
U.S.C. 4110(d)(2)(G));
``(vii) sections 422(b)(6), 423(b)(7), 424(c)(4),
442(b)(6), and 443(b)(6) of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12872(b)(6), 12873(b)(7),
12874(c)(4), 12892(b)(6), and 12893(b)(6));
``(viii) section 491(b)(1)(F)(iii) of the McKinney-Vento
Homeless Assistance Act (42 U.S.C. 11408(b)(1)(F)(iii));
``(ix) sections 202(3) and 810(b)(2)(A) of the Native
American Housing and Self-Determination Act of 1996 (25
U.S.C. 4132(3), 4229(b)(2)(A));
``(x) in the National Housing Act--
``(I) in section 203 (12 U.S.C. 1709), the penultimate
undesignated paragraph of paragraph (2) of subsection (b),
subsection (c)(2)(A), and subsection (r)(4);
``(II) subsections (a) and (c)(3) of section 237 (12 U.S.C.
1715z-2); and
``(III) subsections (d)(2)(B) and (m)(1) of section 255 (12
U.S.C. 1715z-20);
``(xi) section 502(h)(4)(B) of the Housing Act of 1949 (42
U.S.C. 1472(h)(4)(B)); and
``(xii) section 508 of the Housing and Urban Development
Act of 1970 (12 U.S.C. 1701z-7).
``(C) Rental housing counseling.--For purposes of this
subsection, the term `rental housing counseling' means
counseling related to rental of residential property, which
may include counseling regarding future homeownership
opportunities and providing referrals for renters and
prospective renters to entities providing counseling and
shall include counseling related to such topics that is
provided pursuant to--
``(i) section 105(a)(20) of the Housing and Community
Development Act of 1974 (42 U.S.C. 5305(a)(20));
``(ii) in the United States Housing Act of 1937--
``(I) section 9(e) (42 U.S.C. 1437g(e));
``(II) section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D));
``(III) section 23(c)(4) (42 U.S.C. 1437u(c)(4));
``(IV) section 32(e)(4) (42 U.S.C. 1437z-4(e)(4));
``(V) section 33(d)(2)(B) (42 U.S.C. 1437z-5(d)(2)(B)); and
``(VI) section 302(b)(6) (42 U.S.C. 1437aaa-1(b)(6));
``(iii) section 233(b)(2) of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12773(b)(2));
``(iv) section 106 of the Housing and Urban Development Act
of 1968 (12 U.S.C. 1701x);
``(v) section 422(b)(6) of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12872(b)(6));
``(vi) section 491(b)(1)(F)(iii) of the McKinney-Vento
Homeless Assistance Act (42 U.S.C. 11408(b)(1)(F)(iii));
``(vii) sections 202(3) and 810(b)(2)(A) of the Native
American Housing and Self-Determination Act of 1996 (25
U.S.C. 4132(3), 4229(b)(2)(A)); and
``(viii) the rental assistance program under section 8 of
the United States Housing Act of 1937 (42 U.S.C. 1437f).
``(2) Standards for materials.--The Secretary, in
conjunction with the advisory committee established under
subsection (g)(4) of the Department of Housing and Urban
Development Act, shall establish standards for materials and
forms to be used, as appropriate, by organizations providing
homeownership counseling services, including any recipients
of assistance pursuant to subsection (a)(4).
``(3) Mortgage software systems.--
``(A) Certification.--The Secretary shall provide for the
certification of various computer software programs for
consumers to use in evaluating different residential mortgage
loan proposals. The Secretary shall require, for such
certification, that the mortgage software systems take into
account--
``(i) the consumer's financial situation and the cost of
maintaining a home, including insurance, taxes, and
utilities;
``(ii) the amount of time the consumer expects to remain in
the home or expected time to maturity of the loan;
``(iii) such other factors as the Secretary considers
appropriate to assist the consumer in evaluating whether to
pay points, to lock in an interest rate, to select an
adjustable or fixed rate loan, to select a conventional or
government-insured or guaranteed loan and to make other
choices during the loan application process.
If the Secretary determines that available existing software
is inadequate to assist consumers during the residential
mortgage loan application process, the Secretary shall
arrange for the development by private sector software
companies of new mortgage software systems that meet the
Secretary's specifications.
``(B) Use and initial availability.--Such certified
computer software programs shall be used to supplement, not
replace, housing counseling. The Secretary shall provide that
such programs are initially used only in connection with the
assistance of housing counselors certified pursuant to
subsection (e).
``(C) Availability.--After a period of initial availability
under subparagraph (B) as the Secretary considers
appropriate, the Secretary shall take reasonable steps to
make mortgage software systems certified pursuant to this
paragraph widely available through the Internet and at public
locations, including public libraries, senior-citizen
centers, public housing sites, offices of public housing
agencies that administer rental housing assistance vouchers,
and housing counseling centers.
``(4) National public service multimedia campaigns to
promote housing counseling.--
``(A) In general.--The Director of Housing Counseling shall
develop, implement, and conduct national public service
multimedia campaigns designed to make persons facing mortgage
foreclosure, persons considering a subprime mortgage loan to
purchase a home, elderly persons, persons who face language
barriers, low-income persons, and other potentially
vulnerable consumers aware that it is advisable, before
seeking or maintaining a residential mortgage loan, to obtain
homeownership counseling from an unbiased and reliable
sources and that such homeownership counseling is available,
including through programs sponsored by the Secretary of
Housing and Urban Development.
``(B) Contact information.--Each segment of the multimedia
campaign under subparagraph (A) shall publicize the toll-free
telephone number and web site of the Department of Housing
and Urban Development through which persons seeking housing
counseling can locate a housing counseling agency in their
State that is certified by the Secretary of Housing and Urban
Development and can provide advice on buying a home, renting,
defaults, foreclosures, credit issues, and reverse mortgages.
``(C) Authorization of appropriations.--There are
authorized to be appropriated to the Secretary, not to exceed
$3,000,000 for fiscal years 2008, 2009, and 2010, for the
develop, implement, and conduct of national public service
multimedia campaigns under this paragraph.
``(5) Education programs.--The Secretary shall provide
advice and technical assistance to States, units of general
local government, and nonprofit organizations regarding the
establishment and operation of, including assistance with the
development of content and materials for, educational
programs to inform and educate consumers, particularly those
most vulnerable with respect to residential mortgage loans
(such as elderly persons, persons facing language barriers,
low-income persons, and other potentially vulnerable
consumers), regarding home mortgages, mortgage refinancing,
home equity loans, and home repair loans.''.
(b) Conforming Amendments to Grant Program for
Homeownership Counseling Organizations.--Section
106(c)(5)(A)(ii) of the Housing and Urban Development Act of
1968 (12 U.S.C. 1701x(c)(5)(A)(ii)) is amended--
(1) in subclause (III), by striking ``and'' at the end;
(2) in subclause (IV) by striking the period at the end and
inserting ``; and''; and
(3) by inserting after subclause (IV) the following new
subclause:
``(V) notify the housing or mortgage applicant of the
availability of mortgage software systems provided pursuant
to subsection (g)(3).''.
SEC. 134. GRANTS FOR HOUSING COUNSELING ASSISTANCE.
Section 106(a) of the Housing and Urban Development Act of
1968 (12 U.S.C. 1701x(a)(3)) is amended by adding at the end
the following new paragraph:
``(4) Homeownership and Rental Counseling Assistance.--
``(A) In general.--The Secretary shall make financial
assistance available under this paragraph to States, units of
general local governments, and nonprofit organizations
providing homeownership or rental counseling (as such terms
are defined in subsection (g)(1)).
[[Page H3227]]
``(B) Qualified entities.--The Secretary shall establish
standards and guidelines for eligibility of organizations
(including governmental and nonprofit organizations) to
receive assistance under this paragraph.
``(C) Distribution.--Assistance made available under this
paragraph shall be distributed in a manner that encourages
efficient and successful counseling programs.
``(D) Authorization of appropriations.--There are
authorized to be appropriated $45,000,000 for each of fiscal
years 2008 through 2011 for--
``(i) the operations of the Office of Housing Counseling of
the Department of Housing and Urban Development;
``(ii) the responsibilities of the Secretary under
paragraphs (2) through (5) of subsection (g); and
``(iii) assistance pursuant to this paragraph for entities
providing homeownership and rental counseling.''.
SEC. 135. REQUIREMENTS TO USE HUD-CERTIFIED COUNSELORS UNDER
HUD PROGRAMS.
Section 106(e) of the Housing and Urban Development Act of
1968 (12 U.S.C. 1701x(e)) is amended--
(1) by striking paragraph (1) and inserting the following
new paragraph:
``(1) Requirement for assistance.--An organization may not
receive assistance for counseling activities under subsection
(a)(1)(iii), (a)(2), (a)(4), (c), or (d) of this section, or
under section 101(e), unless the organization, or the
individuals through which the organization provides such
counseling, has been certified by the Secretary under this
subsection as competent to provide such counseling.'';
(2) in paragraph (2)--
(A) by inserting ``and for certifying organizations''
before the period at the end of the first sentence; and
(B) in the second sentence by striking ``for
certification'' and inserting ``, for certification of an
organization, that each individual through which the
organization provides counseling shall demonstrate, and, for
certification of an individual,'';
(3) in paragraph (3), by inserting ``organizations and''
before ``individuals'';
(4) by redesignating paragraph (3) as paragraph (5); and
(5) by inserting after paragraph (2) the following new
paragraphs:
``(3) Requirement under hud programs.--Any homeownership
counseling or rental housing counseling (as such terms are
defined in subsection (g)(1)) required under, or provided in
connection with, any program administered by the Department
of Housing and Urban Development shall be provided only by
organizations or counselors certified by the Secretary under
this subsection as competent to provide such counseling.
``(4) Outreach.--The Secretary shall take such actions as
the Secretary considers appropriate to ensure that
individuals and organizations providing homeownership or
rental housing counseling are aware of the certification
requirements and standards of this subsection and of the
training and certification programs under subsection (f).''.
SEC. 136. STUDY OF DEFAULTS AND FORECLOSURES.
The Secretary of Housing and Urban Development shall
conduct an extensive study of the root causes of default and
foreclosure of home loans, using as much empirical data as
are available. The study shall also examine the role of
escrow accounts in helping prime and nonprime borrowers to
avoid defaults and foreclosures. Not later than 12 months
after the date of the enactment of this Act, the Secretary
shall submit to the Congress a preliminary report regarding
the study. Not later than 24 months after such date of
enactment, the Secretary shall submit a final report
regarding the results of the study, which shall include any
recommended legislation relating to the study, and
recommendations for best practices and for a process to
identify populations that need counseling the most.
SEC. 137. DEFINITIONS FOR COUNSELING-RELATED PROGRAMS.
Section 106 of the Housing and Urban Development Act of
1968 (12 U.S.C. 1701x), as amended by the preceding
provisions of this subtitle, is further amended by adding at
the end the following new subsection:
``(h) Definitions.--For purposes of this section:
``(1) Nonprofit organization.--The term `nonprofit
organization' has the meaning given such term in section
104(5) of the Cranston-Gonzalez National Affordable Housing
Act (42 U.S.C. 12704(5)), except that subparagraph (D) of
such section shall not apply for purposes of this section.
``(2) State.--The term `State' means each of the several
States, the Commonwealth of Puerto Rico, the District of
Columbia, the Commonwealth of the Northern Mariana Islands,
Guam, the Virgin Islands, American Samoa, the Trust
Territories of the Pacific, or any other possession of the
United States.
``(3) Unit of general local government.--The term `unit of
general local government' means any city, county, parish,
town, township, borough, village, or other general purpose
political subdivision of a State.''.
SEC. 138. UPDATING AND SIMPLIFICATION OF MORTGAGE INFORMATION
BOOKLET.
Section 5 of the Real Estate Settlement Procedures Act of
1974 (12 U.S.C. 2604) is amended--
(1) in the section heading, by striking ``special'' and
inserting ``home buying'';
(2) by striking subsections (a) and (b) and inserting the
following new subsections:
``(a) Preparation and Distribution.--The Secretary shall
prepare, at least once every 5 years, a booklet to help
consumers applying for federally related mortgage loans to
understand the nature and costs of real estate settlement
services. The Secretary shall prepare the booklet in various
languages and cultural styles, as the Secretary determines to
be appropriate, so that the booklet is understandable and
accessible to homebuyers of different ethnic and cultural
backgrounds. The Secretary shall distribute such booklets to
all lenders that make federally related mortgage loans. The
Secretary shall also distribute to such lenders lists,
organized by location, of homeownership counselors certified
under section 106(e) of the Housing and Urban Development Act
of 1968 (12 U.S.C. 1701x(e)) for use in complying with the
requirement under subsection (c) of this section.
``(b) Contents.--Each booklet shall be in such form and
detail as the Secretary shall prescribe and, in addition to
such other information as the Secretary may provide, shall
include in plain and understandable language the following
information:
``(1) A description and explanation of the nature and
purpose of the costs incident to a real estate settlement or
a federally related mortgage loan. The description and
explanation shall provide general information about the
mortgage process as well as specific information concerning,
at a minimum--
``(A) balloon payments;
``(B) prepayment penalties; and
``(C) the trade-off between closing costs and the interest
rate over the life of the loan.
``(2) An explanation and sample of the uniform settlement
statement required by section 4.
``(3) A list and explanation of lending practices,
including those prohibited by the Truth in Lending Act or
other applicable Federal law, and of other unfair practices
and unreasonable or unnecessary charges to be avoided by the
prospective buyer with respect to a real estate settlement.
``(4) A list and explanation of questions a consumer
obtaining a federally related mortgage loan should ask
regarding the loan, including whether the consumer will have
the ability to repay the loan, whether the consumer
sufficiently shopped for the loan, whether the loan terms
include prepayment penalties or balloon payments, and whether
the loan will benefit the borrower.
``(5) An explanation of the right of rescission as to
certain transactions provided by sections 125 and 129 of the
Truth in Lending Act.
``(6) A brief explanation of the nature of a variable rate
mortgage and a reference to the booklet entitled `Consumer
Handbook on Adjustable Rate Mortgages', published by the
Board of Governors of the Federal Reserve System pursuant to
section 226.19(b)(1) of title 12, Code of Federal
Regulations, or to any suitable substitute of such booklet
that such Board of Governors may subsequently adopt pursuant
to such section.
``(7) A brief explanation of the nature of a home equity
line of credit and a reference to the pamphlet required to be
provided under section 127A of the Truth in Lending Act.
``(8) Information about homeownership counseling services
made available pursuant to section 106(a)(4) of the Housing
and Urban Development Act of 1968 (12 U.S.C. 1701x(a)(4)), a
recommendation that the consumer use such services, and
notification that a list of certified providers of
homeownership counseling in the area, and their contact
information, is available.
``(9) An explanation of the nature and purpose of escrow
accounts when used in connection with loans secured by
residential real estate and the requirements under section 10
of this Act regarding such accounts.
``(10) An explanation of the choices available to buyers of
residential real estate in selecting persons to provide
necessary services incidental to a real estate settlement.
``(11) An explanation of a consumer's responsibilities,
liabilities, and obligations in a mortgage transaction.
``(12) An explanation of the nature and purpose of real
estate appraisals, including the difference between an
appraisal and a home inspection.
``(13) Notice that the Office of Housing of the Department
of Housing and Urban Development has made publicly available
a brochure regarding loan fraud and a World Wide Web address
and toll-free telephone number for obtaining the brochure.
The booklet prepared pursuant to this section shall take into
consideration differences in real estate settlement
procedures that may exist among the several States and
territories of the United States and among separate political
subdivisions within the same State and territory.'';
(3) in subsection (c), by inserting at the end the
following new sentence: ``Each lender shall also include with
the booklet a reasonably complete or updated list of
homeownership counselors who are certified pursuant to
section 106(e) of the Housing and Urban Development Act of
1968 (12 U.S.C. 1701x(e)) and located in the area of the
lender.''; and
(4) in subsection (d), by inserting after the period at the
end of the first sentence the following: ``The lender shall
provide the HUD-issued booklet in the version that is most
appropriate for the person receiving it.''.
[[Page H3228]]
Subtitle C--Combating Mortgage Fraud
SEC. 151. AUTHORIZATION OF APPROPRIATIONS TO COMBAT MORTGAGE
FRAUD.
For fiscal years 2008, 2009, 2010, 2011, and 2012, there
are authorized to be appropriated to the Attorney General a
total of--
(1) $31,250,000 to support the employment of 30 additional
agents of the Federal Bureau of Investigation and 2
additional dedicated prosecutors at the Department of Justice
to coordinate prosecution of mortgage fraud efforts with the
offices of the United States Attorneys; and
(2) $750,000 to support the operations of interagency task
forces of the Federal Bureau of Investigation in the areas
with the 15 highest concentrations of mortgage fraud.
TITLE II--FHA REFORM AND MANUFACTURED HOUSING LOAN INSURANCE
MODERNIZATION
Subtitle A--FHA Reform
SEC. 201. SHORT TITLE.
This subtitle may be cited as the ``Expanding American
Homeownership Act of 2008''.
SEC. 202. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) one of the primary missions of the Federal Housing
Administration (FHA) single family mortgage insurance program
is to reach borrowers who are underserved, or not served, by
the existing conventional mortgage marketplace;
(2) the FHA program has a long history of innovation, which
includes pioneering the 30-year self-amortizing mortgage and
a safe-to-seniors reverse mortgage product, both of which
were once thought too risky to private lenders;
(3) the FHA single family mortgage insurance program
traditionally has been a major provider of mortgage insurance
for home purchases;
(4) the FHA mortgage insurance premium structure, as well
as FHA's product offerings, should be revised to reflect
FHA's enhanced ability to determine risk at the loan level
and to allow FHA to better respond to changes in the mortgage
market;
(5) during past recessions, including the oil-patch
downturns in the mid-1980s, FHA remained a viable credit
enhancer and was therefore instrumental in preventing a more
catastrophic collapse in housing markets and a greater loss
of homeowner equity; and
(6) as housing price appreciation slows and interest rates
rise, many homeowners and prospective homebuyers will need
the less-expensive, safer financing alternative that FHA
mortgage insurance provides.
(b) Purposes.--The purposes of this subtitle are--
(1) to provide flexibility to FHA to allow for the
insurance of housing loans for low- and moderate-income
homebuyers during all economic cycles in the mortgage market;
(2) to modernize the FHA single family mortgage insurance
program by making it more reflective of enhancements to loan-
level risk assessments and changes to the mortgage market;
and
(3) to adjust the loan limits for the single family
mortgage insurance program to reflect rising house prices and
the increased costs associated with new construction.
SEC. 203. MAXIMUM PRINCIPAL LOAN OBLIGATION.
(a) In General.--Section 203(b)(2) of the National Housing
Act (12 U.S.C. 1709(b)(2)(A)) is amended by striking
subparagraph (A) and inserting the following new
subparagraph:
``(A) not to exceed the lesser of--
``(i) in the case of a 1-family residence, 125 percent of
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 determined 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 determined under such section for a
1-family residence; or
``(ii) 175 percent of the dollar amount limitation
determined under such section 305(a)(2)(A) for a residence of
the applicable size (without regard to any authority to
increase such limitations with respect to properties located
in Alaska, Guam, Hawaii, or the Virgin Islands and without
regard to the high-cost area limitation under such section
305(a)(2)(B));
except that the dollar amount limitation in effect under this
subparagraph for any size residence for any area 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 amount limitation determined
under such section 305(a)(2) for a residence of the
applicable size; and except that, if the Secretary determines
that market conditions warrant such an increase, the
Secretary may, for such period as the Secretary considers
appropriate, increase the maximum dollar amount limitation
determined pursuant to the preceding provisions of this
subparagraph with respect to any particular size or sizes of
residences, or with respect to residences located in any
particular area or areas, to an amount that does not exceed
the maximum dollar amount then otherwise in effect pursuant
to the preceding provisions of this subparagraph for such
size residence, or for such area (if applicable), by not more
than $100,000; and''.
(b) Treatment of Temporary Loan Limit Increase.--Subsection
(a) and the amendment made by such subsection may not be
construed to in any way affect the effectiveness of section
202 of the Economic Stimulus Act of 2008 (Public Law 110-185;
122 Stat. 620).
SEC. 204. EXTENSION OF MORTGAGE TERM.
Paragraph (3) of section 203(b) of the National Housing Act
(12 U.S.C. 1709(b)(3)) is amended--
(1) by striking ``thirty-five years'' and inserting ``forty
years''; and
(2) by striking ``(or thirty years if such mortgage is not
approved for insurance prior to construction)''.
SEC. 205. DOWNPAYMENT SIMPLIFICATION.
Section 203(b) of the National Housing Act (12 U.S.C.
1709(b)) is amended--
(1) in paragraph (2)--
(A) by striking subparagraph (B) and inserting the
following new subparagraph:
``(B) not to exceed an amount equal to the sum of--
``(i) the amount of the mortgage premium paid at the time
the mortgage is insured; and
``(ii) 97.75 percent of the appraised value of the
property.'';
(B) in the matter after and below subparagraph (B), by
striking the second sentence (relating to a definition of
``average closing cost'') and all that follows through
``title 38, United States Code.''; and
(C) by striking the last undesignated paragraph (relating
to counseling with respect to the responsibilities and
financial management involved in homeownership); and
(2) in paragraph (9)--
(A) by striking the paragraph designation and all that
follows through ``Provided further, That for'' and inserting
the following:
``(9) Be executed by a mortgagor who shall have paid on
account of the property, in cash or its equivalent, at least
3 percent of the Secretary's estimate of the cost of
acquisition (excluding the mortgage insurance premium paid at
the time the mortgage is insured). For''; and
(B) by inserting after the period at the end the following:
``For purposes of this paragraph, the Secretary shall
consider as cash or its equivalent any amounts gifted by a
family member (as such term is defined in section 201), the
mortgagor's employer or labor union, or a qualified
homeownership assistance entity, but only if there is no
obligation on the part of the mortgagor to repay the gift:
For purposes of the preceding sentence, the term `qualified
homeownership assistance entity' means any governmental
agency or charity that has a program to provide homeownership
assistance to low- and moderate-income families or first-time
home buyers, or any private nonprofit organization that has
such a program and evidences sufficient fiscal soundness to
protect the fiscal integrity of the Mutual Mortgage Insurance
Fund by maintaining a minimum net worth of $4,000,000 of
acceptable assets.''.
SEC. 206. MORTGAGE INSURANCE PREMIUMS FOR QUALIFIED
HOMEOWNERSHIP ASSISTANCE ENTITIES AND HIGHER-
RISK BORROWERS.
Paragraph (2) of section 203(c) of the National Housing Act
(12 U.S.C. 1709(c)(2)) is amended--
(1) in subparagraph (A), in the matter preceding
subparagraph (A), by striking the first comma after ``section
234(c)'';
(2) in subparagraph (A), by inserting after the period at
the end of the second sentence the following: ``In the case
of a mortgage for which any amounts gifted by a qualified
homeownership assistance entity (as such term is defined in
paragraph (9) of subsection (b)) that is a private nonprofit
organization are treated as cash or its equivalent for
purposes of meeting the 3 percent requirement under such
paragraph, the premium payment under this subparagraph shall
not exceed 3.0 percent of the amount of the original insured
principal obligation of the mortgage.''; and
(3) by adding at the end the following new subparagraph:
``(C) Higher-risk borrowers.--The Secretary shall establish
underwriting standards that provide for insurance under this
section of mortgages described in the matter in this
paragraph preceding subparagraph (A) for which the mortgagor
has a credit score equivalent to a FICO score of less than
560, and may insure, and make commitments to insure, such
mortgages. Such underwriting standards shall include
establishing and collecting premium payments that comply with
the requirements of this paragraph, except that
notwithstanding subparagraph (A), the single premium payment
collected at the time of insurance may be established in an
amount that does not exceed 3.0 percent of the amount of the
original insured principal obligation of the mortgage.''.
SEC. 207. RISK-BASED MORTGAGE INSURANCE PREMIUMS.
Section 203(c) of the National Housing Act (12 U.S.C.
1709(c)), as amended by the preceding provisions of this
subtitle, is further amended by adding at the end the
following new paragraphs:
``(4) Flexible risk-based premiums.--In the case of a
mortgage referred to in paragraph (2)(C) or a mortgage
described in the third sentence of subparagraph (A) of
paragraph (2) (relating to mortgages for which amounts are
gifted by a nonprofit qualified homeownership assistance
entity), for which the loan application is received by the
mortgagee on or after the date of the enactment of the
Expanding American Homeownership Act of 2008:
``(A) In general.--The Secretary may establish a mortgage
insurance premium structure involving a single premium
payment collected prior to the insurance of the mortgage or
annual payments (which may be collected on a periodic basis),
or both, subject
[[Page H3229]]
to the requirements of subparagraph (B) and paragraph (5).
Under such structure, the rate of premiums for such a
mortgage may vary according to the credit risk associated
with the mortgage and the rate of any annual premium for such
a mortgage may vary during the mortgage term as long as the
basis for determining the variable rate is established before
the execution of the mortgage. The Secretary may change a
premium structure established under this subclause but only
to the extent that such change is not applied to any mortgage
already executed.
``(B) Establishment and alteration of premium structure.--A
premium structure shall be established or changed under
subparagraph (A) only by providing notice to mortgagees and
to the Congress, at least 30 days before the premium
structure is established or changed.
``(C) Annual report regarding premiums.--The Secretary
shall submit a report to the Congress annually setting forth
the rate structures and rates established and altered
pursuant to this paragraph during the preceding 12-month
period and describing how such rates were determined.
``(5) Considerations for premium structure.--When
establishing premiums for mortgages referred to in paragraph
(2)(C), establishing premiums pursuant to paragraph (3),
establishing a premium structure under paragraph (4), and
when changing such a premium structure, the Secretary shall
consider the following:
``(A) The effect of the proposed premiums or structure on
the Secretary's ability to meet the operational goals of the
Mutual Mortgage Insurance Fund as provided in section 202(a).
``(B) Underwriting variables.
``(C) The extent to which new pricing under the proposed
premiums or structure has potential for acceptance in the
private market.
``(D) The administrative capability of the Secretary to
administer the proposed premiums or structure.
``(E) The effect of the proposed premiums or structure on
the Secretary's ability to maintain the availability of
mortgage credit and provide stability to mortgage markets.
``(6) Authority to base premium prices on product risk.--
``(A) Authority.--In establishing premium rates under
paragraphs (2), (3), and (4), the Secretary may provide for
variations in such rates according to the credit risk
associated with the type of mortgage product that is being
insured under this title, which may include providing that
premium rates differ between fixed-rate mortgages and
adjustable-rate mortgages insured pursuant to section 251,
between mortgages insured pursuant to section 203(b) and
mortgages for condominiums insured pursuant to section 234,
and between such other products as the Secretary considers
appropriate.
``(B) Limitation.--Subparagraph (A) may not be construed to
authorize the Secretary to establish, for any mortgage
product, any mortgage insurance premium rate that does not
comply with the requirements and limitations under paragraphs
(2) through (5).''.
SEC. 208. PAYMENT INCENTIVES FOR HIGHER-RISK BORROWERS.
Section 203(c) of the National Housing Act (12 U.S.C.
1709(c)), as amended by the preceding provisions of this
subtitle, is further amended by adding at the end the
following new paragraph:
``(7) Payment incentives.--
``(A) Authority.--With respect to mortgages referred to in
paragraph (2)(C):
``(i) Discretionary 3-year payment incentive.--The
Secretary may provide, in the discretion of the Secretary,
that the payment incentive under subparagraph (B) shall apply
upon the expiration of the 3-year period beginning upon the
time of insurance of such a mortgage.
``(ii) Mandatory 5-year payment incentive.--The Secretary
shall provide that the payment incentive under subparagraph
(B) applies upon the expiration of the 5-year period
beginning upon the time of insurance of such a mortgage.
``(B) Payment incentive.--In the case of any mortgage to
which the payment incentive under this subparagraph applies,
if, during the period referred to in clause (i) or (ii) of
subparagraph (A), as applicable, all mortgage insurance
premiums for such mortgage have been paid on a timely basis,
upon the expiration of such period the Secretary shall--
``(i) reduce the amount of the annual premium payments
otherwise due thereafter under such mortgage to an amount
that does not exceed the amount of the annual premium payable
at the time of insurance of the mortgage on a mortgage of the
same product type having the same terms, but for which the
mortgagor has a credit score equivalent to a FICO score of
560 or more; and
``(ii) refund to the mortgagor, upon payment in full of the
obligation of the mortgage, any amount by which the single
premium payment for such mortgage collected at the time of
insurance exceeded the amount of the single premium payment
chargeable under paragraph (2)(A) at the time of insurance
for a mortgage of the same product type having the same
terms, but for which the mortgagor has a credit score
equivalent to a FICO score of 560 or more.''.
SEC. 209. PROTECTIONS FOR HIGHER-RISK BORROWERS.
Section 203(b) of the National Housing Act (12 U.S.C.
1709(b)) is amended by adding at the end the following new
paragraph:
``(10) Protections for higher-risk borrowers.--Except as
otherwise specifically provided in this paragraph, in the
case of any mortgage referred to in paragraph (2)(C) of
subsection (c), the following requirements shall apply:
``(A) Disclosures.--
``(i) Required disclosures.--In addition to any disclosures
that are otherwise required by law or by the Secretary for
single family mortgages, the mortgagee shall disclose to the
mortgagor the following information:
``(I) At application.--At the time of application for the
loan involved in the mortgage, a list of counseling agencies,
approved by the Secretary, in the area of the applicant.
``(II) At execution.--At the time of entering into the
mortgage--
``(aa) the terms of the mandatory 5-year payment incentive
required under subsection (c)(7)(A)(ii); and
``(bb) a statement that the mortgagor has a right under
contract to loss mitigation.
``(III) Other information.--Any other additional
information that the Secretary determines is appropriate to
ensure that the mortgagor has received timely and accurate
information about the program under paragraph (2)(C) of
subsection (c).
``(ii) Penalties for failure to provide required
disclosures.--The Secretary may establish and impose
appropriate penalties for failure of a mortgagee to provide
any disclosure required under clause (i).
``(iii) No private right of action.--This subparagraph
shall not create any private right of action on behalf of the
mortgagor.
``(B) Counseling.--
``(i) Requirement.--The Secretary shall require that the
mortgagor shall have received counseling that complies with
the requirements of this subparagraph.
``(ii) Terms of counseling.--Counseling under this
subparagraph shall be provided--
``(I) prior to closing for the loan involved in the
mortgage;
``(II) by a third party (other than the mortgagee) who is
approved by the Secretary, with respect to the
responsibilities and financial management involved in
homeownership;
``(III) on an individual basis to the mortgagor by a
representative of the approved third-party counseling entity;
and
``(IV) in person, to the maximum extent possible.
``(iii) 2- and 3-family residences.--In the case of a
mortgage involving a 2- or 3-family residence, counseling
under this subparagraph shall include (in addition to the
information required under clause (iii)) information
regarding real estate property management.
``(C) Notice of foreclosure prevention counseling
availability.--
``(i) Written agreement.--To be eligible for insurance
under this subsection, the mortgagee shall provide the
mortgagor, at the time of the execution of the mortgage, a
written agreement which shall be signed by the mortgagor and
under which the mortgagee shall provide notice described in
clause (ii) to a housing counseling entity that has agreed to
provide the notice and counseling required under clause (iii)
and is approved by the Secretary.
``(ii) Notice to counseling agency.--The notice described
in this clause, with respect to a mortgage, is notice,
provided at the earliest time practicable after the mortgagor
becomes 60 days delinquent with respect to any payment due
under the mortgage, that the mortgagor is so delinquent and
of how to contact the mortgagor. Such notice may only be
provided once with respect to each delinquency period for a
mortgage.
``(iii) Notice to mortgagor.--Upon notice from a mortgagee
that a mortgagor is 60 days delinquent with respect to
payments due under the mortgage, the housing counseling
entity shall at the earliest time practicable notify the
mortgagor of such delinquency, that the entity makes
available foreclosure prevention counseling that may assist
the mortgagor in resolving the delinquency, and of how to
contact the entity to arrange for such counseling.
``(iv) Ability to cure.--Failure to provide the written
agreement required under clause (i) may be corrected by
sending such agreement to the mortgagor not later than the
earliest time practicable after the mortgagor first becomes
60 days delinquent with respect to payments due under the
mortgage. Insurance provided under this subsection may not be
terminated and penalties for such failure may not be
prospectively or retroactively imposed if such failure is
corrected in accordance with this clause.
``(v) Penalties for failure to provide agreement.--The
Secretary may establish and impose appropriate penalties for
failure of a mortgagee to provide the written agreement
required under clause (i).
``(vi) Limitation on liability of mortgagee.--A mortgagee
shall not incur any liability or penalties for any failure of
a housing counseling entity to provide notice under clause
(iii).
``(vii) No private right of action.--This subparagraph
shall not create any private right of action on behalf of the
mortgagor.
``(viii) Delinquency period.--For purposes of this
subparagraph, the term `delinquency period' means, with
respect to a mortgage, a period that begins upon the
mortgagor becoming delinquent with respect to payments due
under the mortgage and ends upon the first subsequent
occurrence of such payments under the mortgage becoming
current or the property subject to the mortgage being
foreclosed or otherwise disposed of.''.
[[Page H3230]]
SEC. 210. REFINANCING MORTGAGES.
Section 203 of the National Housing Act (12 U.S.C. 1709) is
amended by inserting after subsection (k) the following new
subsection:
``(l) Refinancing Mortgages.--
``(1) Establishment of underwriting standards.--The
Secretary shall establish underwriting standards that provide
for insurance under this title of mortgage loans, and take
actions to facilitate the availability of mortgage loans
insured under this title, for qualified borrowers that are
made for the purpose of paying or prepaying outstanding
obligations under existing mortgages for borrowers that--
``(A) have existing mortgages with adverse terms or rates,
or
``(B) do not have access to mortgages at reasonable rates
and terms for such refinancings due to adverse market
conditions.
``(2) Insurance of mortgages to borrowers in default or at
risk of default.--In facilitating insurance for such
mortgages, the Secretary may insure mortgages to borrowers
who are, currently in default or at imminent risk of being in
default, but only if such loans meet reasonable underwriting
standards established by the Secretary.''.
SEC. 211. ANNUAL REPORTS ON NEW PROGRAMS AND LOSS MITIGATION.
Section 540(b)(2) of the National Housing Act (12 U.S.C.
1735f-18(b)(2)) is amended, by adding at the end the
following new subparagraphs:
``(C) The rates of default and foreclosure for the
applicable collection period for mortgages insured pursuant
to the program for mortgage insurance under paragraph (2)(C)
of section 203(c).
``(D) Actions taken by the Secretary during the applicable
collection period with respect to loss mitigation on
mortgages insured pursuant to section 203.''.
SEC. 212. INSURANCE FOR SINGLE FAMILY HOMES WITH LICENSED
CHILD CARE FACILITIES.
(a) Definition of Child Care Facility.--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 `child care facility' means a facility
that--
``(A) has as its purpose the care of children who are less
than 12 years of age; and
``(B) is licensed or regulated by the State in which it is
located (or, if there is no State law providing for such
licensing and regulation by the State, by the municipality or
other political subdivision in which the facility is
located).
Such term does not include facilities for school-age children
primarily for use during normal school hours.''.
(b) Increase in Maximum Mortgage Amount Limitation.--
Paragraph (2) of section 203(b) of the National Housing Act
(12 U.S.C. 1709(b)(2)), as amended by the preceding
provisions of this subtitle, is further amended by adding at
end the following new undesignated paragraph:
``Notwithstanding any other provision of this paragraph,
the amount that may be insured under this section may be
increased by up to 25 percent if such increase is necessary
to account for the increased cost of the residence due to an
increased need of space in the residence for locating and
operating a child care facility (as such term is defined in
section 201) within the residence, but only if a valid
license or certificate of compliance with regulations
described in section 201(g)(2) has been issued for such
facility as of the date of the execution of the mortgage, and
only if such increase in the amount insured is proportional
to the amount of space of such residence that will be used
for such facility.''.
SEC. 213. 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. 214. 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, and redesignating such subsection as subsection (e).
SEC. 215. INSURANCE OF CONDOMINIUMS AND MANUFACTURED HOUSING.
(a) In General.--Section 234 of the National Housing Act
(12 U.S.C. 1715y) is amended--
(1) in subsection (c)--
(A) in the first sentence--
(i) by striking ``and'' before ``(2)''; and
(ii) 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
(B) in clause (B) of the third sentence, by striking
``thirty-five years'' and inserting ``forty years''; 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), as amended by the preceding
provisions of this subtitle, is further amended by adding at
the end the following new subsection:
``(h) 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. 216. 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
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 upon the expiration of the 90-day period beginning
on the date of the enactment of the Expanding American
Homeownership Act of 2008, whichever is later.
``(6) Adjustment of premiums.--If, pursuant to the
independent actuarial study of the Fund required under
paragraph (5), the Secretary determines that the Fund is not
meeting the operational goals established under paragraph (8)
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 section 203 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 charge borrowers under loans that are obligations
of the Fund an appropriate premium for the risk that such
loans pose to the Fund;
``(B) to minimize the default risk to the Fund and to
homeowners;
``(C) to curtail the impact of adverse selection on the
Fund; and
[[Page H3231]]
``(D) 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 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. 217. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.
(a) Hawaiian Home Lands.--Section 247(c) of the National
Housing Act (12 U.S.C. 1715z-12) 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) is amended--
(1) by striking ``General Insurance Fund'' the first place
it appears and all that follows 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. 218. 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. 219. 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 (b)(4), by striking subparagraph (B) and
inserting the following new subparagraph:
``(B) under a lease that has a term that ends no earlier
than the minimum number of years, as specified by the
Secretary, beyond the actuarial life expectancy of the
mortgagor or comortgagor, whichever is the later date.''.
(3) in the second sentence of subsection (g), by striking
``the maximum dollar amount established under section
203(b)(2)'' and all that follows through ``located'' and
inserting ``132 percent of the dollar amount limitation
determined under section 305(a)(2)(A) of the Federal Home
Loan Mortgage Corporation Act for a 1-family residence
(without regard to any authority to increase such limitations
with respect to properties located in Alaska, Guam, Hawaii,
or the Virgin Islands and without regard to the high-cost
area limitation under such section 305(a)(2)(B))'';
(4) in subsection (i)(1)(C), by striking ``limitations''
and inserting ``limitation''; and
(5) by adding at the end the following new subsection:
``(o) Authority to Insure Home Purchase Mortgages.--
``(1) In general.--Notwithstanding any other provision in
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
primary purpose of the home equity conversion mortgage is to
enable an elderly mortgagor to purchase a 1- to 4-family
dwelling in which the mortgagor will occupy or occupies one
of the units.
``(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
limitation under subsection (g) of this section on the
maximum amount of the benefits of insurance under this
section.''.
(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) Prohibition on Required Purchase of an Annuity.--
Section 255 of the National Housing Act of 1937 (12 U.S.C.
1715z-20) is amended--
(1) by striking subparagraph (B) of subsection (d)(2) and
inserting the following new subparagraph:
``(B) has received adequate counseling by a third party
(other than a reverse mortgage lender, servicer or investor,
or an entity engaged in the sale of annuities, investments,
long-term care insurance, or any other type of financial or
insurance product) as provided in subsection (f);'';
(2) by striking the first sentence of subsection (f) and
inserting the following new sentence: ``The Secretary shall
provide or cause to be provided and paid for by entities
other than a reverse mortgage lender, servicer or investor,
or an entity engaged in the sale of annuities, investments,
long-term care insurance, or any other type of financial or
insurance product the information required in subsection
(d)(2)(B).''; and
(3) by striking subsections (l) and (m) and inserting the
following new subsection:
``(l) Regulations to Protect Elderly Homeowners.--
``(1) In general.--Not later than 6 months after the date
of the enactment of the Expanding American Homeownership Act
of 2008, the Secretary shall, in consultation with other
relevant Federal departments and agencies, prescribe
regulations to help protect elderly homeowners from the
marketing of financial and insurance products not in the
interest of such homeowners, including the marketing or sale
of an annuity as a condition of obtaining any home equity
conversion mortgage.
``(2) Consultation.--In developing the regulations required
under paragraph (1), the Secretary shall consult with
consumer advocates (including recognized experts in consumer
protection), industry representatives, representatives of
counseling organizations, and other interested parties.''.
(d) 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) be equal to 2.0 percent of the maximum claim amount
of the mortgage up to a maximum claim amount of $200,000 plus
1 percent of any portion of the maximum claim amount that is
greater than $200,000, unless adjusted thereafter on the
basis of an analysis of (A) costs to mortgagors, and (B) the
impact 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 or to mortgage brokers;
``(5) apply beginning upon the date that the maximum dollar
amount limitation on the benefits of insurance under this
section is first increased pursuant to the amendments made by
section 219(a)(3) of the Expanding American Homeownership Act
of 2008; and
``(6) be subject to a maximum origination fee of $6,000,
except that such maximum limit shall be adjusted in
accordance with the annual percentage increase in the
Consumer Price Index of the Bureau of Labor Statistics of the
Department of Labor in increments of $500 only when the
percentage increase in such index, when applied to the
maximum origination fee, produce dollar increases that exceed
$500.''.
(e) Study Regarding Mortgage Insurance Premiums.--The
Secretary of Housing and Urban Development shall conduct a
study regarding mortgage insurance premiums charged under the
program under section 255 of the National Housing Act (12
U.S.C. 1715z-20) for insurance of home equity conversion
mortgages to analyze and determine the effects of reducing
the amounts of such premiums from the amounts charged as of
the date of the enactment of this Act on: (1) costs to
mortgagors; and (2) the financial soundness of the program.
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 setting forth
the results and conclusions of the study.
(f) Purchase Authority of Fannie Mae and Freddie Mac.--
(1) Fannie mae.--Section 302(b) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1717(b)) is
amended by adding at the end the following:
``(7) The corporation is authorized to purchase, service,
sell, lend on the security of, and otherwise deal in any
mortgage insured
[[Page H3232]]
under section 255 of the National Housing Act (12 U.S.C.
1715z-20), notwithstanding the limitations under paragraph
(2) on the maximum original principal obligations of
mortgages.''.
(2) Freddie mac.--Section 305(a) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1454(a)) is amended by
adding at the end the following:
``(6) The Corporation is authorized to purchase, service,
sell, lend on the security of, and otherwise deal in any
mortgage insured under section 255 of the National Housing
Act (12 U.S.C. 1715z-20), notwithstanding the limitations
under paragraph (2) on the maximum original principal
obligations of mortgages.''.
SEC. 220. STUDY ON PARTICIPATION OF MORTGAGE BROKERS AND
CORRESPONDENT LENDERS.
(a) Study.--The Comptroller General of the United States
shall conduct a study, which shall be completed not later
than the expiration of the 12-month period beginning on the
date of the enactment of this Act, which shall analyze and
determine--
(1) the extent to which the financial audit and net worth
requirements impede participation by mortgage brokers and
correspondent lenders in the mortgage insurance programs
under the National Housing Act, as measured by the number and
value of such insured mortgages, disaggregated by the States
in which the properties subject to such mortgages are
located;
(2) the extent and effectiveness of the financial audit and
net worth requirements in protecting the Mutual Mortgage
Insurance Fund;
(3) the extent and effectiveness of the supervision and
quality control enforcement, by the Secretary, of mortgagees
in the FHA program, separate from the financial audit and net
worth requirements for participation, in protecting the
Mutual Mortgage Insurance Fund;
(4) the extent to which allowing a mortgage broker to
secure a surety bond in lieu of the financial audit and net
worth requirements would increase participation by mortgage
brokers and correspondent lenders in the mortgage insurance
programs under the National Housing Act;
(5) the extent to which allowing a mortgage broker to
secure a surety bond in lieu of the financial audit and net
worth requirements would protect the Mutual Mortgage
Insurance Fund; and
(6) the potential impact of such changes on the costs
incurred by the Secretary of Housing and Urban Development in
administering the mortgage insurance programs under such Act.
(b) GAO Report.--Not later than the expiration of the 12-
month period beginning on the date of the enactment of this
Act, the Comptroller General shall submit a report to the
Congress and the Secretary of Housing and Urban Development
setting forth the results and conclusions of the study
conducted pursuant to subsection (a).
(c) HUD Report.--Not later than the expiration of the 18-
month period beginning upon the date of the enactment of this
Act, the Secretary of Housing and Urban Development may
submit a report to the Congress making recommendations
regarding any changes in requirements for participation of
mortgage brokers and correspondent lenders in the mortgage
insurance programs under the National Housing Act arising
from a review of the study conducted pursuant to subsection
(a).
SEC. 221. CONFORMING LOAN LIMIT IN DISASTER AREAS.
Section 203(h) of the National Housing Act (12 U.S.C. 1709)
is amended--
(1) by inserting after ``property'' the following: ``plus
any initial service charges, appraisal, inspection and other
fees in connection with the mortgage as approved by the
Secretary,'';
(2) by striking the second sentence (as added by chapter 7
of the Emergency Supplemental Appropriations Act of 1994
(Public Law 103-211; 108 Stat. 12)); and
(3) by adding at the end the following new sentence: ``In
any case in which the single family residence to be insured
under this subsection is within a jurisdiction in which the
President has declared a major disaster to have occurred, the
Secretary is authorized, for a temporary period not to exceed
36 months from the date of such Presidential declaration, to
enter into agreements to insure a mortgage which involves a
principal obligation of up to 100 percent of the dollar
limitation determined under section 305(a)(2) of the Federal
Home Loan Mortgage Corporation Act for a single family
residence, and not in excess of 100 percent of the appraised
value of the property plus any initial service charges,
appraisal, inspection and other fees in connection with the
mortgage as approved by the Secretary.''.
SEC. 222. FAILURE TO PAY AMOUNTS FROM ESCROW ACCOUNTS FOR
SINGLE FAMILY MORTGAGES.
(a) Penalties.--Section 536 of the National Housing Act (12
U.S.C. 1735f-14) is amended--
(1) in subsection (a)(1), by inserting ``servicers
(including escrow account servicers),'' after
``appraisers,'';
(2) in subsection (b)(1)--
(A) in the matter preceding subparagraph (A), by inserting
``or other participant referred to in subsection (a),'' after
``lender,''; and
(B) by inserting at the end the following new
subparagraphs:
``(K) In the case of a mortgage for a 1- to 4-family
residence insured under title II that requires the mortgagor
to make payments to the mortgagee or other servicer of the
mortgage for deposit into an escrow account for the purpose
of assuring payment of taxes, insurance premiums, and other
charges with respect to the property, failure on the part of
the servicer to make any such payment from the escrow account
by the deadline to avoid a penalty with respect to such
payment provided for in the mortgage, unless the servicer was
not provided notice of such deadline.
``(L) In the case of any failure to make any payment as
described in subparagraph (K), submitting any information to
a consumer reporting agency (as such term is defined in
section 603(f) of the Fair Credit Reporting Act (15 U.S.C.
1681a(f))) regarding such failure that is adverse to the
credit rating or interest of the mortgagor.''; and
(3) in subsection (c)(3), by adding at the end the
following: ``In the case of any failure to make a payment
described in subsection (b)(1)(K) for which the servicer
fails to reimburse the mortgagor (A) before the expiration of
the 60-day period beginning on the deadline to avoid a
penalty with respect to such payment, in the sum of the
amount not paid from the escrow account by such deadline and
the amount of any penalties accruing to the mortgagor that
are attributable to such failure, or (B) in the amount of any
attorneys fees incurred by the mortgagor and attributable to
such failure, the Secretary shall increase the amount of the
penalty under subsection (a) for any such failure to
reimburse, unless the Secretary determines there are
mitigating circumstances.''.
(b) Prohibition on Submission of Information by HUD.--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. PROHIBITION REGARDING FAILURE ON PART OF SERVICER
TO MAKE ESCROW PAYMENTS.
``In the case of any failure to make any payment as
described in section 536(b)(1)(K), the Secretary may not
submit any information to a consumer reporting agency (as
such term is defined in section 603(f) of the Fair Credit
Reporting Act (15 U.S.C. 1681a(f))) regarding such failure
that is adverse to the credit rating or interest of the
mortgagor.''.
SEC. 223. ACCEPTABLE IDENTIFICATION FOR FHA MORTGAGORS.
(a) In General.--Title II of the National Housing Act is
amended by inserting after section 209 (12 U.S.C. 1715) the
following new section:
``SEC. 210. FORMS OF ACCEPTABLE IDENTIFICATION.
``The Secretary may not insure a mortgage under any
provision of this title unless the mortgagor under the
mortgage provides personal identification in one of the
following forms:
``(1) A valid social security number verified in accordance
with paragraph 3-1 C of chapter 3 of HUD Handbook 4155.1 REV-
5.
``(2) A driver's license or identification card issued by a
State in the case of a State that is in compliance with title
II of the REAL ID Act of 2005 (title II of division B of
Public Law 109-13; 49 U.S.C. 30301 note).
``(3) A passport issued by the United States or a foreign
government.
``(4) A photo identification card issued by the Secretary
of Homeland Security (acting through the Director of the
United States Citizenship and Immigration Services).''.
(b) Effective Date.--The requirements of section 210 of the
National Housing Act (as added by subsection (a) of this
section) shall take effect 6 months after the date of the
enactment of this Act.
SEC. 224. 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.), as amended by the preceding
provisions of this subtitle, is further amended by adding at
the end the following new section:
``SEC. 258. 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--
``(1) to first-time homebuyers; or
``(2) metropolitan statistical areas significantly impacted
by subprime lending.
``(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 Expanding
American Homeownership Act of 2008, 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.''.
[[Page H3233]]
(b) GAO Report.--Not later than the expiration of the 4-
year period beginning on the date that the Secretary of
Housing and Urban Development first insures any mortgage
pursuant to the automated process established under pilot
program under section 258 of the National Housing Act (as
added by the amendment made by subsection (a) of this
section), the Comptroller General of the United States shall
submit to the Congress a report identifying the number of
additional mortgagors served using such automated process 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. 225. SENSE OF CONGRESS REGARDING TECHNOLOGY FOR
FINANCIAL SYSTEMS.
(a) Congressional Findings.--The Congress finds the
following:
(1) The Government Accountability Office has cited the FHA
single family housing mortgage insurance program as a ``high-
risk'' program, with a primary reason being non-integrated
and out-dated financial management systems.
(2) The ``Audit of the Federal Housing Administration's
Financial Statements for Fiscal Years 2004 and 2003'',
conducted by the Inspector General of the Department of
Housing and Urban Development reported as a material weakness
that ``HUD/FHA's automated data processing [ADP] system
environment must be enhanced to more effectively support
FHA's business and budget processes''.
(3) Existing technology systems for the FHA program have
not been updated to meet the latest standards of the Mortgage
Industry Standards Maintenance Organization and have numerous
deficiencies that lenders have outlined.
(4) Improvements to technology used in the FHA program
will--
(A) allow the FHA program to improve the management of the
FHA portfolio, garner greater efficiencies in its operations,
and lower costs across the program;
(B) result in efficiencies and lower costs for lenders
participating in the program, allowing them to better use the
FHA products in extending homeownership opportunities to
higher credit risk or lower-income families, in a sound
manner.
(5) The Mutual Mortgage Insurance Fund operates without
cost to the taxpayers and generates revenues for the Federal
Government.
(b) Sense of Congress.--It is the sense of the Congress
that--
(1) the Secretary of Housing and Urban Development should
use a portion of the funds received from premiums paid for
FHA single family housing mortgage insurance that are in
excess of the amounts paid out in claims to substantially
increase the funding for technology used in such FHA program;
(2) the goal of this investment should be to bring the
technology used in such FHA program to the level and
sophistication of the technology used in the conventional
mortgage lending market, or to exceed such level; and
(3) the Secretary of Housing and Urban Development should
report to the Congress not later than 180 days after the date
of the enactment of this Act regarding the progress the
Department is making toward such goal and if progress is not
sufficient, the resources needed to make greater progress.
SEC. 226. CLARIFICATION OF DISPOSITION OF CERTAIN PROPERTIES.
Notwithstanding any other provision of law, subtitle A of
title II of the Deficit Reduction Act of 2005 (12 U.S.C.
1701z-11 note) and the amendments made by such title shall
not apply to any transaction regarding a multifamily real
property for which--
(1) the Secretary of Housing and Urban Development has
received, before the date of the enactment of such Act,
written expressions of interest in purchasing the property
from both a city government and the housing commission of
such city;
(2) after such receipt, the Secretary acquires title to the
property at a foreclosure sale; and
(3) such city government and housing commission have
resolved a previous disagreement with respect to the
disposition of the property.
SEC. 227. VALUATION OF MULTIFAMILY PROPERTIES IN
NONCOMPETITIVE SALES BY HUD TO STATES AND
LOCALITIES.
Subtitle A of title II of the Deficit Reduction Act of 2005
(Public Law 109-171; 120 Stat. 7) is amended by adding at the
end the following new section:
``SEC. 2004. VALUATION OF MULTIFAMILY PROPERTIES IN
NONCOMPETITIVE SALES BY HUD TO STATES AND
LOCALITIES.
`` `Notwithstanding any other provision of law, in
determining the market value of any multifamily real property
or multifamily loan for any noncompetitive sale to a State or
local government entity occurring during fiscal year 2008,
the Secretary shall consider, but not be limited to, industry
standard appraisal practices, including the cost of repairs
needed to bring the property at least to minimum State and
local code standards and of maintaining the existing
affordability restrictions imposed by the Secretary on the
multifamily real property or multifamily loan.'.''.
SEC. 228. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.
Notwithstanding any other provision of law, including any
provision of this subtitle and any amendment made by this
subtitle--
(1) the premiums charged for mortgage insurance under any
program 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 by rule making in accordance with the procedures
under section 553 of title 5, United States Code
(notwithstanding subsections (a)(2), (b)(B), and (d)(3) of
such section).
SEC. 229. CIVIL MONEY PENALTIES FOR IMPROPERLY INFLUENCING
APPRAISALS.
Paragraph (2) of section 536(b) of the National Housing Act
(12 U.S.C. 1735f-14(b)(2)) is amended--
(1) in subparagraph (B), by striking ``or'' at the end;
(2) in subparagraph (C), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following new subparagraph:
``(D) in the case of an insured mortgage under title II for
a 1- to 4-family residence, compensating, instructing,
inducing, coercing, or intimidating any person who conducts
an appraisal of the property in connection with such
mortgage, or attempting to compensate, instruct, induce,
coerce, or intimidate such a person, for the purpose of
causing the appraised value assigned to the property under
the appraisal to be based on any other factor other than the
independent judgment of such person exercised in accordance
with applicable professional standards.''.
SEC. 230. MORTGAGE INSURANCE PREMIUM REFUNDS.
(a) Authority.--The Secretary of Housing and Urban
Development shall, to the extent that amounts are made
available pursuant to subsection (c), provide refunds of
unearned premium charges paid, at the time of insurance, for
mortgage insurance under title II of the National Housing Act
(12 U.S.C. 1707 et seq.) to or on behalf of mortgagors under
mortgages described in subsection (b).
(b) Eligible Mortgages.--A mortgage described in this
section is a mortgage on a one- to four-family dwelling
that--
(1) was insured under title II of the National Housing Act
(12 U.S.C. 1707 et seq.);
(2) is otherwise eligible, under the last sentence of
subparagraph (A) of section 203(c)(2) of such Act (12 U.S.C.
1709(c)(2)(A)), for a refund of all unearned premium charges
paid on the mortgage pursuant to such subparagraph, except
that the mortgage--
(A) was closed before December 8, 2004; and
(B) was endorsed on or after such date.
(c) Authorization of Appropriations.--There is authorized
to be appropriated for each fiscal year such sums as may be
necessary to provide refunds of unearned mortgage insurance
premiums pursuant to this section.
SEC. 231. SAVINGS PROVISION.
Any mortgage insured under title II of the National Housing
Act before the date of enactment of this Act 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 Act.
SEC. 232. IMPLEMENTATION.
Except as provided in section 223(b), 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 subtitle. The notice shall
take effect upon issuance.
Subtitle B--FHA Manufactured Housing Loan Insurance Modernization
SECTION 251. SHORT TITLE.
This subtitle may be cited as the ``FHA Manufactured
Housing Loan Modernization Act of 2008''.
SEC. 252. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) manufactured housing plays a vital role in providing
housing for low- and moderate-income families in the United
States;
(2) the FHA title I insurance program for manufactured home
loans traditionally has been a major provider of mortgage
insurance for home-only transactions;
(3) the manufactured housing market is in the midst of a
prolonged downturn which has resulted in a severe contraction
of traditional sources of private lending for manufactured
home purchases;
(4) during past downturns the FHA title I insurance program
for manufactured homes has filled the lending void by
providing stability until the private markets could recover;
(5) in 1992, during the manufactured housing industry's
last major recession, over 30,000 manufactured home loans
were insured under title I;
(6) in 2006, fewer than 1,500 manufactured housing loans
were insured under title I;
(7) the loan limits for title I manufactured housing loans
have not been adjusted for inflation since 1992; and
(8) these problems with the title I program have resulted
in an atrophied market for manufactured housing loans,
leaving American families who have the most difficulty
[[Page H3234]]
achieving homeownership without adequate financing options
for home-only manufactured home purchases.
(b) Purposes.--The purposes of this subtitle 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. 253. 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. 254. 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 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. 255. 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 subtitle, 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 one year after the
date of the enactment of the FHA Manufactured Housing Loan
Modernization Act of 2008.''.
(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).''.
SEC. 256. 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. 257. 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. 258. 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 subtitle, 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. 259. REQUIREMENT OF SOCIAL SECURITY ACCOUNT NUMBER FOR
ASSISTANCE.
Section 2 of the National Housing Act (12 U.S.C. 1703) is
amended by adding at the end the following new subsection:
``(j) Requirement of Social Security Account Number for
Financing.--No insurance shall be granted under this section
with respect to any obligation representing any loan, advance
of credit, or purchase by a financial institution unless the
borrower to
[[Page H3235]]
which the loan or advance of credit was made has a valid
social security number.''.
SEC. 260. GAO STUDY OF MITIGATION OF TORNADO RISKS TO
MANUFACTURED HOMES.
The Comptroller General of the United States shall assess
how the Secretary of Housing and Urban Development utilizes
the FHA manufactured housing loan insurance program under
title I of the National Housing Act, the community
development block grant program under title I of the Housing
and Community Development Act of 1974, and other programs and
resources available to the Secretary to mitigate the risks to
manufactured housing residents and communities resulting from
tornados. The Comptroller General shall submit to the
Congress a report on the conclusions and recommendations of
the assessment conducted pursuant to this section not later
than the expiration of the 12-month period beginning on the
date of the enactment of this Act.
TITLE III--REFORM OF GOVERNMENT-SPONSORED ENTITIES FOR HOUSING FINANCE
SEC. 301. SHORT TITLE.
This title may be cited as the ``Federal Housing Finance
Reform Act of 2008''.
SEC. 302. DEFINITIONS.
Section 1303 of the Housing and Community Development Act
of 1992 (12 U.S.C. 4502) is amended--
(1) in paragraph (7), by striking ``an enterprise'' and
inserting ``a regulated entity'';
(2) by striking ``the enterprise'' each place such term
appears (except in paragraphs (4) and (18)) and inserting
``the regulated entity'';
(3) in paragraph (5), by striking ``Office of Federal
Housing Enterprise Oversight of the Department of Housing and
Urban Development'' and inserting ``Federal Housing Finance
Agency'';
(4) in each of paragraphs (8), (9), (10), and (19), by
striking ``Secretary'' each place that term appears and
inserting ``Director'';
(5) in paragraph (13), by inserting ``, with respect to an
enterprise,'' after ``means'';
(6) by redesignating paragraphs (16) through (19) as
paragraphs (20) through (23), respectively;
(7) by striking paragraphs (14) and (15) and inserting the
following new paragraphs:
``(18) Regulated entity.--The term `regulated entity'
means--
``(A) the Federal National Mortgage Association and any
affiliate thereof;
``(B) the Federal Home Loan Mortgage Corporation and any
affiliate thereof; and
``(C) each Federal home loan bank.
``(19) Regulated entity-affiliated party.--The term
`regulated entity-affiliated party' means--
``(A) any director, officer, employee, or agent for, a
regulated entity, or controlling shareholder of an
enterprise;
``(B) any shareholder, affiliate, consultant, or joint
venture partner of a regulated entity, and any other person,
as determined by the Director (by regulation or on a case-by-
case basis) that participates in the conduct of the affairs
of a regulated entity, except that a shareholder of a
regulated entity shall not be considered to have participated
in the affairs of that regulated entity solely by reason of
being a member or customer of the regulated entity;
``(C) any independent contractor for a regulated entity
(including any attorney, appraiser, or accountant), if--
``(i) the independent contractor knowingly or recklessly
participates in--
``(I) any violation of any law or regulation;
``(II) any breach of fiduciary duty; or
``(III) any unsafe or unsound practice; and
``(ii) such violation, breach, or practice caused, or is
likely to cause, more than a minimal financial loss to, or a
significant adverse effect on, the regulated entity; and
``(D) any not-for-profit corporation that receives its
principal funding, on an ongoing basis, from any regulated
entity.''.
(8) by redesignating paragraphs (8) through (13) as
paragraphs (12) through (17), respectively; and
(9) by inserting after paragraph (7) the following new
paragraph:
``(11) Federal home loan bank.--The term `Federal home loan
bank' means a bank established under the authority of the
Federal Home Loan Bank Act.'';
(10) by redesignating paragraphs (2) through (7) as
paragraphs (5) through (10), respectively; and
(11) by inserting after paragraph (1) the following new
paragraphs:
``(2) Agency.--The term `Agency' means the Federal Housing
Finance Agency.
``(3) Authorizing statutes.--The term `authorizing
statutes' means--
``(A) the Federal National Mortgage Association Charter
Act;
``(B) the Federal Home Loan Mortgage Corporation Act; and
``(C) the Federal Home Loan Bank Act.
``(4) Board.--The term `Board' means the Federal Housing
Enterprise Board established under section 1313B.''.
Subtitle A--Reform of Regulation of Enterprises and Federal Home Loan
Banks
CHAPTER 1--IMPROVEMENT OF SAFETY AND SOUNDNESS
SEC. 311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE
AGENCY.
(a) In General.--The Housing and Community Development Act
of 1992 (12 U.S.C. 4501 et seq.) is amended by striking
sections 1311 and 1312 and inserting the following:
``SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE
AGENCY.
``(a) Establishment.--There is established the Federal
Housing Finance Agency, which shall be an independent agency
of the Federal Government.
``(b) General Supervisory and Regulatory Authority.--
``(1) In general.--Each regulated entity shall, to the
extent provided in this title, be subject to the supervision
and regulation of the Agency.
``(2) Authority over fannie mae, freddie mac, and federal
home loan banks.--The Director of the Federal Housing Finance
Agency shall have general supervisory and regulatory
authority over each regulated entity and shall exercise such
general regulatory and supervisory authority, including such
duties and authorities set forth under section 1313 of this
Act, to ensure that the purposes of this Act, the authorizing
statutes, and any other applicable law are carried out. The
Director shall have the same supervisory and regulatory
authority over any joint office of the Federal home loan
banks, including the Office of Finance of the Federal Home
Loan Banks, as the Director has over the individual Federal
home loan banks.
``(c) Savings Provision.--The authority of the Director to
take actions under subtitles B and C shall not in any way
limit the general supervisory and regulatory authority
granted to the Director.
``SEC. 1312. DIRECTOR.
``(a) Establishment of Position.--There is established the
position of the Director of the Federal Housing Finance
Agency, who shall be the head of the Agency.
``(b) Appointment; Term.--
``(1) Appointment.--The Director shall be appointed by the
President, by and with the advice and consent of the Senate,
from among individuals who are citizens of the United States,
have a demonstrated understanding of financial management or
oversight, and have a demonstrated understanding of capital
markets, including the mortgage securities markets and
housing finance.
``(2) Term and removal.--The Director shall be appointed
for a term of 5 years and may be removed by the President
only for cause.
``(3) Vacancy.--A vacancy in the position of Director that
occurs before the expiration of the term for which a Director
was appointed shall be filled in the manner established under
paragraph (1), and the Director appointed to fill such
vacancy shall be appointed only for the remainder of such
term.
``(4) Service after end of term.--An individual may serve
as the Director after the expiration of the term for which
appointed until a successor has been appointed.
``(5) Transitional provision.--Notwithstanding paragraphs
(1) and (2), the Director of the Office of Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development shall serve as the Director until a successor has
been appointed under paragraph (1).
``(c) Deputy Director of the Division of Enterprise
Regulation.--
``(1) In general.--The Agency shall have a Deputy Director
of the Division of Enterprise Regulation, who shall be
appointed by the Director from among individuals who are
citizens of the United States, and have a demonstrated
understanding of financial management or oversight and of
mortgage securities markets and housing finance.
``(2) Functions.--The Deputy Director of the Division of
Enterprise Regulation shall have such functions, powers, and
duties with respect to the oversight of the enterprises as
the Director shall prescribe.
``(d) Deputy Director of the Division of Federal Home Loan
Bank Regulation.--
``(1) In general.--The Agency shall have a Deputy Director
of the Division of Federal Home Loan Bank Regulation, who
shall be appointed by the Director from among individuals who
are citizens of the United States, have a demonstrated
understanding of financial management or oversight and of the
Federal Home Loan Bank System and housing finance.
``(2) Functions.--The Deputy Director of the Division of
Federal Home Loan Bank Regulation shall have such functions,
powers, and duties with respect to the oversight of the
Federal home loan banks as the Director shall prescribe.
``(e) Deputy Director for Housing.--
``(1) In general.--The Agency shall have a Deputy Director
for Housing, who shall be appointed by the Director from
among individuals who are citizens of the United States, and
have a demonstrated understanding of the housing markets and
housing finance and of community and economic development.
``(2) Functions.--The Deputy Director for Housing shall
have such functions, powers, and duties with respect to the
oversight of the housing mission and goals of the
enterprises, and with respect to oversight of the housing
finance and community and economic development mission of the
Federal home loan banks, as the Director shall prescribe.
``(f) Limitations.--The Director and each of the Deputy
Directors may not--
``(1) have any direct or indirect financial interest in any
regulated entity or regulated entity-affiliated party;
``(2) hold any office, position, or employment in any
regulated entity or regulated entity-affiliated party; or
``(3) have served as an executive officer or director of
any regulated entity, or regulated entity-affiliated party,
at any time during
[[Page H3236]]
the 3-year period ending on the date of appointment of such
individual as Director or Deputy Director.
``(g) Ombudsman.--The Director shall establish the position
of the Ombudsman in the Agency. The Director shall provide
that the Ombudsman will consider complaints and appeals from
any regulated entity and any person that has a business
relationship with a regulated entity and shall specify the
duties and authority of the Ombudsman.''.
(b) Appointment of Director.--Notwithstanding any other
provision of law or of this title, the President may, any
time after the date of the enactment of this Act, appoint an
individual to serve as the Director of the Federal Housing
Finance Agency, as such office is established by the
amendment made by subsection (a). This subsection shall take
effect on the date of the enactment of this Act.
SEC. 312. DUTIES AND AUTHORITIES OF DIRECTOR.
(a) In General.--The Housing and Community Development Act
of 1992 (12 U.S.C. 4513) is amended by striking section 1313
and inserting the following new sections:
``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.
``(a) Duties.--
``(1) Principal duties.--The principal duties of the
Director shall be--
``(A) to oversee the operations of each regulated entity
and any joint office of the Federal Home Loan Banks; and
``(B) to ensure that--
``(i) each regulated entity operates in a safe and sound
manner, including maintenance of adequate capital and
internal controls;
``(ii) the operations and activities of each regulated
entity foster liquid, efficient, competitive, and resilient
national housing finance markets that minimize the cost of
housing finance (including activities relating to mortgages
on housing for low- and moderate- income families involving a
reasonable economic return that may be less than the return
earned on other activities);
``(iii) each regulated entity complies with this title and
the rules, regulations, guidelines, and orders issued under
this title and the authorizing statutes; and
``(iv) each regulated entity carries out its statutory
mission only through activities that are consistent with this
title and the authorizing statutes.
``(2) Scope of authority.--The authority of the Director
shall include the authority--
``(A) to review and, if warranted based on the principal
duties described in paragraph (1), reject any acquisition or
transfer of a controlling interest in an enterprise; and
``(B) to exercise such incidental powers as may be
necessary or appropriate to fulfill the duties and
responsibilities of the Director in the supervision and
regulation of each regulated entity.
``(b) Delegation of Authority.--The Director may delegate
to officers or employees of the Agency, including each of the
Deputy Directors, any of the functions, powers, or duties of
the Director, as the Director considers appropriate.
``(c) Litigation Authority.--
``(1) In general.--In enforcing any provision of this
title, any regulation or order prescribed under this title,
or any other provision of law, rule, regulation, or order, or
in any other action, suit, or proceeding to which the
Director is a party or in which the Director is interested,
and in the administration of conservatorships and
receiverships, the Director may act in the Director's own
name and through the Director's own attorneys, or request
that the Attorney General of the United States act on behalf
of the Director.
``(2) Consultation with attorney general.--The Director
shall provide notice to, and consult with, the Attorney
General of the United States before taking an action under
paragraph (1) of this subsection or under section 1344(a),
1345(d), 1348(c), 1372(e), 1375(a), 1376(d), or 1379D(c),
except that, if the Director determines that any delay caused
by such prior notice and consultation may adversely affect
the safety and soundness responsibilities of the Director
under this title, the Director shall notify the Attorney
General as soon as reasonably possible after taking such
action.
``(3) Subject to suit.--Except as otherwise provided by
law, the Director shall be subject to suit (other than suits
on claims for money damages) by a regulated entity or
director or officer thereof with respect to any matter under
this title or any other applicable provision of law, rule,
order, or regulation under this title, in the United States
district court for the judicial district in which the
regulated entity has its principal place of business, or in
the United States District Court for the District of
Columbia, and the Director may be served with process in the
manner prescribed by the Federal Rules of Civil Procedure.
``SEC. 1313A. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.
``(a) Standards.--The Director shall establish standards,
by regulation, guideline, or order, for each regulated entity
relating to--
``(1) adequacy of internal controls and information
systems, including information security and privacy policies
and practices, taking into account the nature and scale of
business operations;
``(2) independence and adequacy of internal audit systems;
``(3) management of credit and counterparty risk, including
systems to identify concentrations of credit risk and
prudential limits to restrict exposure of the regulated
entity to a single counterparty or groups of related
counterparties;
``(4) management of interest rate risk exposure;
``(5) management of market risk, including standards that
provide for systems that accurately measure, monitor, and
control market risks and, as warranted, that establish
limitations on market risk;
``(6) adequacy and maintenance of liquidity and reserves;
``(7) management of any asset and investment portfolio;
``(8) investments and acquisitions by a regulated entity,
to ensure that they are consistent with the purposes of this
Act and the authorizing statutes;
``(9) maintenance of adequate records, in accordance with
consistent accounting policies and practices that enable the
Director to evaluate the financial condition of the regulated
entity;
``(10) issuance of subordinated debt by that particular
regulated entity, as the Director considers necessary;
``(11) overall risk management processes, including
adequacy of oversight by senior management and the board of
directors and of processes and policies to identify, measure,
monitor, and control material risks, including reputational
risks, and for adequate, well-tested business resumption
plans for all major systems with remote site facilities to
protect against disruptive events; and
``(12) such other operational and management standards as
the Director determines to be appropriate.
``(b) Failure To Meet Standards.--
``(1) Plan requirement.--
``(A) In general.--If the Director determines that a
regulated entity fails to meet any standard established under
subsection (a)--
``(i) if such standard is established by regulation, the
Director shall require the regulated entity to submit an
acceptable plan to the Director within the time allowed under
subparagraph (C); and
``(ii) if such standard is established by guideline, the
Director may require the regulated entity to submit a plan
described in clause (i).
``(B) Contents.--Any plan required under subparagraph (A)
shall specify the actions that the regulated entity will take
to correct the deficiency. If the regulated entity is
undercapitalized, the plan may be a part of the capital
restoration plan for the regulated entity under section
1369C.
``(C) Deadlines for submission and review.--The Director
shall by regulation establish deadlines that--
``(i) provide the regulated entities with reasonable time
to submit plans required under subparagraph (A), and
generally require a regulated entity to submit a plan not
later than 30 days after the Director determines that the
entity fails to meet any standard established under
subsection (a); and
``(ii) require the Director to act on plans expeditiously,
and generally not later than 30 days after the plan is
submitted.
``(2) Required order upon failure to submit or implement
plan.--If a regulated entity fails to submit an acceptable
plan within the time allowed under paragraph (1)(C), or fails
in any material respect to implement a plan accepted by the
Director, the following shall apply:
``(A) Required correction of deficiency.--The Director
shall, by order, require the regulated entity to correct the
deficiency.
``(B) Other authority.--The Director may, by order, take
one or more of the following actions until the deficiency is
corrected:
``(i) Prohibit the regulated entity from permitting its
average total assets (as such term is defined in section
1316(b)) during any calendar quarter to exceed its average
total assets during the preceding calendar quarter, or
restrict the rate at which the average total assets of the
entity may increase from one calendar quarter to another.
``(ii) Require the regulated entity--
``(I) in the case of an enterprise, to increase its ratio
of core capital to assets.
``(II) in the case of a Federal home loan bank, to increase
its ratio of total capital (as such term is defined in
section 6(a)(5) of the Federal Home Loan Bank Act (12 U.S.C.
1426(a)(5)) to assets.
``(iii) Require the regulated entity to take any other
action that the Director determines will better carry out the
purposes of this section than any of the actions described in
this subparagraph.
``(3) Mandatory restrictions.--In complying with paragraph
(2), the Director shall take one or more of the actions
described in clauses (i) through (iii) of paragraph (2)(B)
if--
``(A) the Director determines that the regulated entity
fails to meet any standard prescribed under subsection (a);
``(B) the regulated entity has not corrected the
deficiency; and
``(C) during the 18-month period before the date on which
the regulated entity first failed to meet the standard, the
entity underwent extraordinary growth, as defined by the
Director.
``(c) Other Enforcement Authority Not Affected.--The
authority of the Director under this section is in addition
to any other authority of the Director.''.
(b) Independence in Congressional Testimony and
Recommendations.--Section 111 of Public Law 93-495 (12 U.S.C.
250) is amended by striking ``the Federal Housing Finance
[[Page H3237]]
Board'' and inserting ``the Director of the Federal Housing
Finance Agency''.
SEC. 313. FEDERAL HOUSING ENTERPRISE BOARD.
(a) In General.--Title XIII of the Housing and Community
Development Act of 1992 (12 U.S.C. 4501 et seq.) is amended
by inserting after section 1313A, as added by the preceding
provisions of this title, the following new section:
``SEC. 1313B. FEDERAL HOUSING ENTERPRISE BOARD.
``(a) In General.--There is established the Federal Housing
Enterprise Board, which shall advise the Director with
respect to overall strategies and policies in carrying out
the duties of the Director under this title.
``(b) Limitations.--The Board may not exercise any
executive authority, and the Director may not delegate to the
Board any of the functions, powers, or duties of the
Director.
``(c) Composition.--The Board shall be comprised of 3
members, of whom--
``(1) one member shall be the Secretary of the Treasury;
``(2) one member shall be the Secretary of Housing and
Urban Development; and
``(3) one member shall be the Director, who shall serve as
the Chairperson of the Board.
``(d) Meetings.--
``(1) In general.--The Board shall meet upon notice by the
Director, but in no event shall the Board meet less
frequently than once every 3 months.
``(2) Special meetings.--Either the Secretary of the
Treasury or the Secretary of Housing and Urban Development
may, upon giving written notice to the Director, require a
special meeting of the Board.
``(e) Testimony.--On an annual basis, the Board shall
testify before Congress regarding--
``(1) the safety and soundness of the regulated entities;
``(2) any material deficiencies in the conduct of the
operations of the regulated entities;
``(3) the overall operational status of the regulated
entities;
``(4) an evaluation of the performance of the regulated
entities in carrying out their respective missions;
``(5) operations, resources, and performance of the Agency;
and
``(6) such other matters relating to the Agency and its
fulfillment of its mission, as the Board determines
appropriate.''.
(b) Annual Report of the Director.--Section 1319B(a) of the
Housing and Community Development Act of 1992 (12 U.S.C. 4521
(a)) is amended--
(1) in paragraph (3), by striking ``and'' at the end; and
(2) by striking paragraph (4) and inserting the following
new paragraphs:
``(4) an assessment of the Board or any of its members with
respect to--
``(A) the safety and soundness of the regulated entities;
``(B) any material deficiencies in the conduct of the
operations of the regulated entities;
``(C) the overall operational status of the regulated
entities; and
``(D) an evaluation of the performance of the regulated
entities in carrying out their missions;
``(5) operations, resources, and performance of the Agency;
``(6) a description of the demographic makeup of the
workforce of the Agency and the actions taken pursuant to
section 1319A(b) to provide for diversity in the workforce;
and
``(7) such other matters relating to the Agency and its
fulfillment of its mission.''.
SEC. 314. AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTITIES.
Section 1314 of the Housing and Community Development Act
of 1992 (12 U.S.C. 4514) is amended--
(1) in the section heading, by striking ``ENTERPRISES'' and
inserting ``REGULATED ENTITIES'';
(2) in subsection (a)--
(A) in the subsection heading, by striking ``Special
Reports and Reports of Financial Condition'' and inserting
``Regular and Special Reports'';
(B) in paragraph (1)--
(i) in the paragraph heading, by striking ``Financial
condition'' and inserting ``Regular reports''; and
(ii) by striking ``reports of financial condition and
operations'' and inserting ``regular reports on the condition
(including financial condition), management, activities, or
operations of the regulated entity, as the Director considers
appropriate''; and
(C) in paragraph (2), after ``submit special reports''
insert ``on any of the topics specified in paragraph (1) or
such other topics''; and
(3) by adding at the end the following new subsection:
``(c) Reports of Fraudulent Financial Transactions.--
``(1) Requirement to report.--The Director shall require a
regulated entity to submit to the Director a timely report
upon discovery by the regulated entity that it has purchased
or sold a fraudulent loan or financial instrument or suspects
a possible fraud relating to a purchase or sale of any loan
or financial instrument. The Director shall require the
regulated entities to establish and maintain procedures
designed to discover any such transactions.
``(2) Protection from liability for reports.--
``(A) In general.--If a regulated entity makes a report
pursuant to paragraph (1), or a regulated entity-affiliated
party makes, or requires another to make, such a report, and
such report is made in a good faith effort to comply with the
requirements of paragraph (1), such regulated entity or
regulated entity-affiliated party shall not be liable to any
person under any law or regulation of the United States, any
constitution, law, or regulation of any State or political
subdivision of any State, or under any contract or other
legally enforceable agreement (including any arbitration
agreement), for such report or for any failure to provide
notice of such report to the person who is the subject of
such report or any other person identified in the report.
``(B) Rule of construction.--Subparagraph (A) shall not be
construed as creating--
``(i) any inference that the term `person', as used in such
subparagraph, may be construed more broadly than its ordinary
usage so as to include any government or agency of
government; or
``(ii) any immunity against, or otherwise affecting, any
civil or criminal action brought by any government or agency
of government to enforce any constitution, law, or regulation
of such government or agency.''.
SEC. 315. DISCLOSURE OF INCOME AND CHARITABLE CONTRIBUTIONS
BY ENTERPRISES.
Section 1314 of the Housing and Community Development Act
of 1992 (12 U.S.C. 4514), as amended by the preceding
provisions of this title, is further amended by adding at the
end the following new subsections:
``(d) Disclosure of Charitable Contributions by
Enterprises.--
``(1) Required disclosure.--The Director shall, by
regulation, require each enterprise to submit a report
annually, in a format designated by the Director, containing
the following information:
``(A) Total value.--The total value of contributions made
by the enterprise to nonprofit organizations during its
previous fiscal year.
``(B) Substantial contributions.--If the value of
contributions made by the enterprise to any nonprofit
organization during its previous fiscal year exceeds the
designated amount, the name of that organization and the
value of contributions.
``(C) Substantial contributions to insider-affiliated
charities.--Identification of each contribution whose value
exceeds the designated amount that were made by the
enterprise during the enterprise's previous fiscal year to
any nonprofit organization of which a director, officer, or
controlling person of the enterprise, or a spouse thereof,
was a director or trustee, the name of such nonprofit
organization, and the value of the contribution.
``(2) Definitions.--For purposes of this subsection--
``(A) the term `designated amount' means such amount as may
be designated by the Director by regulation, consistent with
the public interest and the protection of investors for
purposes of this subsection; and
``(B) the Director may, by such regulations as the Director
deems necessary or appropriate in the public interest, define
the terms officer and controlling person.
``(3) Public availability.--The Director shall make the
information submitted pursuant to this subsection publicly
available.
``(e) Disclosure of Income.--Each enterprise shall include,
in each annual report filed under section 13 of the
Securities Exchange Act of 1934 (15 U.S.C. 78m), the income
reported by the issuer to the Internal Revenue Service for
the most recent taxable year. Such income shall--
``(1) be presented in a prominent location in each such
report and in a manner that permits a ready comparison of
such income to income otherwise required to be included in
such reports under regulations issued under such section; and
``(2) be submitted to the Securities and Exchange
Commission in a form and manner suitable for entry into the
EDGAR system of such Commission for public availability under
such system.''.
SEC. 316. ASSESSMENTS.
Section 1316 of the Housing and Community Development Act
of 1992 (12 U.S.C. 4516) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Annual Assessments.--The Director shall establish and
collect from the regulated entities annual assessments in an
amount not exceeding the amount sufficient to provide for
reasonable costs and expenses of the Agency, including--
``(1) the expenses of any examinations under section 1317
of this Act and under section 20 of the Federal Home Loan
Bank Act;
``(2) the expenses of obtaining any reviews and credit
assessments under section 1319;
``(3) such amounts in excess of actual expenses for any
given year as deemed necessary by the Director to maintain a
working capital fund in accordance with subsection (e); and
``(4) the wind up of the affairs of the Office of Federal
Housing Enterprise Oversight and the Federal Housing Finance
Board under subtitle C of the Federal Housing Finance Reform
Act of 2008.'';
(2) in subsection (b)--
(A) in the subsection heading, by striking ``Enterprises''
and inserting ``Regulated Entities'' ;
[[Page H3238]]
(B) by realigning paragraph (2) two ems from the left
margin, so as to align the left margin of such paragraph with
the left margins of paragraph (1);
(C) in paragraph (1)--
(i) by striking ``Each enterprise'' and inserting ``Each
regulated entity'';
(ii) by striking ``each enterprise'' and inserting ``each
regulated entity''; and
(iii) by striking ``both enterprises'' and inserting ``all
of the regulated entities''; and
(D) in paragraph (3)--
(i) in subparagraph (B), by striking ``subparagraph (A)''
and inserting ``clause (i)'';
(ii) by redesignating subparagraphs (A), (B), and (C) as
clauses (i), (ii) and (ii), respectively, and realigning such
clauses, as so redesignated, so as to be indented 6 ems from
the left margin;
(iii) by striking the matter that precedes clause (i), as
so redesignated, and inserting the following:
``(3) Definition of total assets.--For purposes of this
section, the term `total assets' means as follows:
``(A) Enterprises.--With respect to an enterprise, the sum
of--''; and
(iv) by adding at the end the following new subparagraph:
``(B) Federal home loan banks.--With respect to a Federal
home loan bank, the total assets of the Bank, as determined
by the Director in accordance with generally accepted
accounting principles.'';
(3) by striking subsection (c) and inserting the following
new subsection:
``(c) Increased Costs of Regulation.--
``(1) Increase for inadequate capitalization.--The
semiannual payments made pursuant to subsection (b) by any
regulated entity that is not classified (for purposes of
subtitle B) as adequately capitalized may be increased, as
necessary, in the discretion of the Director to pay
additional estimated costs of regulation of the regulated
entity.
``(2) Adjustment for enforcement activities.--The Director
may adjust the amounts of any semiannual payments for an
assessment under subsection (a) that are to be paid pursuant
to subsection (b) by a regulated entity, as necessary in the
discretion of the Director, to ensure that the costs of
enforcement activities under this Act for a regulated entity
are borne only by such regulated entity.
``(3) Additional assessment for deficiencies.--If at any
time, as a result of increased costs of regulation of a
regulated entity that is not classified (for purposes of
subtitle B) as adequately capitalized or as the result of
supervisory or enforcement activities under this Act for a
regulated entity, the amount available from any semiannual
payment made by such regulated entity pursuant to subsection
(b) is insufficient to cover the costs of the Agency with
respect to such entity, the Director may make and collect
from such regulated entity an immediate assessment to cover
the amount of such deficiency for the semiannual period. If,
at the end of any semiannual period during which such an
assessment is made, any amount remains from such assessment,
such remaining amount shall be deducted from the assessment
for such regulated entity for the following semiannual
period.'';
(4) in subsection (d), by striking ``If'' and inserting
``Except with respect to amounts collected pursuant to
subsection (a)(3), if''; and
(5) by striking subsections (e) through (g) and inserting
the following new subsections:
``(e) Working Capital Fund.--At the end of each year for
which an assessment under this section is made, the Director
shall remit to each regulated entity any amount of assessment
collected from such regulated entity that is attributable to
subsection (a)(3) and is in excess of the amount the Director
deems necessary to maintain a working capital fund.
``(f) Treatment of Assessments.--
``(1) Deposit.--Amounts received by the Director from
assessments under this section may be deposited by the
Director in the manner provided in section 5234 of the
Revised Statutes (12 U.S.C. 192) for monies deposited by the
Comptroller of the Currency.
``(2) Not government funds.--The amounts received by the
Director from any assessment under this section shall not be
construed to be Government or public funds or appropriated
money.
``(3) No apportionment of funds.--Notwithstanding any other
provision of law, the amounts received by the Director from
any assessment under this section shall not be subject to
apportionment for the purpose of chapter 15 of title 31,
United States Code, or under any other authority.
``(4) Use of funds.--The Director may use any amounts
received by the Director from assessments under this section
for compensation of the Director and other employees of the
Agency and for all other expenses of the Director and the
Agency.
``(5) Availability of oversight fund amounts.--
Notwithstanding any other provision of law, any amounts
remaining in the Federal Housing Enterprises Oversight Fund
established under this section (as in effect before the
effective date under section 365 of the Federal Housing
Finance Reform Act of 2008), and any amounts remaining from
assessments on the Federal Home Loan banks pursuant to
section 18(b) of the Federal Home Loan Bank Act (12 U.S.C.
1438(b)), shall, upon such effective date, be treated for
purposes of this subsection as amounts received from
assessments under this section.
``(6) Treasury investments.--
``(A) Authority.--The Director may request the Secretary of
the Treasury to invest such portions of amount received by
the Director from assessments paid under this section that,
in the Director's discretion, are not required to meet the
current working needs of the Agency.
``(B) Government obligations.--Pursuant to a request under
subparagraph (A), the Secretary of the Treasury shall invest
such amounts in government obligations guaranteed as to
principal and interest by the United States with maturities
suitable to the needs of Agency and bearing interest at a
rate determined by the Secretary of the Treasury taking into
consideration current market yields on outstanding marketable
obligations of the United States of comparable maturity.
``(g) Budget and Financial Management.--
``(1) Financial operating plans and forecasts.--The
Director shall provide to the Director of the Office of
Management and Budget copies of the Director's financial
operating plans and forecasts as prepared by the Director in
the ordinary course of the Agency's operations, and copies of
the quarterly reports of the Agency's financial condition and
results of operations as prepared by the Director in the
ordinary course of the Agency's operations.
``(2) Financial statements.--The Agency shall prepare
annually a statement of assets and liabilities and surplus or
deficit; a statement of income and expenses; and a statement
of sources and application of funds.
``(3) Financial management systems.--The Agency shall
implement and maintain financial management systems that
comply substantially with Federal financial management
systems requirements, applicable Federal accounting
standards, and that uses a general ledger system that
accounts for activity at the transaction level.
``(4) Assertion of internal controls.--The Director shall
provide to the Comptroller General an assertion as to the
effectiveness of the internal controls that apply to
financial reporting by the Agency, using the standards
established in section 3512(c) of title 31, United States
Code.
``(5) Rule of construction.--This subsection may not be
construed as implying any obligation on the part of the
Director to consult with or obtain the consent or approval of
the Director of the Office of Management and Budget with
respect to any reports, plans, forecasts, or other
information referred to in paragraph (1) or any jurisdiction
or oversight over the affairs or operations of the Agency.
``(h) Audit of Agency.--
``(1) In general.--The Comptroller General shall annually
audit the financial transactions of the Agency in accordance
with the U.S. generally accepted government auditing
standards as may be prescribed by the Comptroller General of
the United States. The audit shall be conducted at the place
or places where accounts of the Agency are normally kept. The
representatives of the Government Accountability Office shall
have access to the personnel and to all books, accounts,
documents, papers, records (including electronic records),
reports, files, and all other papers, automated data, things,
or property belonging to or under the control of or used or
employed by the Agency pertaining to its financial
transactions and necessary to facilitate the audit, and such
representatives shall be afforded full facilities for
verifying transactions with the balances or securities held
by depositories, fiscal agents, and custodians. All such
books, accounts, documents, records, reports, files, papers,
and property of the Agency shall remain in possession and
custody of the Agency. The Comptroller General may obtain and
duplicate any such books, accounts, documents, records,
working papers, automated data and files, or other
information relevant to such audit without cost to the
Comptroller General and the Comptroller General's right of
access to such information shall be enforceable pursuant to
section 716(c) of title 31, United States Code.
``(2) Report.--The Comptroller General shall submit to the
Congress a report of each annual audit conducted under this
subsection. The report to the Congress shall set forth the
scope of the audit and shall include the statement of assets
and liabilities and surplus or deficit, the statement of
income and expenses, the statement of sources and application
of funds, and such comments and information as may be deemed
necessary to inform Congress of the financial operations and
condition of the Agency, together with such recommendations
with respect thereto as the Comptroller General may deem
advisable. A copy of each report shall be furnished to the
President and to the Agency at the time submitted to the
Congress.
``(3) Assistance and costs.--For the purpose of conducting
an audit under this subsection, the Comptroller General may,
in the discretion of the Comptroller General, employ by
contract, without regard to section 5 of title 41, United
States Code, professional services of firms and organizations
of certified public accountants for temporary periods or for
special purposes. Upon the request of the Comptroller
General, the Director of the Agency shall transfer to the
Government Accountability Office from funds available, the
amount requested by the Comptroller General to cover the full
costs of any audit and report conducted by the Comptroller
General. The Comptroller General shall credit funds
transferred to the account established for salaries and
expenses of the Government Accountability Office, and such
[[Page H3239]]
amount shall be available upon receipt and without fiscal
year limitation to cover the full costs of the audit and
report.''.
SEC. 317. EXAMINERS AND ACCOUNTANTS.
(a) Examinations.--Section 1317 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4517) is
amended--
(1) in subsection (a), by adding after the period at the
end the following: ``Each examination under this subsection
of a regulated entity shall include a review of the
procedures required to be established and maintained by the
regulated entity pursuant to section 1314(c) (relating to
fraudulent financial transactions) and the report regarding
each such examination shall describe any problems with such
procedures maintained by the regulated entity.'';
(2) in subsection (b)--
(A) by inserting ``of a regulated entity'' after ``under
this section''; and
(B) by striking ``to determine the condition of an
enterprise for the purpose of ensuring its financial safety
and soundness'' and inserting ``or appropriate''; and
(3) in subsection (c)--
(A) in the second sentence, by inserting ``to conduct
examinations under this section'' before the period; and
(B) in the third sentence, by striking ``from amounts
available in the Federal Housing Enterprises Oversight
Fund''.
(b) Enhanced Authority To Hire Examiners and Accountants.--
Section 1317 of the Housing and Community Development Act of
1992 (12 U.S.C. 4517) is amended by adding at the end the
following new subsection:
``(g) Appointment of Accountants, Economists, Specialists,
and Examiners.--
``(1) Applicability.--This section applies with respect to
any position of examiner, accountant, specialist in financial
markets, specialist in information technology, and economist
at the Agency, with respect to supervision and regulation of
the regulated entities, that is in the competitive service.
``(2) Appointment authority.--The Director may appoint
candidates to any position described in paragraph (1)--
``(A) in accordance with the statutes, rules, and
regulations governing appointments in the excepted service;
and
``(B) notwithstanding any statutes, rules, and regulations
governing appointments in the competitive service.
``(3) Rule of construction.--The appointment of a candidate
to a position under the authority of this subsection shall
not be considered to cause such position to be converted from
the competitive service to the excepted service.''.
(c) Repeal.--Section 20 of the Federal Home Loan Bank Act
(12 U.S.C. 1440) is amended--
(1) by striking the section heading and inserting the
following: ``examinations and gao audits'';
(2) in the third sentence, by striking ``the Board and''
each place such term appears; and
(3) by striking the first two sentences and inserting the
following: ``The Federal home loan banks shall be subject to
examinations by the Director to the extent provided in
section 1317 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4517).''.
SEC. 318. PROHIBITION AND WITHHOLDING OF EXECUTIVE
COMPENSATION.
(a) In General.--Section 1318 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4518) is amended--
(1) in the section heading, by striking ``OF EXCESSIVE''
and inserting ``AND WITHHOLDING OF EXECUTIVE'';
(2) by redesignating subsection (b) as subsection (d); and
(3) by inserting after subsection (a) the following new
subsections:
``(b) Factors.--In making any determination under
subsection (a), the Director may take into consideration any
factors the Director considers relevant, including any
wrongdoing on the part of the executive officer, and such
wrongdoing shall include any fraudulent act or omission,
breach of trust or fiduciary duty, violation of law, rule,
regulation, order, or written agreement, and insider abuse
with respect to the regulated entity. The approval of an
agreement or contract pursuant to section 309(d)(3)(B) of the
Federal National Mortgage Association Charter Act (12 U.S.C.
1723a(d)(3)(B)) or section 303(h)(2) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1452(h)(2)) shall not
preclude the Director from making any subsequent
determination under subsection (a).
``(c) Withholding of Compensation.--In carrying out
subsection (a), the Director may require a regulated entity
to withhold any payment, transfer, or disbursement of
compensation to an executive officer, or to place such
compensation in an escrow account, during the review of the
reasonableness and comparability of compensation.''.
(b) Conforming Amendments.--
(1) Fannie mae.--Section 309(d) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1723a(d)) is
amended by adding at the end the following new paragraph:
``(4) Notwithstanding any other provision of this section,
the corporation shall not transfer, disburse, or pay
compensation to any executive officer, or enter into an
agreement with such executive officer, without the approval
of the Director, for matters being reviewed under section
1318 of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4518).''.
(2) Freddie mac.--Section 303(h) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1452(h)) is amended by
adding at the end the following new paragraph:
``(4) Notwithstanding any other provision of this section,
the Corporation shall not transfer, disburse, or pay
compensation to any executive officer, or enter into an
agreement with such executive officer, without the approval
of the Director, for matters being reviewed under section
1318 of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4518).''.
(3) Federal home loan banks.--Section 7 of the Federal Home
Loan Bank Act (12 U.S.C. 1427) is amended by adding at the
end the following new subsection:
``(l) Withholding of Compensation.--Notwithstanding any
other provision of this section, a Federal home loan bank
shall not transfer, disburse, or pay compensation to any
executive officer, or enter into an agreement with such
executive officer, without the approval of the Director, for
matters being reviewed under section 1318 of the Federal
Housing Enterprises Financial Safety and Soundness Act of
1992 (12 U.S.C. 4518).''.
SEC. 319. REVIEWS OF REGULATED ENTITIES.
Section 1319 of the Housing and Community Development Act
of 1992 (12 U.S.C. 4519) is amended--
(1) by striking the section designation and heading and
inserting the following:
``SEC. 1319. REVIEWS OF REGULATED ENTITIES.'';
and
(2) by striking ``is a nationally recognized'' and all that
follows through ``1934'' and inserting the following: ``the
Director considers appropriate, including an entity that is
registered under section 15 of the Securities Exchange Act of
1934 (15 U.S.C. 78a) as a nationally registered statistical
rating organization''.
SEC. 320. INCLUSION OF MINORITIES AND WOMEN; DIVERSITY IN
AGENCY WORKFORCE.
Section 1319A of the Housing and Community Development Act
of 1992 (12 U.S.C. 4520) is amended--
(1) in the section heading, by striking ``EQUAL OPPORTUNITY
IN SOLICITATION OF CONTRACTS'' and inserting ``MINORITY AND
WOMEN INCLUSION; DIVERSITY REQUIREMENTS'';
(2) in subsection (a), by striking ``(a) In General.--Each
enterprise'' and inserting ``(e) Outreach.--Each regulated
entity''; and
(3) by striking subsection (b);
(4) by inserting before subsection (e), as so redesignated
by paragraph (2) of this section, the following new
subsections:
``(a) Office of Minority and Women Inclusion.--Each
regulated entity shall establish an Office of Minority and
Women Inclusion, or designate an office of the entity, that
shall be responsible for carrying out this section and all
matters of the entity relating to diversity in management,
employment, and business activities in accordance with such
standards and requirements as the Director shall establish.
``(b) Inclusion in All Levels of Business Activities.--Each
regulated entity shall develop and implement standards and
procedures to ensure, to the maximum extent possible, the
inclusion and utilization of minorities (as such term is
defined in section 1204(c) of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811
note)) and women, and minority- and women-owned businesses
(as such terms are defined in section 21A(r)(4) of the
Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)) (including
financial institutions, investment banking firms, mortgage
banking firms, asset management firms, broker-dealers,
financial services firms, underwriters, accountants, brokers,
investment consultants, and providers of legal services) in
all business and activities of the regulated entity at all
levels, including in procurement, insurance, and all types of
contracts (including contracts for the issuance or guarantee
of any debt, equity, or mortgage-related securities, the
management of its mortgage and securities portfolios, the
making of its equity investments, the purchase, sale and
servicing of single- and multi-family mortgage loans, and the
implementation of its affordable housing program and
initiatives). The processes established by each regulated
entity for review and evaluation for contract proposals and
to hire service providers shall include a component that
gives consideration to the diversity of the applicant.
``(c) Applicability.--This section shall apply to all
contracts of a regulated entity for services of any kind,
including services that require the services of investment
banking, asset management entities, broker-dealers, financial
services entities, underwriters, accountants, investment
consultants, and providers of legal services.
``(d) Inclusion in Annual Reports.--Each regulated entity
shall include, in the annual report submitted by the entity
to the Director pursuant to section 309(k) of the Federal
National Mortgage Association Charter Act (12 U.S.C.
1723a(k)), section 307(c) of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1456(c)), and section 20 of the
Federal Home Loan Bank Act (12 U.S.C. 1440), as applicable,
detailed information describing the actions taken by the
entity pursuant to this section, which shall include a
statement of the total amounts paid by the entity to third
party contractors since the last such report and the
percentage of such amounts paid to businesses described in
subsection (b) of this section.''; and
(5) by adding at the end the following new subsection:
[[Page H3240]]
``(f) Diversity in Agency Workforce.--The Agency shall take
affirmative steps to seek diversity in its workforce at all
levels of the agency consistent with the demographic
diversity of the United States, which shall include--
``(1) heavily recruiting at historically Black colleges and
universities, Hispanic-serving institutions, women's
colleges, and colleges that typically serve majority minority
populations;
``(2) sponsoring and recruiting at job fairs in urban
communities, and placing employment advertisements in
newspapers and magazines oriented toward women and people of
color;
``(3) partnering with organizations that are focused on
developing opportunities for minorities and women to place
talented young minorities and women in industry internships,
summer employment, and full-time positions; and
``(4) where feasible, partnering with inner-city high
schools, girls' high schools, and high schools with majority
minority populations to establish or enhance financial
literacy programs and provide mentoring.''.
SEC. 321. REGULATIONS AND ORDERS.
Section 1319G of the Housing and Community Development Act
of 1992 (12 U.S.C. 4526) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Authority.--The Director shall issue any regulations,
guidelines, and orders necessary to carry out the duties of
the Director under this title and each of the authorizing
statutes to ensure that the purposes of this title and such
statutes are accomplished.'';
(2) in subsection (b), by inserting ``, this title, or any
of the authorizing statutes'' after ``under this section'';
and
(3) by striking subsection (c).
SEC. 322. NON-WAIVER OF PRIVILEGES.
Part 1 of subtitle A of title XIII of the Housing and
Community Development Act of 1992 (12 U.S.C. 4511) is amended
by adding at the end the following new section:
``SEC. 1319H. PRIVILEGES NOT AFFECTED BY DISCLOSURE.
``(a) In General.--The submission by any person of any
information to the Agency for any purpose in the course of
any supervisory or regulatory process of the Agency shall not
be construed as waiving, destroying, or otherwise affecting
any privilege such person may claim with respect to such
information under Federal or State law as to any person or
entity other than the Agency.
``(b) Rule of Construction.--No provision of subsection (a)
may be construed as implying or establishing that--
``(1) any person waives any privilege applicable to
information that is submitted or transferred under any
circumstance to which subsection (a) does not apply; or
``(2) any person would waive any privilege applicable to
any information by submitting the information to the Agency,
but for this subsection.''.
SEC. 323. RISK-BASED CAPITAL REQUIREMENTS.
(a) In General.--Section 1361 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4611) is amended to read
as follows:
``SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED
ENTITIES.
``(a) In General.--
``(1) Enterprises.--The Director shall, by regulation,
establish risk-based capital requirements for the enterprises
to ensure that the enterprises operate in a safe and sound
manner, maintaining sufficient capital and reserves to
support the risks that arise in the operations and management
of the enterprises.
``(2) Federal home loan banks.--The Director shall
establish risk-based capital standards under section 6 of the
Federal Home Loan Bank Act for the Federal home loan banks.
``(b) Confidentiality of Information.--Any person that
receives any book, record, or information from the Director
or a regulated entity to enable the risk-based capital
requirements established under this section to be applied
shall--
``(1) maintain the confidentiality of the book, record, or
information in a manner that is generally consistent with the
level of confidentiality established for the material by the
Director or the regulated entity; and
``(2) be exempt from section 552 of title 5, United States
Code, with respect to the book, record, or information.
``(c) No Limitation.--Nothing in this section shall limit
the authority of the Director to require other reports or
undertakings, or take other action, in furtherance of the
responsibilities of the Director under this Act.''.
(b) Federal Home Loan Banks Risk-Based Capital.--Section
6(a)(3) of the Federal Home Loan Bank Act (12 U.S.C.
1426(a)(3)) is amended--
(1) by striking subparagraph (A) and inserting the
following new subparagraph:
``(A) Risk-based capital standards.--The Director shall, by
regulation, establish risk-based capital standards for the
Federal home loan banks to ensure that the Federal home loan
banks operate in a safe and sound manner, with sufficient
permanent capital and reserves to support the risks that
arise in the operations and management of the Federal home
loans banks.''; and
(2) in subparagraph (B), by striking ``(A)(ii)'' and
inserting ``(A)''.
SEC. 324. MINIMUM AND CRITICAL CAPITAL LEVELS.
(a) Minimum Capital Level.--Section 1362 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4612) is
amended--
(1) in subsection (a), by striking ``In General'' and
inserting ``Enterprises''; and
(2) by striking subsection (b) and inserting the following
new subsections:
``(b) Federal Home Loan Banks.--For purposes of this
subtitle, the minimum capital level for each Federal home
loan bank shall be the minimum capital required to be
maintained to comply with the leverage requirement for the
bank established under section 6(a)(2) of the Federal Home
Loan Bank Act (12 U.S.C. 1426(a)(2)).
``(c) Establishment of Revised Minimum Capital Levels.--
Notwithstanding subsections (a) and (b) and notwithstanding
the capital classifications of the regulated entities, the
Director may, by regulations issued under section 1319G,
establish a minimum capital level for the enterprises, for
the Federal home loan banks, or for both the enterprises and
the banks, that is higher than the level specified in
subsection (a) for the enterprises or the level specified in
subsection (b) for the Federal home loan banks, to the extent
needed to ensure that the regulated entities operate in a
safe and sound manner.
``(d) Authority To Require Temporary Increase.--
Notwithstanding subsections (a) and (b) and any minimum
capital level established pursuant to subsection (c), the
Director may, by order, increase the minimum capital level
for a regulated entity on a temporary basis for such period
as the Director may provide if the Director--
``(1) makes any determination specified in subparagraphs
(A) through (C) of section 1364(c)(1);
``(2) determines that the regulated entity has violated any
of the prudential standards established pursuant to section
1313A and, as a result of such violation, determines that an
unsafe and unsound condition exists; or
``(3) determines that an unsafe and unsound condition
exists, except that a temporary increase in minimum capital
imposed on a regulated entity pursuant to this paragraph
shall not remain in place for a period of more than 6 months
unless the Director makes a renewed determination of the
existence of an unsafe and unsound condition.
``(e) Authority To Establish Additional Capital and Reserve
Requirements for Particular Programs.--The Director may, at
any time by order or regulation, establish such capital or
reserve requirements with respect to any program or activity
of a regulated entity as the Director considers appropriate
to ensure that the regulated entity operates in a safe and
sound manner, with sufficient capital and reserves to support
the risks that arise in the operations and management of the
regulated entity.
``(f) Periodic Review.--The Director shall periodically
review the amount of core capital maintained by the
enterprises, the amount of capital retained by the Federal
home loan banks, and the minimum capital levels established
for such regulated entities pursuant to this section. The
Director shall rescind any temporary minimum capital level
increase if the Director determines that the circumstances or
facts justifying the temporary increase are no longer
present.''.
(b) Critical Capital Levels.--
(1) In general.--Section 1363 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4613) is amended--
(A) by striking ``For'' and inserting ``(a) Enterprises.--
For''; and
(B) by adding at the end the following new subsection:
``(b) Federal Home Loan Banks.--
``(1) In general.--For purposes of this subtitle, the
critical capital level for each Federal home loan bank shall
be such amount of capital as the Director shall, by
regulation require.
``(2) Consideration of other critical capital levels.--In
establishing the critical capital level under paragraph (1)
for the Federal home loan banks, the Director shall take due
consideration of the critical capital level established under
subsection (a) for the enterprises, with such modifications
as the Director determines to be appropriate to reflect the
difference in operations between the banks and the
enterprises.''.
(2) Regulations.--Not later than the expiration of the 180-
day period beginning on the effective date under section 365,
the Director of the Federal Housing Finance Agency shall
issue regulations pursuant to section 1363(b) of the Housing
and Community Development Act of 1992 (as added by paragraph
(1) of this subsection) establishing the critical capital
level under such section.
SEC. 325. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND
LIABILITIES.
(a) In General.--Subtitle B of title XIII of the Housing
and Community Development Act of 1992 (12 U.S.C. 4611 et
seq.) is amended--
(1) by striking the subtitle designation and heading and
inserting the following:
``Subtitle B--Required Capital Levels for Regulated Entities, Special
Enforcement Powers, and Reviews of Assets and Liabilities'';
and
(2) by adding at the end the following new section:
``SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABILITIES.
``(a) In General.--The Director shall, by regulation,
establish standards by which the portfolio holdings, or rate
of growth of the portfolio holdings, of the enterprises will
be deemed to be consistent with the mission and the safe and
sound operations of the enterprises. In developing such
standards, the Director shall consider--
[[Page H3241]]
``(1) the size or growth of the mortgage market;
``(2) the need for the portfolio in maintaining liquidity
or stability of the secondary mortgage market (including the
market for the mortgage-backed securities the enterprises
issue);
``(3) the need for an inventory of mortgages in connection
with securitizations;
``(4) the need for the portfolio to directly support the
affordable housing mission of the enterprises;
``(5) the liquidity needs of the enterprises;
``(6) any potential risks posed to the enterprises by the
nature of the portfolio holdings; and
``(7) any additional factors that the Director determines
to be necessary to carry out the purpose under the first
sentence of this subsection to establish standards for
assessing whether the portfolio holdings are consistent with
the mission and safe and sound operations of the enterprises.
``(b) Temporary Adjustments.--The Director may, by order,
make temporary adjustments to the established standards for
an enterprise or both enterprises, such as during times of
economic distress or market disruption.
``(c) Authority To Require Disposition or Acquisition.--The
Director shall monitor the portfolio of each enterprise.
Pursuant to subsection (a) and notwithstanding the capital
classifications of the enterprises, the Director may, by
order, require an enterprise, under such terms and conditions
as the Director determines to be appropriate, to dispose of
or acquire any asset, if the Director determines that such
action is consistent with the purposes of this Act or any of
the authorizing statutes.''.
(b) Regulations.--Not later than the expiration of the 180-
day period beginning on the effective date under section 365,
the Director of the Federal Housing Finance Agency shall
issue regulations pursuant to section 1369E(a) of the Housing
and Community Development Act of 1992 (as added by subsection
(a) of this section) establishing the portfolio holdings
standards under such section.
SEC. 326. CORPORATE GOVERNANCE OF ENTERPRISES.
The Housing and Community Development Act of 1992 is
amended by inserting before section 1323 (12 U.S.C. 4543) the
following new section:
``SEC. 1322A. CORPORATE GOVERNANCE OF ENTERPRISES.
``(a) Board of Directors.--
``(1) Independence.--A majority of seated members of the
board of directors of each enterprise shall be independent
board members, as defined under rules set forth by the New
York Stock Exchange, as such rules may be amended from time
to time.
``(2) Frequency of meetings.--To carry out its obligations
and duties under applicable laws, rules, regulations, and
guidelines, the board of directors of an enterprise shall
meet at least eight times a year and not less than once a
calendar quarter.
``(3) Non-management board member meetings.--The non-
management directors of an enterprise shall meet at regularly
scheduled executive sessions without management
participation.
``(4) Quorum; prohibition on proxies.--For the transaction
of business, a quorum of the board of directors of an
enterprise shall be at least a majority of the seated board
of directors and a board member may not vote by proxy.
``(5) Information.--The management of an enterprise shall
provide a board member of the enterprise with such adequate
and appropriate information that a reasonable board member
would find important to the fulfillment of his or her
fiduciary duties and obligations.
``(6) Annual review.--At least annually, the board of
directors of each enterprise shall review, with appropriate
professional assistance, the requirements of laws, rules,
regulations, and guidelines that are applicable to its
activities and duties.
``(b) Committees of Boards of Directors.--
``(1) Frequency of meetings.--Any committee of the board of
directors of an enterprise shall meet with sufficient
frequency to carry out its obligations and duties under
applicable laws, rules, regulations, and guidelines.
``(2) Required committees.--Each enterprise shall provide
for the establishment, however styled, of the following
committees of the board of directors:
``(A) Audit committee.
``(B) Compensation committee.
``(C) Nominating/corporate governance committee.
Such committees shall be in compliance with the charter,
independence, composition, expertise, duties,
responsibilities, and other requirements set forth under
section 10A(m) of the Securities Exchange Act of 1934 (15
U.S.C. 78j-1(m)), with respect to the audit committee, and
under rules issued by the New York Stock Exchange, as such
rules may be amended from time to time.
``(c) Compensation.--
``(1) In general.--The compensation of board members,
executive officers, and employees of an enterprise--
``(A) shall not be in excess of that which is reasonable
and appropriate;
``(B) shall be commensurate with the duties and
responsibilities of such persons;
``(C) shall be consistent with the long-term goals of the
enterprise;
``(D) shall not focus solely on earnings performance, but
shall take into account risk management, operational
stability and legal and regulatory compliance as well; and
``(E) shall be undertaken in a manner that complies with
applicable laws, rules, and regulations.
``(2) Reimbursement.--If an enterprise is required to
prepare an accounting restatement due to the material
noncompliance of the enterprise, as a result of misconduct,
with any financial reporting requirement under the securities
laws, the chief executive officer and chief financial officer
of the enterprise shall reimburse the enterprise as provided
under section 304 of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7243). This provision does not otherwise limit the
authority of the Agency to employ remedies available to it
under its enforcement authorities.
``(d) Code of Conduct and Ethics.--
``(1) In general.--An enterprise shall establish and
administer a written code of conduct and ethics that is
reasonably designed to assure the ability of board members,
executive officers, and employees of the enterprise to
discharge their duties and responsibilities, on behalf of the
enterprise, in an objective and impartial manner, and that
includes standards required under section 406 of the
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7264) and other
applicable laws, rules, and regulations.
``(2) Review.--Not less than once every three years, an
enterprise shall review the adequacy of its code of conduct
and ethics for consistency with practices appropriate to the
enterprise and make any appropriate revisions to such code.
``(e) Conduct and Responsibilities of Board of Directors.--
The board of directors of an enterprise shall be responsible
for directing the conduct and affairs of the enterprise in
furtherance of the safe and sound operation of the enterprise
and shall remain reasonably informed of the condition,
activities, and operations of the enterprise. The
responsibilities of the board of directors shall include
having in place adequate policies and procedures to assure
its oversight of, among other matters, the following:
``(1) Corporate strategy, major plans of action, risk
policy, programs for legal and regulatory compliance and
corporate performance, including prudent plans for growth and
allocation of adequate resources to manage operations risk.
``(2) Hiring and retention of qualified executive officers
and succession planning for such executive officers.
``(3) Compensation programs of the enterprise.
``(4) Integrity of accounting and financial reporting
systems of the enterprise, including independent audits and
systems of internal control.
``(5) Process and adequacy of reporting, disclosures, and
communications to shareholders, investors, and potential
investors.
``(6) Extensions of credit to board members and executive
officers.
``(7) Responsiveness of executive officers in providing
accurate and timely reports to Federal regulators and in
addressing the supervisory concerns of Federal regulators in
a timely and appropriate manner.
``(f) Prohibition of Extensions of Credit.--An enterprise
may not directly or indirectly, including through any
subsidiary, extend or maintain credit, arrange for the
extension of credit, or renew an extension of credit, in the
form of a personal loan to or for any board member or
executive officer of the enterprise, as provided by section
13(k) of the Securities Exchange Act of 1934 (15 U.S.C.
78m(k)).
``(g) Certification of Disclosures.--The chief executive
officer and the chief financial officer of an enterprise
shall review each quarterly report and annual report issued
by the enterprise and such reports shall include
certifications by such officers as required by section 302 of
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241).
``(h) Change of Audit Partner.--An enterprise may not
accept audit services from an external auditing firm if the
lead or coordinating audit partner who has primary
responsibility for the external audit of the enterprise, or
the external audit partner who has responsibility for
reviewing the external audit has performed audit services for
the enterprise in each of the five previous fiscal years.
``(i) Compliance Program.--
``(1) Requirement.--Each enterprise shall establish and
maintain a compliance program that is reasonably designed to
assure that the enterprise complies with applicable laws,
rules, regulations, and internal controls.
``(2) Compliance officer.--The compliance program of an
enterprise shall be headed by a compliance officer, however
styled, who reports directly to the chief executive officer
of the enterprise. The compliance officer shall report
regularly to the board of directors or an appropriate
committee of the board of directors on compliance with and
the adequacy of current compliance policies and procedures of
the enterprise, and shall recommend any adjustments to such
policies and procedures that the compliance officer considers
necessary and appropriate.
``(j) Risk Management Program.--
``(1) Requirement.--Each enterprise shall establish and
maintain a risk management program that is reasonably
designed to manage the risks of the operations of the
enterprise.
``(2) Risk management officer.--The risk management program
of an enterprise shall
[[Page H3242]]
be headed by a risk management officer, however styled, who
reports directly to the chief executive officer of the
enterprise. The risk management officer shall report
regularly to the board of directors or an appropriate
committee of the board of directors on compliance with and
the adequacy of current risk management policies and
procedures of the enterprise, and shall recommend any
adjustments to such policies and procedures that the risk
management officer considers necessary and appropriate.
``(k) Compliance With Other Laws.--
``(1) Deregistered or unregistered common stock.--If an
enterprise deregisters or has not registered its common stock
with the Securities and Exchange Commission under the
Securities Exchange Act of 1934, the enterprise shall comply
or continue to comply with sections 10A(m) and 13(k) of the
Securities Exchange Act of 1934 (15 U.S.C. 78j-1(m), 78m(k))
and sections 302, 304, and 406 of the Sarbanes-Oxley Act of
2002 (15 U.S.C. 7241, 7243, 7264), subject to such
requirements as provided by subsection (l) of this section.
``(2) Registered common stock.--An enterprise that has its
common stock registered with the Securities and Exchange
Commission shall maintain such registered status, unless it
provides 60 days prior written notice to the Director stating
its intent to deregister and its understanding that it will
remain subject to the requirements of the sections of the
Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of
2002, subject to such requirements as provided by subsection
(l) of this section.
``(l) Other Matters.--The Director may from time to time
establish standards, by regulation, order, or guideline,
regarding such other corporate governance matters of the
enterprises as the Director considers appropriate.
``(m) Modification of Standards.--In connection with
standards of Federal or State law (including the Revised
Model Corporation Act) or New York Stock Exchange rules that
are made applicable to an enterprise by section 1710.10 of
the Director's rules (12 CFR 1710.10) and by subsections (a),
(b), (g), (i), (j), and (k) of this section, the Director, in
the Director's sole discretion, may modify the standards
contained in this section or in part 1710 of the Director's
rules (12 CFR Part 1710) in accordance with section 553 of
title 5, United States Code, and upon written notice to the
enterprise.''.
SEC. 327. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT
OF 1934.
The Housing and Community Development Act of 1992 is
amended by adding after section 1322A, as added by the
preceding provisions of this title, the following new
section:
``SEC. 1322B. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE
ACT OF 1934.
``(a) In General.--Each regulated entity shall register at
least one class of the capital stock of such regulated
entity, and maintain such registration with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934.
``(b) Enterprises.--Each enterprise shall comply with
sections 14 and 16 of the Securities Exchange Act of 1934.''.
SEC. 328. LIAISON WITH FINANCIAL INSTITUTIONS EXAMINATION
COUNCIL.
Section 1007 of the Federal Financial Institutions
Examination Council Act of 1978 (12 U.S.C. 3306) is amended--
(1) in the section heading, by inserting after ``state''
the following: ``and federal housing finance agency''; and
(2) by inserting after ``financial institutions'' the
following: ``, and one representative of the Federal Housing
Finance Agency,''.
SEC. 329. GUARANTEE FEE STUDY.
(a) In General.--The Director of the Federal Housing
Finance Agency, in consultation with the heads of the federal
banking agencies, shall, not later than 18 months after the
date of the enactment of this Act, submit to the Congress a
study concerning the pricing, transparency and reporting of
the Federal National Mortgage Association, the Federal Home
Loan Mortgage Corporation, and the Federal home loan banks
with regard to guarantee fees and concerning analogous
practices, transparency and reporting requirements (including
advances pricing practices by the Federal Home Loan Banks) of
other participants in the business of mortgage purchases and
securitization.
(b) Factors.--The study required by this section shall
examine various factors such as credit risk, counterparty
risk considerations, economic value considerations, and
volume considerations used by the regulated entities (as such
term is defined in section 1303 of the Housing and Community
Development Act of 1992) included in the study in setting the
amount of fees they charge.
(c) Contents of Report.--The report required under
subsection (a) shall identify and analyze--
(1) the factors used by each enterprise (as such term is
defined in section 1303 of the Housing and Community
Development Act of 1992) in determining the amount of the
guarantee fees it charges;
(2) the total revenue the enterprises earn from guarantee
fees;
(3) the total costs incurred by the enterprises for
providing guarantees;
(4) the average guarantee fee charged by the enterprises;
(5) an analysis of how and why the guarantee fees charged
differ from such fees charged during the previous year;
(6) a breakdown of the revenue and costs associated with
providing guarantees, based on product type and risk
classifications; and
(7) other relevant information on guarantee fees with other
participants in the mortgage and securitization business.
(d) Protection of Information.--Nothing in this section may
be construed to require or authorize the Director of the
Federal Housing Finance Agency, in connection with the study
mandated by this section, to disclose information of the
enterprises or other organization that is confidential or
proprietary.
(e) Effective Date.--This section shall take effect on the
date of the enactment of this Act.
SEC. 330. CONFORMING AMENDMENTS.
(a) 1992 Act.--Part 1 of subtitle A of title XIII of the
Housing and Community Development Act of 1992 (12 U.S.C. 4511
et seq.), as amended by the preceding provisions of this
title, is further amended--
(1) by striking ``an enterprise'' each place such term
appears in such part (except in sections 1313(a)(2)(A),
1313A(b)(2)(B)(ii)(I), and 1316(b)(3)) and inserting ``a
regulated entity'';
(2) by striking ``the enterprise'' each place such term
appears in such part (except in section 1316(b)(3)) and
inserting ``the regulated entity'';
(3) by striking ``the enterprises'' each place such term
appears in such part (except in sections 1312(c)(2), and
1312(e)(2)) and inserting ``the regulated entities'';
(4) by striking ``each enterprise'' each place such term
appears in such part and inserting ``each regulated entity'';
(5) by striking ``Office'' each place such term appears in
such part (except in sections 1311(b)(2), 1312(b)(5),
1315(b), and 1316(a)(4), (g), and (h), 1317(c), and 1319A(a))
and inserting ``Agency'';
(6) in section 1315 (12 U.S.C. 4515)--
(A) in subsection (a)--
(i) in the subsection heading, by striking ``Office
Personnel'' and inserting ``In General''; and
(ii) by striking ``The'' and inserting ``Subject to
subtitle C of the Federal Housing Finance Reform Act of 2008,
the'';
(B) by striking subsections (d) and (f); and
(C) by redesignating subsection (e) as subsection (d);
(7) in section 1319B (12 U.S.C. 4521), by striking
``Committee on Banking, Finance and Urban Affairs'' each
place such term appears and inserting ``Committee on
Financial Services''; and
(8) in section 1319F (12 U.S.C. 4525), striking all that
follows ``United States Code'' and inserting ``, the Agency
shall be considered an agency responsible for the regulation
or supervision of financial institutions.''.
(b) Amendments to Fannie Mae Charter Act.--The Federal
National Mortgage Association Charter Act (12 U.S.C. 1716 et
seq.) is amended--
(1) by striking ``Director of the Office of Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development'' each place such term appears, and inserting
``Director of the Federal Housing Finance Agency'', in--
(A) section 303(c)(2) (12 U.S.C. 1718(c)(2));
(B) section 309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)); and
(C) section 309(k)(1); and
(2) in section 309--
(A) in subsections (d)(3)(A) and (n)(1), by striking
``Banking, Finance and Urban Affairs'' each place such term
appears and inserting ``Financial Services''; and
(B) in subsection (m)--
(i) in paragraph (1), by striking ``Secretary'' the second
place such term appears and inserting ``Director'';
(ii) in paragraph (2), by striking ``Secretary'' the second
place such term appears and inserting ``Director''; and
(iii) by striking ``Secretary'' each other place such term
appears and inserting ``Director of the Federal Housing
Finance Agency''; and
(C) in subsection (n), by striking ``Secretary'' each place
such term appears and inserting ``Director of the Federal
Housing Finance Agency''.
(c) Amendments to Freddie Mac Act.--The Federal Home Loan
Mortgage Corporation Act is amended--
(1) by striking ``Director of the Office of Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development'' each place such term appears, and inserting
``Director of the Federal Housing Finance Agency'', in--
(A) section 303(b)(2) (12 U.S.C. 1452(b)(2));
(B) section 303(h)(2) (12 U.S.C. 1452(h)(2)); and
(C) section 307(c)(1) (12 U.S.C. 1456(c)(1));
(2) in sections 303(h)(1) and 307(f)(1) (12 U.S.C.
1452(h)(1), 1456(f)(1)), by striking ``Banking, Finance and
Urban Affairs'' each place such term appears and inserting
``Financial Services'';
(3) in section 306(i) (12 U.S.C. 1455(i))--
(A) by striking ``1316(c)'' and inserting ``306(c)''; and
(B) by striking ``section 106'' and inserting ``section
1316''; and
(4) in section 307 (12 U.S.C. 1456))--
(A) in subsection (e)--
(i) in paragraph (1), by striking ``Secretary'' the second
place such term appears and inserting ``Director'';
(ii) in paragraph (2), by striking ``Secretary'' the second
place such term appears and inserting ``Director''; and
[[Page H3243]]
(iii) by striking ``Secretary'' each other place such term
appears and inserting ``Director of the Federal Housing
Finance Agency''; and
(B) in subsection (f), by striking ``Secretary'' each place
such term appears and inserting ``Director of the Federal
Housing Finance Agency''.
CHAPTER 2--IMPROVEMENT OF MISSION SUPERVISION
SEC. 331. TRANSFER OF PRODUCT APPROVAL AND HOUSING GOAL
OVERSIGHT.
Part 2 of subtitle A of title XIII of the Housing and
Community Development Act of 1992 (12 U.S.C. 4541 et seq.) is
amended--
(1) by striking the designation and heading for the part
and inserting the following:
``PART 2--PRODUCT APPROVAL BY DIRECTOR, CORPORATE GOVERNANCE, AND
ESTABLISHMENT OF HOUSING GOALS'';
and
(2) by striking sections 1321 and 1322.
SEC. 332. REVIEW OF ENTERPRISE PRODUCTS.
(a) In General.--Part 2 of subtitle A of title XIII of the
Housing and Community Development Act of 1992 is amended by
inserting before section 1323 (12 U.S.C. 4543) the following
new section:
``SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS OF
ENTERPRISES.
``(a) In General.--The Director shall require each
enterprise to obtain the approval of the Director for any
product of the enterprise before initially offering the
product.
``(b) Standard for Approval.--In considering any request
for approval of a product pursuant to subsection (a), the
Director shall make a determination that--
``(1) in the case of a product of the Federal National
Mortgage Association, the Director determines that the
product is authorized under paragraph (2), (3), (4), or (5)
of section 302(b) or section 304 of the Federal National
Mortgage Association Charter Act, (12 U.S.C. 1717(b), 1719);
``(2) in the case of a product of the Federal Home Loan
Mortgage Corporation, the Director determines that the
product is authorized under paragraph (1), (4), or (5) of
section 305(a) of the Federal Home Loan Mortgage Corporation
Act (12 U.S.C. 1454(a));
``(3) the product is in the public interest;
``(4) the product is consistent with the safety and
soundness of the enterprise or the mortgage finance system;
and
``(5) the product does not materially impair the efficiency
of the mortgage finance system.
``(c) Procedure for Approval.--
``(1) Submission of request.--An enterprise shall submit to
the Director a written request for approval of a product that
describes the product in such form as prescribed by order or
regulation of the Director.
``(2) Request for public comment.--Immediately upon receipt
of a request for approval of a product, as required under
paragraph (1), the Director shall publish notice of such
request and of the period for public comment pursuant to
paragraph (3) regarding the product, and a description of the
product proposed by the request. The Director shall give
interested parties the opportunity to respond in writing to
the proposed product.
``(3) Public comment period.--During the 30-day period
beginning on the date of publication pursuant to paragraph
(2) of a request for approval of a product, the Director
shall receive public comments regarding the proposed product.
``(4) Offering of product.--
``(A) In general.--Not later than 30 days after the close
of the public comment period described in paragraph (3), the
Director shall approve or deny the product, specifying the
grounds for such decision in writing.
``(B) Failure to act.--If the Director fails to act within
the 30-day period described in subparagraph (A), the
enterprise may offer the product.
``(d) Expedited Review.--
``(1) Determination and notice.--If an enterprise
determines that any new activity, service, undertaking, or
offering is not a product, as defined in subsection (f), the
enterprise shall provide written notice to the Director prior
to the commencement of such activity, service, undertaking,
or offering.
``(2) Director determination of applicable procedure.--
Immediately upon receipt of any notice pursuant to paragraph
(1), the Director shall make a determination under paragraph
(3).
``(3) Determination and treatment as product.--If the
Director determines that any new activity, service,
undertaking, or offering consists of, relates to, or involves
a product--
``(A) the Director shall notify the enterprise of the
determination;
``(B) the new activity, service, undertaking, or offering
described in the notice under paragraph (1) shall be
considered a product for purposes of this section; and
``(C) the enterprise shall withdraw its request or submit a
written request for approval of the product pursuant to
subsection (c).
``(e) Conditional Approval.--The Director may conditionally
approve the offering of any product by an enterprise, and may
establish terms, conditions, or limitations with respect to
such product with which the enterprise must comply in order
to offer such product.
``(f) Definition of Product.--For purposes of this section,
the term `product' does not include--
``(1) the automated loan underwriting system of an
enterprise in existence as of the date of the enactment of
the Federal Housing Finance Reform Act of 2008, including any
upgrade to the technology, operating system, or software to
operate the underwriting system; or
``(2) any modification to the mortgage terms and conditions
or mortgage underwriting criteria relating to the mortgages
that are purchased or guaranteed by an enterprise: Provided,
That such modifications do not alter the underlying
transaction so as to include services or financing, other
than residential mortgage financing, or create significant
new exposure to risk for the enterprise or the holder of the
mortgage.
``(g) No Limitation.--Nothing in this section shall be
deemed to restrict--
``(1) the safety and soundness authority of the Director
over all new and existing products or activities; or
``(2) the authority of the Director to review all new and
existing products or activities to determine that such
products or activities are consistent with the statutory
mission of the enterprise.''.
(b) Conforming Amendments.--
(1) Fannie mae.--Section 302(b)(6) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1717(b)(6)) is
amended--
(A) by striking ``implement any new program'' and inserting
``initially offer any product'';
(B) by striking ``section 1303'' and inserting ``section
1321(f)''; and
(C) by striking ``before obtaining the approval of the
Secretary under section 1322'' and inserting ``except in
accordance with section 1321''.
(2) Freddie mac.--Section 305(c) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1454(c)) is amended--
(A) by striking ``implement any new program'' and inserting
``initially offer any product'';
(B) by striking ``section 1303'' and inserting ``section
1321(f)''; and
(C) by striking ``before obtaining the approval of the
Secretary under section 1322'' and inserting ``except in
accordance with section 1321''.
(3) 1992 act.--Section 1303 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4502), as amended by the
preceding provisions of this title, is further amended--
(A) by striking paragraph (17) (relating to the definition
of ``new program''); and
(B) by redesignating paragraphs (18) through (23) as
paragraphs (17) through (22), respectively.
SEC. 333. CONFORMING LOAN LIMITS.
(a) Fannie Mae.--Section 302(b)(2) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) is
amended--
(1) in the second sentence, by redesignating clause (A)
through (C) as clauses (i) through (iii), respectively;
(2) in the third sentence, by striking ``clause (A)'' and
inserting ``clause (i)'';
(3) in the 4th sentence, by striking ``the Resolution Trust
Corporation,'';
(4) by striking the 7th and 8th sentences and inserting the
following new sentences: ``For 2008, such limitations shall
not exceed $417,000 for a mortgage secured by a single-family
residence, $533,850 for a mortgage secured by a 2-family
residence, $645,300 for a mortgage secured by a 3-family
residence, and $801,950 for a mortgage secured by a 4-family
residence, except that such maximum limitations shall be
adjusted effective January 1 of each year beginning with
2009, subject to the limitations in this paragraph. Each
adjustment shall be made by adding to or subtracting from
each such amount (as it may have been previously adjusted) a
percentage thereof equal to the percentage increase or
decrease, during the most recent 12-month or four-quarter
period ending before the time of determining such annual
adjustment, in the housing price index maintained by the
Director of the Federal Housing Finance Agency (pursuant to
section 1322 of the Housing and Community Development Act of
1992 (12 U.S.C. 4541)).''.
(5) by inserting ``(A)'' after ``(2)''; and
(6) by adding at the end the following new subparagraph:
``(B)(i) Notwithstanding subparagraph (A), for mortgages
originated on or after January 1, 2009, the limitation on the
maximum original principal obligation of a mortgage that may
be purchased by the corporation shall be the higher of--
``(I) the limitation determined under subparagraph (A) for
a residence of the applicable size; or
``(II) 125 percent of the area median price for a residence
of the applicable size, but in no case to exceed 175 percent
of the limitation determined under subparagraph (A) for a
residence of the applicable size.
``(ii) The areas and area median prices used for purposes
of the determination under this subparagraph shall be the
areas and area median prices used by the Secretary of Housing
and Urban Development in determining the applicable limits
under section 203(b)(2) of the National Housing Act (12
U.S.C. 1709(b)(2)). A mortgage that is eligible for purchase
by the corporation at the time the mortgage is originated
under this subparagraph shall be eligible for such purchase
for the duration of the term of the mortgage.''.
(b) Freddie Mac.--Section 305(a)(2) of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is
amended--
[[Page H3244]]
(1) in the first sentence, by redesignating clause (A)
through (C) as clauses (i) through (iii), respectively;
(2) in the second sentence, by striking ``clause (A)'' and
inserting ``clause (i)'';
(3) in the third sentence by striking ``the Resolution
Trust Corporation'';
(4) by striking the 6th and 7th sentence and inserting the
following new sentences: ``For 2008, such limitations shall
not exceed $417,000 for a mortgage secured by a single-family
residence, $533,850 for a mortgage secured by a 2-family
residence, $645,300 for a mortgage secured by a 3-family
residence, and $801,950 for a mortgage secured by a 4-family
residence, except that such maximum limitations shall be
adjusted effective January 1 of each year beginning with
2009, subject to the limitations in this paragraph. Each
adjustment shall be made by adding to or subtracting from
each such amount (as it may have been previously adjusted) a
percentage thereof equal to the percentage increase or
decrease, during the most recent 12-month or four-quarter
period ending before the time of determining such annual
adjustment, in the housing price index maintained by the
Director of the Federal Housing Finance Agency (pursuant to
section 1322 of the Housing and Community Development Act of
1992 (12 U.S.C. 4541)).'';
(5) by inserting ``(A)'' after ``(2)''; and
(6) by adding at the end the following new subparagraph:
``(B)(i) Notwithstanding subparagraph (A), for mortgages
originated on or after January 1, 2009, the limitation on the
maximum original principal obligation of a mortgage that may
be purchased by the Corporation shall be the higher of--
``(I) the limitation determined under subparagraph (A) for
a residence of the applicable size; or
``(II) 125 percent of the area median price for a residence
of the applicable size, but in no case to exceed 175 percent
of the limitation determined under subparagraph (A) for a
residence of the applicable size.
``(ii) The areas and area median prices used for purposes
of the determination under this subparagraph shall be the
areas and area median prices used by the Secretary of Housing
and Urban Development in determining the applicable limits
under section 203(b)(2) of the National Housing Act (12
U.S.C. 1709(b)(2)). A mortgage that is eligible for purchase
by the Corporation at the time the mortgage is originated
under this subparagraph shall be eligible for such purchase
for the duration of the term of the mortgage.''.
(c) Housing Price Index.--Subpart A of part 2 of subtitle A
of title XIII of the Housing and Community Development Act of
1992 (as amended by the preceding provisions of this title)
is amended by inserting after section 1321 (as added by the
preceding provisions of this title) the following new
section:
``SEC. 1322. HOUSING PRICE INDEX.
``(a) In General.--The Director shall establish and
maintain a method of assessing the national average 1-family
house price for use for adjusting the conforming loan
limitations of the enterprises. In establishing such method,
the Director shall take into consideration the monthly survey
of all major lenders conducted by the Federal Housing Finance
Agency to determine the national average 1-family house
price, the House Price Index maintained by the Office of
Federal Housing Enterprise Oversight of the Department of
Housing and Urban Development before the effective date under
section 365 of the Federal Housing Finance Reform Act of
2008, any appropriate house price indexes of the Bureau of
the Census of the Department of Commerce, and any other
indexes or measures that the Director considers appropriate.
``(b) GAO Audit.--
``(1) In general.--At such times as are required under
paragraph (2), the Comptroller General of the United States
shall conduct an audit of the methodology established by the
Director under subsection (a) to determine whether the
methodology established is an accurate and appropriate means
of measuring changes to the national average 1-family house
price.
``(2) Timing.--An audit referred to in paragraph (1) shall
be conducted and completed not later than the expiration of
the 180-day period that begins upon each of the following
dates:
``(A) Establishment.--The date upon which such methodology
is initially established under subsection (a) in final form
by the Director.
``(B) Modification or amendment.--Each date upon which any
modification or amendment to such methodology is adopted in
final form by the Director.
``(3) Report.--Within 30 days of the completion of any
audit conducted under this subsection, the Comptroller
General shall submit a report detailing the results and
conclusions of the audit to the Director, the Committee on
Financial Services of the House of Representatives, and the
Committee on Banking, Housing, and Urban Affairs of the
Senate.''.
(d) Sense of Congress.--It is the sense of the Congress
that the securitization of mortgages by the Federal National
Mortgage Association and the Federal Home Loan Mortgage
Corporation plays an important role in providing liquidity to
the United States housing markets. Therefore, the Congress
encourages the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation to securitize
mortgages acquired under the increased conforming loan limits
established by the amendments made by this section, to the
extent that such securitizations can be effected in a timely
and efficient manner that does not impose additional costs
for mortgages originated, purchased, or securitized under the
existing limits or interfere with the goal of adding
liquidity to the market.
(e) Effective Date.--The amendments made by this section
shall take effect on, and shall apply beginning on, January
1, 2009.
SEC. 334. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.
(a) In General.--The Housing and Community Development Act
of 1992 is amended by striking section 1324 (12 U.S.C. 4544)
and inserting the following new section:
``SEC. 1324. ANNUAL HOUSING REPORT REGARDING REGULATED
ENTITIES.
``(a) In General.--After reviewing and analyzing the
reports submitted under section 309(n) of the Federal
National Mortgage Association Charter Act, section 307(f) of
the Federal Home Loan Mortgage Corporation Act, and section
10(j)(11) of the Federal Home Loan Bank Act (12 U.S.C.
1430(j)(11)), the Director shall submit a report, not later
than October 30 of each year, to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate, on the
activities of each regulated entity.
``(b) Contents.--The report shall--
``(1) discuss the extent to which--
``(A) each enterprise is achieving the annual housing goals
established under subpart B of this part;
``(B) each enterprise is complying with section 1337;
``(C) each Federal home loan bank is complying with section
10(j) of the Federal Home Loan Bank Act; and
``(D) each regulated entity is achieving the purposes of
the regulated entity established by law;
``(2) aggregate and analyze relevant data on income to
assess the compliance by each enterprise with the housing
goals established under subpart B;
``(3) aggregate and analyze data on income, race, and
gender by census tract and other relevant classifications,
and compare such data with larger demographic, housing, and
economic trends;
``(4) examine actions that--
``(A) each enterprise has undertaken or could undertake to
promote and expand the annual goals established under subpart
B and the purposes of the enterprise established by law; and
``(B) each Federal home loan bank has taken or could
undertake to promote and expand the community investment
program and affordable housing program of the bank
established under subsections (i) and (j) of section 10 of
the Federal Home Loan Bank Act;
``(5) examine the primary and secondary multifamily housing
mortgage markets and describe--
``(A) the availability and liquidity of mortgage credit;
``(B) the status of efforts to provide standard credit
terms and underwriting guidelines for multifamily housing and
to securitize such mortgage products; and
``(C) any factors inhibiting such standardization and
securitization;
``(6) examine actions each regulated entity has undertaken
and could undertake to promote and expand opportunities for
first-time homebuyers, including the use of alternative
credit scoring;
``(7) describe any actions taken under section 1325(5) with
respect to originators found to violate fair lending
procedures;
``(8) discuss and analyze existing conditions and trends,
including conditions and trends relating to pricing, in the
housing markets and mortgage markets; and
``(9) identify the extent to which each enterprise is
involved in mortgage purchases and secondary market
activities involving subprime loans (as identified in
accordance with the regulations issued pursuant to section
334(b) of the Federal Housing Finance Reform Act of 2008) and
compare the characteristics of subprime loans purchased and
securitized by the enterprises to other loans purchased and
securitized by the enterprises.
``(c) Data Collection and Reporting.--
``(1) In general.--To assist the Director in analyzing the
matters described in subsection (b) and establishing the
methodology described in section 1322, the Director shall
conduct, on a monthly basis, a survey of mortgage markets in
accordance with this subsection.
``(2) Data points.--Each monthly survey conducted by the
Director under paragraph (1) shall collect data on--
``(A) the characteristics of individual mortgages that are
eligible for purchase by the enterprises and the
characteristics of individual mortgages that are not eligible
for purchase by the enterprises including, in both cases,
information concerning--
``(i) the price of the house that secures the mortgage;
``(ii) the loan-to-value ratio of the mortgage, which shall
reflect any secondary liens on the relevant property;
``(iii) the terms of the mortgage;
``(iv) the creditworthiness of the borrower or borrowers;
and
``(v) whether the mortgage, in the case of a conforming
mortgage, was purchased by an enterprise; and
``(B) such other matters as the Director determines to be
appropriate.
``(3) Public availability.--The Director shall make any
data collected by the Director in connection with the conduct
of a
[[Page H3245]]
monthly survey available to the public in a timely manner,
provided that the Director may modify the data released to
the public to ensure that the data is not released in an
identifiable form.
``(4) Definition.--For purposes of this subsection, the
term `identifiable form' means any representation of
information that permits the identity of a borrower to which
the information relates to be reasonably inferred by either
direct or indirect means.''.
(b) Standards for Subprime Loans.--The Director shall, not
later than one year after the effective date under section
365, by regulations issued under section 1316G of the Housing
and Community Development Act of 1992, establish standards by
which mortgages purchased and mortgages purchased and
securitized shall be characterized as subprime for the
purpose of, and only for the purpose of, complying with the
reporting requirement under section 1324(b)(9) of such Act.
SEC. 335. ANNUAL REPORTS BY REGULATED ENTITIES ON AFFORDABLE
HOUSING STOCK.
The Housing and Community Development Act of 1992 is
amended by inserting after section 1328 (12 U.S.C. 4548) the
following new section:
``SEC. 1329. ANNUAL REPORTS ON AFFORDABLE HOUSING STOCK.
``(a) In General.--To obtain information helpful in
applying the formula under section 1337(c)(2) for the
affordable housing program under such section and for other
appropriate uses, the regulated entities shall conduct, or
provide for the conducting of, a study on an annual basis to
determine the levels of affordable housing inventory, and the
changes in such levels, in communities throughout the United
States.
``(b) Contents.--The annual study under this section shall
determine, for the United States, each State, and each
community within each State--
``(1) the level of affordable housing inventory, including
affordable rental dwelling units and affordable homeownership
dwelling units;
``(2) any changes to the level of such inventory during the
12-month period of the study under this section, including--
``(A) any additions to such inventory, disaggregated by the
category of such additions (including new construction or
housing conversion);
``(B) any subtractions from such inventory, disaggregated
by the category of such subtractions (including abandonment,
demolition, or upgrade to market-rate housing);
``(C) the number of new affordable dwelling units placed in
service; and
``(D) the number of affordable housing dwelling units
withdrawn from service;
``(3) the types of financing used to build any dwelling
units added to such inventory level and the period during
which such units are required to remain affordable;
``(4) any excess demand for affordable housing, including
the number of households on rental housing waiting lists and
the tenure of the wait on such lists; and
``(5) such other information as the Director may require.
``(c) Report.--For each annual study conducted pursuant to
this section, the regulated entities shall submit to the
Congress, and make publicly available, a report setting forth
the findings of the study.
``(d) Regulations and Timing.--The Director shall, by
regulation, establish requirements for the studies and
reports under this section, including deadlines for the
submission of such annual reports and standards for
determining affordable housing.''.
SEC. 336. MORTGAGOR IDENTIFICATION REQUIREMENTS FOR MORTGAGES
OF REGULATED ENTITIES.
(a) In General.--Subpart A of part 2 of subtitle A of title
XIII of the Housing and Community Development Act of 1992 (12
U.S.C. 4541 et seq.), as amended by the preceding provisions
of this title, is further amended by adding at the end the
following new section:
``SEC. 1330. MORTGAGOR IDENTIFICATION REQUIREMENTS FOR
MORTGAGES OF REGULATED ENTITIES.
``(a) Limitation.--The Director shall by regulation
establish standards, and shall enforce compliance with such
standards, that--
``(1) prohibit the enterprises from the purchase, service,
holding, selling, lending on the security of, or otherwise
dealing with any mortgage on a one- to four-family residence
that will be used as the principal residence of the mortgagor
that does not meet the requirements under subsection (b); and
``(2) prohibit the Federal home loan banks from providing
any advances to a member for use in financing, and from
accepting as collateral for any advance to a member, any
mortgage on a one- to four-family residence that will be used
as the principal residence of the mortgagor that does not
meet the requirements under subsection (b).
``(b) Identification Requirements.--The requirements under
this subsection with respect to a mortgage are that the
mortgagor have, at the time of settlement on the mortgage, a
Social Security account number.''.
(b) Fannie Mae.--Section 304 of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1719) is amended
by adding at the end the following new subsection:
``(g) Prohibition Regarding Mortgagor Identification
Requirement.--Nothing in this Act may be construed to
authorize the corporation to purchase, service, hold, sell,
lend on the security of, or otherwise deal with any mortgage
that the corporation is prohibited from so dealing with under
the standards issued under section 1330 of the Housing and
Community Development Act of 1992 by the Director of the
Federal Housing Finance Agency.''.
(c) Freddie Mac.--Section 305 of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1454) is amended by
adding at the end the following new subsection:
``(d) Prohibition Regarding Mortgagor Identification
Requirements.--Nothing in this Act may be construed to
authorize the Corporation to purchase, service, hold, sell,
lend on the security of, or otherwise deal with any mortgage
that the Corporation is prohibited from so dealing with under
the standards issued under section 1330 of the Housing and
Community Development Act of 1992 by the Director of the
Federal Housing Finance Agency.''.
(d) Federal Home Loan Banks.--Section 10(a) of the Federal
Home Loan Bank Act (12 U.S.C. 1430(a)) is amended--
(1) by redesignating paragraph (6) as paragraph (7); and
(2) by inserting after paragraph (5) the following new
paragraph:
``(6) Prohibition regarding mortgagor identification
requirements.--Nothing in this Act may be construed to
authorize a Federal Home Loan Bank to provide any advance to
a member for use in financing, or accept as collateral for an
advance under this section, any mortgage that a Bank is
prohibited from so accepting under the standards issued under
section 1330 of the Housing and Community Development Act of
1992 by the Director of the Federal Housing Finance
Agency.''.
SEC. 337. REVISION OF HOUSING GOALS.
(a) Housing Goals.--The Housing and Community Development
Act of 1992 is amended by striking sections 1331 through 1334
(12 U.S.C. 4561-4) and inserting the following new sections:
``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.
``(a) In General.--The Director shall establish, effective
for the first year that begins after the effective date under
section 365 of the Federal Housing Finance Reform Act of 2008
and each year thereafter, annual housing goals, with respect
to the mortgage purchases by the enterprises, as follows:
``(1) Single family housing goals.--Three single-family
housing goals under section 1332.
``(2) Multifamily special affordable housing goals.--A
multifamily special affordable housing goal under section
1333.
``(b) Eliminating Interest Rate Disparities.--
``(1) In general.--Upon request by the Director, an
enterprise shall provide to the Director, in a form
determined by the Director, data the Director may review to
determine whether there exist disparities in interest rates
charged on mortgages to borrowers who are minorities as
compared with comparable mortgages to borrowers of similar
creditworthiness who are not minorities.
``(2) Remedial actions upon preliminary finding.--Upon a
preliminary finding by the Director that a pattern of
disparities in interest rates with respect to any lender or
lenders exists pursuant to the data provided by an enterprise
in paragraph (1), the Director shall--
``(A) refer the preliminary finding to the appropriate
regulatory or enforcement agency for further review;
``(B) require the enterprise to submit additional data with
respect to any lender or lenders, as appropriate and to the
extent practicable, to the Director who shall submit any such
additional data to the regulatory or enforcement agency for
appropriate action; and
``(C) require the enterprise to undertake remedial actions,
as appropriate, pursuant to section 1325(5) (12 U.S.C.
4545(5)).
``(3) Annual report to congress.--The Director shall submit
to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate a report describing the actions
taken, and being taken, by the Director to carry out this
subsection. No such report shall identify any lender or
lenders who have not been found to have engaged in
discriminatory lending practices pursuant to a final
adjudication on the record, and after opportunity for an
administrative hearing, in accordance with subchapter II of
chapter 5 of title 5, United States Code.
``(4) Protection of identity of individuals.--In carrying
out this subsection, the Director shall ensure that no
property-related or financial information that would enable a
borrower to be identified shall be made public.
``(c) Timing.--The Director shall establish an annual
deadline by which the Director shall establish the annual
housing goals under this subpart for each year, taking into
consideration the need for the enterprises to reasonably and
sufficiently plan their operations and activities in advance,
including operations and activities necessary to meet such
annual goals.
``SEC. 1332. SINGLE-FAMILY HOUSING GOALS.
``(a) In General.--The Director shall establish annual
goals for the purchase by each enterprise of conventional,
conforming, single-family, purchase money mortgages financing
owner-occupied and rental housing for each of the following
categories of families:
``(1) Low-income families.
[[Page H3246]]
``(2) Families that reside in low-income areas.
``(3) Very low-income families.
``(b) Refinance Subgoal.--
``(1) In general.--The Director shall establish a separate
subgoal within each goal under subsection (a)(1) for the
purchase by each enterprise of mortgages for low-income
families on single family housing given to pay off or prepay
an existing loan secured by the same property. The Director
shall, for each year, determine whether each enterprise has
complied with the subgoal under this subsection in the same
manner provided under this section for determining compliance
with the housing goals.
``(2) Enforcement.--For purposes of section 1336, the
subgoal established under paragraph (1) of this subsection
shall be considered to be a housing goal established under
this section. Such subgoal shall not be enforceable under any
other provision of this title (including subpart C of this
part) other than section 1336 or under any provision of the
Federal National Mortgage Association Charter Act or the
Federal Home Loan Mortgage Corporation Act.
``(c) Determination of Compliance.--The Director shall
determine, for each year that the housing goals under this
section are in effect pursuant to section 1331(a), whether
each enterprise has complied with the single-family housing
goals established under this section for such year. An
enterprise shall be considered to be in compliance with such
a goal for a year only if, for each of the types of families
described in subsection (a), the percentage of the number of
conventional, conforming, single-family, owner-occupied or
rental, as applicable, purchase money mortgages purchased by
each enterprise in such year that serve such families, meets
or exceeds the target for the year for such type of family
that is established under subsection (d).
``(d) Annual Targets.--
``(1) In general.--Except as provided in paragraph (2), for
each of the types of families described in subsection (a),
the target under this subsection for a year shall be the
average percentage, for the three years that most recently
precede such year and for which information under the Home
Mortgage Disclosure Act of 1975 is publicly available, of the
number of conventional, conforming, single-family, owner-
occupied or rental, as applicable, purchase money mortgages
originated in such year that serves such type of family, as
determined by the Director using the information obtained and
determined pursuant to paragraphs (3) and (4).
``(2) Authority to increase targets.--
``(A) In general.--The Director may, for any year,
establish by regulation, for any or all of the types of
families described in subsection (a), percentage targets that
are higher than the percentages for such year determined
pursuant to paragraph (1), to reflect expected changes in
market performance related to such information under the Home
Mortgage Disclosure Act of 1975.
``(B) Factors.--In establishing any targets pursuant to
subparagraph (A), the Director shall consider the following
factors:
``(i) National housing needs.
``(ii) Economic, housing, and demographic conditions.
``(iii) The performance and effort of the enterprises
toward achieving the housing goals under this section in
previous years.
``(iv) The size of the conventional mortgage market serving
each of the types of families described in subsection (a)
relative to the size of the overall conventional mortgage
market.
``(v) The ability of the enterprise to lead the industry in
making mortgage credit available.
``(vi) The need to maintain the sound financial condition
of the enterprises.
``(3) HMDA information.--The Director shall annually obtain
information submitted in compliance with the Home Mortgage
Disclosure Act of 1975 regarding conventional, conforming,
single-family, owner-occupied or rental, as applicable,
purchase money mortgages originated and purchased for the
previous year.
``(4) Conforming mortgages.--In determining whether a
mortgage is a conforming mortgage for purposes of this
paragraph, the Director shall consider the original principal
balance of the mortgage loan to be the principal balance as
reported in the information referred to in paragraph (3), as
rounded to the nearest thousand dollars.
``(e) Notice of Determination and Enterprise Comment.--
``(1) Notice.--Within 30 days of making a determination
under subsection (c) regarding a compliance of an enterprise
for a year with a housing goal established under this section
and before any public disclosure thereof, the Director shall
provide notice of the determination to the enterprise, which
shall include an analysis and comparison, by the Director, of
the performance of the enterprise for the year and the
targets for the year under subsection (d).
``(2) Comment period.--The Director shall provide each
enterprise an opportunity to comment on the determination
during the 30-day period beginning upon receipt by the
enterprise of the notice.
``(f) Use of Borrower Income.--In monitoring the
performance of each enterprise pursuant to the housing goals
under this section and evaluating such performance (for
purposes of section 1336), the Director shall consider a
mortgagor's income to be such income at the time of
origination of the mortgage.
``(g) Consideration of Units in Single-Family Rental
Housing.--In establishing any goal under this subpart, the
Director may take into consideration the number of housing
units financed by any mortgage on single-family rental
housing purchased by an enterprise.
``SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.
``(a) Establishment.--
``(1) In general.--The Director shall establish, by
regulation, an annual goal for the purchase by each
enterprise of each of the following types of mortgages on
multifamily housing:
``(A) Mortgages that finance dwelling units for low-income
families.
``(B) Mortgages that finance dwelling units for very low-
income families.
``(C) Mortgages that finance dwelling units assisted by the
low-income housing tax credit under section 42 of the
Internal Revenue Code of 1986.
``(2) Additional requirements for smaller projects.--The
Director shall establish, within the goal under this section,
additional requirements for the purchase by each enterprise
of mortgages described in paragraph (1) for multifamily
housing projects of a smaller or limited size, which may be
based on the number of dwelling units in the project or the
amount of the mortgage, or both, and shall include
multifamily housing projects of such smaller sizes as are
typical among such projects that serve rural areas.
``(3) Factors.--In establishing the goal under this section
relating to mortgages on multifamily housing for an
enterprise for a year, the Director shall consider--
``(A) national multifamily mortgage credit needs;
``(B) the performance and effort of the enterprise in
making mortgage credit available for multifamily housing in
previous years;
``(C) the size of the multifamily mortgage market;
``(D) the ability of the enterprise to lead the industry in
making mortgage credit available, especially for underserved
markets, such as for small multifamily projects of 5 to 50
units, multifamily properties in need of rehabilitation, and
multifamily properties located in rural areas; and
``(E) the need to maintain the sound financial condition of
the enterprise.
``(b) Units Financed by Housing Finance Agency Bonds.--The
Director shall give credit toward the achievement of the
multifamily special affordable housing goal under this
section (for purposes of section 1336) to dwelling units in
multifamily housing that otherwise qualifies under such goal
and that is financed by tax-exempt or taxable bonds issued by
a State or local housing finance agency, but only if such
bonds--
``(1) are secured by a guarantee of the enterprise; or
``(2) are not investment grade and are purchased by the
enterprise.
``(c) Use of Tenant Income or Rent.--The Director shall
monitor the performance of each enterprise in meeting the
goals established under this section and shall evaluate such
performance (for purposes of section 1336) based on--
``(1) the income of the prospective or actual tenants of
the property, where such data are available; or
``(2) where the data referred to in paragraph (1) are not
available, rent levels affordable to low-income and very low-
income families.
A rent level shall be considered to be affordable for
purposes of this subsection for an income category referred
to in this subsection if it does not exceed 30 percent of the
maximum income level of such income category, with
appropriate adjustments for unit size as measured by the
number of bedrooms.
``(d) Determination of Compliance.--The Director shall, for
each year that the housing goal under this section is in
effect pursuant to section 1331(a), determine whether each
enterprise has complied with such goal and the additional
requirements under subsection (a)(2).
``SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS.
``(a) Authority.--An enterprise may petition the Director
in writing at any time during a year to reduce the level of
any goal for such year established pursuant to this subpart.
``(b) Standard for Reduction.--The Director may reduce the
level for a goal pursuant to such a petition only if--
``(1) market and economic conditions or the financial
condition of the enterprise require such action; or
``(2) efforts to meet the goal would result in the
constraint of liquidity, over-investment in certain market
segments, or other consequences contrary to the intent of
this subpart, or section 301(3) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1716(3)) or
section 301(3) of the Federal Home Loan Mortgage Corporation
Act (12 U.S.C. 1451 note), as applicable.
``(c) Determination.--The Director shall make a
determination regarding any proposed reduction within 30 days
of receipt of the petition regarding the reduction. The
Director may extend such period for a single additional 15-
day period, but only if the Director requests additional
information from the enterprise. A denial by the Director to
reduce the level of any goal under this section may be
appealed to the United States District Court for the District
of Columbia or the United States district court in the
jurisdiction in which the headquarters of an enterprise is
located.''.
[[Page H3247]]
(b) Conforming Amendments.--The Housing and Community
Development Act of 1992 is amended--
(1) in section 1335(a) (12 U.S.C. 4565(a)), in the matter
preceding paragraph (1), by striking ``low- and moderate-
income housing goal'' and all that follows through ``section
1334'' and inserting ``housing goals established under this
subpart''; and
(2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by
striking ``sections 1332, 1333, and 1334,'' and inserting
``this subpart''.
(c) Definitions.--Section 1303 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4502), as amended by the
preceding provisions of this title, is further amended--
(1) in paragraph (22) (relating to the definition of ``very
low-income''), by striking ``60 percent'' each place such
term appears and inserting ``50 percent'';
(2) by redesignating paragraphs (19) through (22) as
paragraphs (23) through (26), respectively;
(3) by inserting after paragraph (18) the following new
paragraph:
``(22) Rural area.--The term `rural area' has the meaning
given such term in section 520 of the Housing Act of 1949 (42
U.S.C. 1490), except that such term includes micropolitan
areas and tribal trust lands.''.
(4) by redesignating paragraphs (13) through (18) as
paragraphs (16) through (21), respectively;
(5) by inserting after paragraph (12) the following new
paragraph:
``(15) Low-income area.--The term `low income area' means a
census tract or block numbering area in which the median
income does not exceed 80 percent of the median income for
the area in which such census tract or block numbering area
is located, and, for the purposes of section 1332(a)(2),
shall include families having incomes not greater than 100
percent of the area median income who reside in minority
census tracts.'';
(6) by redesignating paragraphs (11) and (12) as paragraphs
(13) and (14), respectively;
(7) by inserting after paragraph (10) the following new
paragraph:
``(12) Extremely low-income.--The term `extremely low-
income' means--
``(A) in the case of owner-occupied units, income not in
excess of 30 percent of the area median income; and
``(B) in the case of rental units, income not in excess of
30 percent of the area median income, with adjustments for
smaller and larger families, as determined by the
Secretary.'';
(8) by redesignating paragraphs (7) through (10) as
paragraphs (8) through (11), respectively; and
(9) by inserting after paragraph (6) the following new
paragraph:
``(7) Conforming mortgage.--The term `conforming mortgage'
means, with respect to an enterprise, a conventional mortgage
having an original principal obligation that does not exceed
the dollar limitation, in effect at the time of such
origination, under, as applicable--
``(A) section 302(b)(2) of the Federal National Mortgage
Association Charter Act; or
``(B) section 305(a)(2) of the Federal Home Loan Mortgage
Corporation Act.''.
SEC. 338. DUTY TO SERVE UNDERSERVED MARKETS.
(a) Establishment and Evaluation of Performance.--Section
1335 of the Housing and Community Development Act of 1992 (12
U.S.C. 4565) is amended--
(1) in the section heading, by inserting ``DUTY TO SERVE
UNDERSERVED MARKETS AND'' before ``OTHER'';
(2) by striking subsection (b);
(3) in subsection (a)--
(A) in the matter preceding paragraph (1), by inserting
``and to carry out the duty under subsection (a) of this
section'' before ``, each enterprise shall'';
(B) in paragraph (3), by inserting ``and'' after the
semicolon at the end;
(C) in paragraph (4), by striking ``; and'' and inserting a
period;
(D) by striking paragraph (5); and
(E) by redesignating such subsection as subsection (b);
(4) by inserting before subsection (b) (as so redesignated
by paragraph (3)(E) of this subsection) the following new
subsection:
``(a) Duty To Serve Underserved Markets.--
``(1) Duty.--In accordance with the purpose of the
enterprises under section 301(3) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1716) and section
301(b)(3) of the Federal Home Loan Mortgage Corporation Act
(12 U.S.C. 1451 note) to undertake activities relating to
mortgages on housing for very low-, low-, and moderate-income
families involving a reasonable economic return that may be
less than the return earned on other activities, each
enterprise shall have the duty to increase the liquidity of
mortgage investments and improve the distribution of
investment capital available for mortgage financing for
underserved markets.
``(2) Underserved markets.--To meet its duty under
paragraph (1), each enterprise shall comply with the
following requirements with respect to the following
underserved markets:
``(A) Manufactured housing.--The enterprise shall lead the
industry in developing loan products and flexible
underwriting guidelines to facilitate a secondary market for
mortgages on manufactured homes for very low-, low-, and
moderate-income families.
``(B) Affordable housing preservation.--The enterprise
shall lead the industry in developing loan products and
flexible underwriting guidelines to facilitate a secondary
market to preserve housing affordable to very low-, low-, and
moderate-income families, including housing projects
subsidized under--
``(i) the project-based and tenant-based rental assistance
programs under section 8 of the United States Housing Act of
1937;
``(ii) the program under section 236 of the National
Housing Act;
``(iii) the below-market interest rate mortgage program
under section 221(d)(4) of the National Housing Act;
``(iv) the supportive housing for the elderly program under
section 202 of the Housing Act of 1959;
``(v) the supportive housing program for persons with
disabilities under section 811 of the Cranston-Gonzalez
National Affordable Housing Act;
``(vi) the programs under title IV of the McKinney-Vento
Homeless Assistance Act (42 U.S.C. 11361 et seq.), but only
permanent supportive housing projects subsidized under such
programs; and
``(vii) the rural rental housing program under section 515
of the Housing Act of 1949.
``(C) Rural and other underserved markets.--The enterprise
shall lead the industry in developing loan products and
flexible underwriting guidelines to facilitate a secondary
market for mortgages on housing for very low-, low-, and
moderate-income families in rural areas, and for mortgages
for housing for any other underserved market for very low-,
low-, and moderate-income families that the Secretary
identifies as lacking adequate credit through conventional
lending sources. Such underserved markets may be identified
by borrower type, market segment, or geographic area.''; and
(5) by adding at the end the following new subsection:
``(c) Evaluation and Reporting of Compliance.--
``(1) In general.--Not later than 6 months after the
effective date under section 365 of the Federal Housing
Finance Reform Act of 2008, the Director shall establish a
manner for evaluating whether, and the extent to which, the
enterprises have complied with the duty under subsection (a)
to serve underserved markets and for rating the extent of
such compliance. Using such method, the Director shall, for
each year, evaluate such compliance and rate the performance
of each enterprise as to extent of compliance. The Director
shall include such evaluation and rating for each enterprise
for a year in the report for that year submitted pursuant to
section 1319B(a).
``(2) Separate evaluations.--In determining whether an
enterprise has complied with the duty referred to in
paragraph (1), the Director shall separately evaluate whether
the enterprise has complied with such duty with respect to
each of the underserved markets identified in subsection (a),
taking into consideration--
``(A) the development of loan products and more flexible
underwriting guidelines;
``(B) the extent of outreach to qualified loan sellers in
each of such underserved markets; and
``(C) the volume of loans purchased in each of such
underserved markets.
``(3) Manufactured housing market.--In determining whether
an enterprise has complied with the duty under subparagraph
(A) of subsection (a)(2), the Director may consider loans
secured by both real and personal property.''.
(b) Enforcement.--Subsection (a) of section 1336 of the
Housing and Community Development Act of 1992 (12 U.S.C.
4566(a)) is amended--
(1) in paragraph (1), by inserting ``and with the duty
under section 1335(a) of each enterprise with respect to
underserved markets,'' before ``as provided in this
section''; and
(2) by adding at the end of such subsection, as amended by
the preceding provisions of this subtitle, the following new
paragraph:
``(4) Enforcement of duty to provide mortgage credit to
underserved markets.--The duty under section 1335(a) of each
enterprise to serve underserved markets (as determined in
accordance with section 1335(c)) shall be enforceable under
this section to the same extent and under the same provisions
that the housing goals established under this subpart are
enforceable. Such duty shall not be enforceable under any
other provision of this title (including subpart C of this
part) other than this section or under any provision of the
Federal National Mortgage Association Charter Act or the
Federal Home Loan Mortgage Corporation Act.''.
SEC. 339. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING
GOALS.
(a) Additional Credit for Certain Mortgages.--Section
1336(a) of the Housing and Community Development Act of 1992
(12 U.S.C. 4566(a)) is amended--
(1) in paragraph (2), by inserting ``, except as provided
in paragraph (4),'' after ``which''; and
(2) by adding at the end the following new paragraph:
``(5) Additional credit.--The Director shall assign more
than 125 percent credit toward achievement, under this
section, of the housing goals for mortgage purchase
activities of the enterprises that comply with the
requirements of such goals and support--
``(A) housing that meets energy efficiency or other
environmental standards that are
[[Page H3248]]
established by a Federal, State, or local governmental
authority with respect to the geographic area where the
housing is located or are otherwise widely recognized; or
``(B) housing that includes a licensed childcare center.
The availability of additional credit under this paragraph
shall not be used to increase any housing goal, subgoal, or
target established under this subpart.''.
(b) Monitoring and Enforcement.--Section 1336 of the
Housing and Community Development Act of 1992 (12 U.S.C.
4566) is amended--
(1) in subsection (b)--
(A) in the subsection heading, by inserting ``Preliminary''
before ``Determination'';
(B) by striking paragraph (1) and inserting the following
new paragraph:
``(1) Notice.--If the Director preliminarily determines
that an enterprise has failed, or that there is a substantial
probability that an enterprise will fail, to meet any housing
goal established under this subpart, the Director shall
provide written notice to the enterprise of such a
preliminary determination, the reasons for such
determination, and the information on which the Director
based the determination.'';
(C) in paragraph (2)--
(i) in subparagraph (A), by inserting ``finally'' before
``determining'';
(ii) by striking subparagraphs (B) and (C) and inserting
the following new subparagraph:
``(B) Extension or shortening of period.--The Director
may--
``(i) extend the period under subparagraph (A) for good
cause for not more than 30 additional days; and
``(ii) shorten the period under subparagraph (A) for good
cause.''; and
(iii) by redesignating subparagraph (D) as subparagraph
(C); and
(D) in paragraph (3)--
(i) in subparagraph (A), by striking ``determine'' and
inserting ``issue a final determination of'';
(ii) in subparagraph (B), by inserting ``final'' before
``determinations''; and
(iii) in subparagraph (C)--
(I) by striking ``Committee on Banking, Finance and Urban
Affairs'' and inserting ``Committee on Financial Services'';
and
(II) by inserting ``final'' before ``determination'' each
place such term appears; and
(2) in subsection (c)--
(A) by striking the subsection designation and heading and
all that follows through the end of paragraph (1) and
inserting the following:
``(c) Cease and Desist Orders, Civil Money Penalties, and
Remedies Including Housing Plans.--
``(1) Requirement.--If the Director finds, pursuant to
subsection (b), that there is a substantial probability that
an enterprise will fail, or has actually failed, to meet any
housing goal under this subpart and that the achievement of
the housing goal was or is feasible, the Director may require
that the enterprise submit a housing plan under this
subsection. If the Director makes such a finding and the
enterprise refuses to submit such a plan, submits an
unacceptable plan, fails to comply with the plan or the
Director finds that the enterprise has failed to meet any
housing goal under this subpart, in addition to requiring an
enterprise to submit a housing plan, the Director may issue a
cease and desist order in accordance with section 1341,
impose civil money penalties in accordance with section 1345,
or order other remedies as set forth in paragraph (7) of this
subsection.'';
(B) in paragraph (2)--
(i) by striking ``Contents.--Each housing plan'' and
inserting ``Housing plan.--If the Director requires a housing
plan under this section, such a plan''; and
(ii) in subparagraph (B), by inserting ``and changes in its
operations'' after ``improvements'';
(C) in paragraph (3)--
(i) by inserting ``comply with any remedial action or''
before ``submit a housing plan''; and
(ii) by striking ``under subsection (b)(3) that a housing
plan is required'';
(D) in paragraph (4), by striking the first two sentences
and inserting the following: ``The Director shall review each
submission by an enterprise, including a housing plan
submitted under this subsection, and not later than 30 days
after submission, approve or disapprove the plan or other
action. The Director may extend the period for approval or
disapproval for a single additional 30-day period if the
Director determines such extension necessary.''; and
(E) by adding at the end the following new paragraph:
``(7) Additional remedies for failure to meet goals.--In
addition to ordering a housing plan under this section,
issuing cease and desist orders under section 1341, and
ordering civil money penalties under section 1345, the
Director may seek other actions when an enterprise fails to
meet a goal, and exercise appropriate enforcement authority
available to the Director under this Act to prohibit the
enterprise from initially offering any product (as such term
is defined in section 1321(f)) or engaging in any new
activities, services, undertakings, and offerings and to
order the enterprise to suspend products and activities,
services, undertakings, and offerings pending its achievement
of the goal.''.
SEC. 340. AFFORDABLE HOUSING FUND.
(a) In General.--The Housing and Community Development Act
of 1992 is amended by striking sections 1337 and 1338 (12
U.S.C. 4562 note) and inserting the following new section:
``SEC. 1337. AFFORDABLE HOUSING FUND.
``(a) Establishment and Purpose.--The Director, in
consultation with the Secretary of Housing and Urban
Development, shall establish and manage an affordable housing
fund in accordance with this section, which shall be funded
with amounts allocated by the enterprises under subsection
(b). The purpose of the affordable housing fund shall be to
provide formula grants to grantees for use--
``(1) to increase homeownership for extremely low-and very
low-income families;
``(2) to increase investment in housing in low-income
areas, and areas designated as qualified census tracts or an
area of chronic economic distress pursuant to section 143(j)
of the Internal Revenue Code of 1986 (26 U.S.C. 143(j));
``(3) to increase and preserve the supply of rental and
owner-occupied housing for extremely low- and very low-income
families;
``(4) to increase investment in public infrastructure
development in connection with housing assisted under this
section; and
``(5) to leverage investments from other sources in
affordable housing and in public infrastructure development
in connection with housing assisted under this section.
``(b) Allocation of Amounts by Enterprises.--
``(1) In general.--In accordance with regulations issued by
the Director under subsection (m) and subject to paragraph
(2) of this subsection and subsection (i)(5), each enterprise
shall allocate to the affordable housing fund established
under subsection (a), in each of the years 2008 through 2012,
an amount equal to 1.2 basis points for each dollar of the
average total mortgage portfolio of the enterprise during the
preceding year.
``(2) Suspension of contributions.--The Director shall
temporarily suspend the allocation under paragraph (1) by an
enterprise to the affordable housing fund upon a finding by
the Director that such allocations--
``(A) are contributing, or would contribute, to the
financial instability of the enterprise;
``(B) are causing, or would cause, the enterprise to be
classified as undercapitalized; or
``(C) are preventing, or would prevent, the enterprise from
successfully completing a capital restoration plan under
section 1369C.
``(3) 5-year sunset and report.--
``(A) Sunset.--The enterprises shall not be required to
make allocations to the affordable housing fund in 2012 or in
any year thereafter.
``(B) Report on program continuance.--Not later than June
30, 2011, the Director shall submit to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate a report making recommendations on whether the program
under this section, including the requirement for the
enterprises to make allocations to the affordable housing
fund, should be extended and on any modifications for the
program.
``(4) Prohibition of pass-through of cost of allocations.--
The Director shall, by regulation, prohibit each enterprise
from redirecting such costs, through increased charges or
fees, or decreased premiums, or in any other manner, to the
originators of mortgages purchased or securitized by the
enterprise.
``(c) Affordable Housing Needs Formulas.--
``(1) Allocation for 2008.--
``(A) Allocation percentages for louisiana and
mississippi.--For purposes of subsection (d)(1)(A), the
allocation percentages for 2008 for the grantees under this
section for such year shall be as follows:
``(i) The allocation percentage for the Louisiana Housing
Finance Agency shall be 75 percent.
``(ii) The allocation percentage for the Mississippi
Development Authority shall be 25 percent.
``(B) Use in disaster areas.--Affordable housing grant
amounts for 2008 shall be used only as provided in subsection
(g) only for such eligible activities in areas that were
subject to a declaration by the President of a major disaster
or emergency under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5121 et seq.) in
connection with Hurricane Katrina or Rita of 2005.
``(2) Allocation formula for other years.--The Secretary of
Housing and Urban Development shall, by regulation, establish
a formula to allocate, among the States (as such term is
defined in section 1303) and federally recognized Indian
tribes, the amounts provided by the enterprises in each year
referred to subsection (b)(1), other than 2008, to the
affordable housing fund established under this section. The
formula shall be based on the following factors, with respect
to each State and tribe:
``(A) The ratio of the population of the State or federally
recognized Indian tribe to the aggregate population of all
the States and tribes.
``(B) The percentage of families in the State or federally
recognized Indian tribe that pay more than 50 percent of
their annual income for housing costs.
``(C) The percentage of persons in the State or federally
recognized Indian tribe that are members of extremely low- or
very low-income families.
``(D) The cost of developing or carrying out rehabilitation
of housing in the State or for the federally recognized
Indian tribe.
[[Page H3249]]
``(E) The percentage of families in the State or federally
recognized Indian tribe that live in substandard housing.
``(F) The percentage of housing stock in the State or for
the federally recognized Indian tribe that is extremely old
housing.
``(G) Any other factors that the Secretary determines to be
appropriate.
``(3) Failure to establish.--If, in any year referred to in
subsection (b)(1), other than 2008, the regulations
establishing the formula required under paragraph (2) of this
subsection have not been issued by the date that the Director
determines the amounts described in subsection (d)(1) to be
available for affordable housing fund grants in such year,
for purposes of such year any amounts for a State (as such
term is defined in section 1303 of this Act) that would
otherwise be determined under subsection (d) by applying the
formula established pursuant to paragraph (2) of this
subsection shall be determined instead by applying, for such
State, the percentage that is equal to the percentage of the
total amounts made available for such year for allocation
under subtitle A of title II of the Cranston-Gonzalez
National Affordable Housing Act (42 U.S.C. 12741 et seq.)
that are allocated in such year, pursuant to such subtitle,
to such State (including any insular area or unit of general
local government, as such terms are defined in section 104 of
such Act (42 U.S.C. 12704), that is treated as a State under
section 1303 of this Act) and to participating jurisdictions
and other eligible entities within such State.
``(d) Allocation of Formula Amount; Grants.--
``(1) Formula amount.--For each year referred to in
subsection (b)(1), the Director shall determine the formula
amount under this section for each grantee, which shall be
the amount determined for such grantee--
``(A) for 2008, by applying the allocation percentages
under subparagraph (A) of subsection (c)(1) to the sum of the
total amounts allocated by the enterprises to the affordable
housing fund for such year, less any amounts used pursuant to
subsection (i)(1); and
``(B) for any other year referred to in subsection (b)(1)
(other than 2008), by applying the formula established
pursuant to paragraph (2) of subsection (c) to the sum of the
total amounts allocated by the enterprises to the affordable
housing fund for such year and any recaptured amounts
available pursuant to subsection (i)(4), less any amounts
used pursuant to subsection (i)(1).
``(2) Notice.--In each year referred to in subsection
(b)(1), not later than 60 days after the date that the
Director determines the amounts described in paragraph (1) to
be available for affordable housing fund grants to grantees
in such year, the Director shall cause to be published in the
Federal Register a notice that such amounts shall be so
available.
``(3) Grant amount.--
``(A) In general.--For each year referred to in subsection
(b)(1), the Director shall make a grant from amounts in the
affordable housing fund to each grantee in an amount that is,
except as provided in subparagraph (B), equal to the formula
amount under this section for the grantee. A grantee may
designate a State housing finance agency, housing and
community development entity, tribally designated housing
entity (as such term is defined in section 4 of the Native
American Housing Assistance and Self-Determination Act of
1997 (25 U.S.C. 4103)) or other qualified instrumentality of
the grantee to receive such grant amounts.
``(B) Reduction for failure to obtain return of misused
funds.--If in any year a grantee fails to obtain
reimbursement or return of the full amount required under
subsection (j)(1)(B) to be reimbursed or returned to the
grantee during such year--
``(i) except as provided in clause (ii)--
``(I) the amount of the grant for the grantee for the
succeeding year, as determined pursuant to subparagraph (A),
shall be reduced by the amount by which such amounts required
to be reimbursed or returned exceed the amount actually
reimbursed or returned; and
``(II) the amount of the grant for the succeeding year for
each other grantee whose grant is not reduced pursuant to
subclause (I) shall be increased by the amount determined by
applying the formula established pursuant to subsection
(c)(2) to the total amount of all reductions for all grantees
for such year pursuant to subclause (I); or
``(ii) in any case in which such failure to obtain
reimbursement or return occurs during a year immediately
preceding a year in which grants under this subsection will
not be made, the grantee shall pay to the Director for
reallocation among the other grantees an amount equal to the
amount of the reduction for the grantee that would otherwise
apply under clause (i)(I).
``(e) Grantee Allocation Plans.--
``(1) In general.--For each year that a grantee receives
affordable housing fund grant amounts, the grantee shall
establish an allocation plan in accordance with this
subsection, which shall be a plan for the distribution of
such grant amounts of the grantee for such year that--
``(A) is based on priority housing needs, as determined by
the grantee in accordance with the regulations established
under subsection (m)(2)(C);
``(B) complies with subsection (f); and
``(C) includes performance goals, benchmarks, and
timetables for the grantee for the production, preservation,
and rehabilitation of affordable rental and homeownership
housing with such grant amounts that comply with the
requirements established by the Director pursuant to
subsection (m)(2)(F).
``(2) Establishment.--In establishing an allocation plan, a
grantee shall notify the public of the establishment of the
plan, provide an opportunity for public comments regarding
the plan, consider any public comments received, and make the
completed plan available to the public.
``(3) Contents.--An allocation plan of a grantee shall set
forth the requirements for eligible recipients under
subsection (h) to apply to the grantee to receive assistance
from affordable housing fund grant amounts, including a
requirement that each such application include--
``(A) a description of the eligible activities to be
conducted using such assistance; and
``(B) a certification by the eligible recipient applying
for such assistance that any housing units assisted with such
assistance will comply with the requirements under this
section.
``(f) Selection of Activities Funded Using Affordable
Housing Fund Grant Amounts.--Affordable housing fund grant
amounts of a grantee may be used, or committed for use, only
for activities that--
``(1) are eligible under subsection (g) for such use;
``(2) comply with the applicable allocation plan under
subsection (e) of the grantee; and
``(3) are selected for funding by the grantee in accordance
with the process and criteria for such selection established
pursuant to subsection (m)(2)(C).
``(g) Eligible Activities.--Affordable housing fund grant
amounts of a grantee shall be eligible for use, or for
commitment for use, only for assistance for--
``(1) the production, preservation, and rehabilitation of
rental housing, including housing under the programs
identified in section 1335(a)(2)(B), except that such grant
amounts may be used for the benefit only of extremely low-
and very low-income families;
``(2) the production, preservation, and rehabilitation of
housing for homeownership, including such forms as
downpayment assistance, closing cost assistance, and
assistance for interest-rate buy-downs, that--
``(A) is available for purchase only for use as a principal
residence by families that qualify both as--
``(i) extremely low- and very-low income families at the
times described in subparagraphs (A) through (C) of section
215(b)(2) of the Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 12745(b)(2)); and
``(ii) first-time homebuyers, as such term is defined in
section 104 of the Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 12704), except that any reference in
such section to assistance under title II of such Act shall
for purposes of this section be considered to refer to
assistance from affordable housing fund grant amounts;
``(B) has an initial purchase price that meets the
requirements of section 215(b)(1) of the Cranston-Gonzalez
National Affordable Housing Act;
``(C) is subject to the same resale restrictions
established under section 215(b)(3) of the Cranston-Gonzalez
National Affordable Housing Act and applicable to the
participating jurisdiction that is the State in which such
housing is located; and
``(D) is made available for purchase only by, or in the
case of assistance under this paragraph, is made available
only to, homebuyers who have, before purchase--
``(i) completed a program of counseling with respect to the
responsibilities and financial management involved in
homeownership that is approved by the Director; except that
the Director may, at the request of a State, waive the
requirements of this subparagraph with respect to a
geographic area or areas within the State if: (I) the travel
time or distance involved in providing counseling with
respect to such area or areas, as otherwise required under
this subparagraph, on an in-person basis is excessive or the
cost of such travel is prohibitive; and (II) the State
provides alternative forms of counseling for such area or
areas, which may include interactive telephone counseling,
on-line counseling, interactive video counseling, and
interactive home study counseling and a program of financial
literacy and education to promote an understanding of
consumer, economic, and personal finance issues and concepts,
including saving for retirement, managing credit, long-term
care, and estate planning and education on predatory lending,
identity theft, and financial abuse schemes relating to
homeownership that is approved by the Director, except that
entities providing such counseling shall not discriminate
against any particular form of housing; and
``(ii) demonstrated, in accordance with regulations as the
Director shall issue setting forth requirements for
sufficient evidence, that they are lawfully present in the
United States; and
``(3) public infrastructure development activities in
connection with housing activities funded under paragraph (1)
or (2).
``(h) Eligible Recipients.--Affordable housing fund grant
amounts of a grantee may be provided only to a recipient that
is an organization, agency, or other entity (including a for-
profit entity, a nonprofit entity, and a faith-based
organization) that--
``(1) has demonstrated experience and capacity to conduct
an eligible activity under (g), as evidenced by its ability
to--
[[Page H3250]]
``(A) own, construct or rehabilitate, manage, and operate
an affordable multifamily rental housing development;
``(B) design, construct or rehabilitate, and market
affordable housing for homeownership;
``(C) provide forms of assistance, such as downpayments,
closing costs, or interest-rate buy-downs, for purchasers; or
``(D) construct related public infrastructure development
activities in connection with such housing activities;
``(2) demonstrates the ability and financial capacity to
undertake, comply, and manage the eligible activity;
``(3) demonstrates its familiarly with the requirements of
any other Federal, State or local housing program that will
be used in conjunction with such grant amounts to ensure
compliance with all applicable requirements and regulations
of such programs; and
``(4) makes such assurances to the grantee as the Director
shall, by regulation, require to ensure that the recipient
will comply with the requirements of this section during the
entire period that begins upon selection of the recipient to
receive such grant amounts and ending upon the conclusion of
all activities under subsection (g) that are engaged in by
the recipient and funded with such grant amounts.
``(i) Limitations on Use.--
``(1) Required amount for refcorp.--Of the aggregate amount
allocated pursuant to subsection (b) in each year to the
affordable housing fund, 25 percent shall be used as provided
in section 21B(f)(2)(E) of the Federal Home Loan Bank Act (12
U.S.C. 1441b(f)(2)(E)).
``(2) Required amount for homeownership activities.--Of the
aggregate amount of affordable housing fund grant amounts
provided in each year to a grantee, not less than 10 percent
shall be used for activities under paragraph (2) of
subsection (g).
``(3) Maximum amount for public infrastructure development
activities in connection with affordable housing
activities.--Of the aggregate amount of affordable housing
fund grant amounts provided in each year to a grantee, not
more than 12.5 percent may be used for activities under
paragraph (3) of subsection (g).
``(4) Deadline for commitment or use.--Any affordable
housing fund grant amounts of a grantee shall be used or
committed for use within two years of the date of that such
grant amounts are made available to the grantee. The Director
shall recapture into the affordable housing fund any such
amounts not so used or committed for use and allocate such
amounts under subsection (d)(1) in the first year after such
recapture.
``(5) Use of returns.--The Director shall, by regulation
provide that any return on a loan or other investment of any
affordable housing fund grant amounts of a grantee shall be
treated, for purposes of availability to and use by the
grantee, as affordable housing fund grant amounts.
``(6) Prohibited uses.--The Director shall--
``(A) by regulation, set forth prohibited uses of
affordable housing fund grant amounts, which shall include
use for--
``(i) political activities;
``(ii) advocacy;
``(iii) lobbying, whether directly or through other
parties;
``(iv) counseling services;
``(v) travel expenses; and
``(vi) preparing or providing advice on tax returns;
``(B) by regulation, provide that, except as provided in
subparagraph (C), affordable housing fund grant amounts of a
grantee may not be used for administrative, outreach, or
other costs of--
``(i) the grantee; or
``(ii) any recipient of such grant amounts; and
``(C) by regulation, limit the amount of any affordable
housing fund grant amounts of the grantee for a year that may
be used for administrative costs of the grantee of carrying
out the program required under this section to a percentage
of such grant amounts of the grantee for such year, which may
not exceed 10 percent.
``(7) Prohibition of consideration of use for meeting
housing goals or duty to serve.--In determining compliance
with the housing goals under this subpart and the duty to
serve underserved markets under section 1335, the Director
may not consider any affordable housing fund grant amounts
used under this section for eligible activities under
subsection (g). The Director shall give credit toward the
achievement of such housing goals and such duty to serve
underserved markets to purchases by the enterprises of
mortgages for housing that receives funding from affordable
housing fund grant amounts, but only to the extent that such
purchases by the enterprises are funded other than with such
grant amounts.
``(8) Acceptable identification requirement for occupancy
or assistance.--
``(A) In general.--Any assistance provided with any
affordable housing grant amounts may not be made available
to, or on behalf of, any individual or household unless the
individual provides, or, in the case of a household, all
adult members of the household provide, personal
identification in one of the following forms:
``(i) Social security card with photo identification card
or real id act identification.--
``(I) A social security card accompanied by a photo
identification card issued by the Federal Government or a
State Government; or
``(II) A driver's license or identification card issued by
a State in the case of a State that is in compliance with
title II of the REAL ID Act of 2005 (title II of division B
of Public Law 109-13; 49 U.S.C. 30301 note).
``(ii) Passport.--A passport issued by the United States or
a foreign government.
``(iii) USCIS photo identification card.--A photo
identification card issued by the Secretary of Homeland
Security (acting through the Director of the United States
Citizenship and Immigration Services).
``(B) Regulations.--The Director shall, by regulation,
require that each grantee and recipient take such actions as
the Director considers necessary to ensure compliance with
the requirements of subparagraph (A).
``(j) Accountability of Recipients and Grantees.--
``(1) Recipients.--
``(A) Tracking of funds.--The Director shall--
``(i) require each grantee to develop and maintain a system
to ensure that each recipient of assistance from affordable
housing fund grant amounts of the grantee uses such amounts
in accordance with this section, the regulations issued under
this section, and any requirements or conditions under which
such amounts were provided; and
``(ii) establish minimum requirements for agreements,
between the grantee and recipients, regarding assistance from
the affordable housing fund grant amounts of the grantee,
which shall include--
``(I) appropriate continuing financial and project
reporting, record retention, and audit requirements for the
duration of the grant to the recipient to ensure compliance
with the limitations and requirements of this section and the
regulations under this section; and
``(II) any other requirements that the Director determines
are necessary to ensure appropriate grant administration and
compliance.
``(B) Misuse of funds.--
``(i) Reimbursement requirement.--If any recipient of
assistance from affordable housing fund grant amounts of a
grantee is determined, in accordance with clause (ii), to
have used any such amounts in a manner that is materially in
violation of this section, the regulations issued under this
section, or any requirements or conditions under which such
amounts were provided, the grantee shall require that, within
12 months after the determination of such misuse, the
recipient shall reimburse the grantee for such misused
amounts and return to the grantee any amounts from the
affordable housing fund grant amounts of the grantee that
remain unused or uncommitted for use. The remedies under this
clause are in addition to any other remedies that may be
available under law.
``(ii) Determination.--A determination is made in
accordance with this clause if the determination is--
``(I) made by the Director; or
``(II)(aa) made by the grantee;
``(bb) the grantee provides notification of the
determination to the Director for review, in the discretion
of the Director, of the determination; and
``(cc) the Director does not subsequently reverse the
determination.
``(2) Grantees.--
``(A) Report.--
``(i) In general.--The Director shall require each grantee
receiving affordable housing fund grant amounts for a year to
submit a report, for such year, to the Director that--
``(I) describes the activities funded under this section
during such year with the affordable housing fund grant
amounts of the grantee; and
``(II) the manner in which the grantee complied during such
year with the allocation plan established pursuant to
subsection (e) for the grantee.
``(ii) Public availability.--The Director shall make such
reports pursuant to this subparagraph publicly available.
``(B) Misuse of funds.--If the Director determines, after
reasonable notice and opportunity for hearing, that a grantee
has failed to comply substantially with any provision of this
section and until the Director is satisfied that there is no
longer any such failure to comply, the Director shall--
``(i) reduce the amount of assistance under this section to
the grantee by an amount equal to the amount affordable
housing fund grant amounts which were not used in accordance
with this section;
``(ii) require the grantee to repay the Director an amount
equal to the amount of the amount affordable housing fund
grant amounts which were not used in accordance with this
section;
``(iii) limit the availability of assistance under this
section to the grantee to activities or recipients not
affected by such failure to comply; or
``(iv) terminate any assistance under this section to the
grantee.
``(k) Capital Requirements.--The utilization or commitment
of amounts from the affordable housing fund shall not be
subject to the risk-based capital requirements established
pursuant to section 1361(a).
``(l) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) Affordable housing fund grant amounts.--The term
`affordable housing fund
[[Page H3251]]
grant amounts' means amounts from the affordable housing fund
established under subsection (a) that are provided to a
grantee pursuant to subsection (d)(3).
``(2) Grantee.--The term `grantee' means--
``(A) with respect to 2008, the Louisiana Housing Finance
Agency and the Mississippi Development Authority; and
``(B) with respect to the years referred to in subsection
(b)(1), other than 2008, each State (as such term is defined
in section 1303) and each federally recognized Indian tribe.
``(3) Recipient.--The term `recipient' means an entity
meeting the requirements under subsection (h) that receives
assistance from a grantee from affordable housing fund grant
amounts of the grantee.
``(4) Total mortgage portfolio.--The term `total mortgage
portfolio' means, with respect to a year, the sum, for all
mortgages outstanding during that year in any form, including
whole loans, mortgage-backed securities, participation
certificates, or other structured securities backed by
mortgages, of the dollar amount of the unpaid outstanding
principal balances under such mortgages. Such term includes
all such mortgages or securitized obligations, whether
retained in portfolio, or sold in any form. The Director is
authorized to promulgate rules further defining such term as
necessary to implement this section and to address market
developments.
``(5) Very-low income family.--The term `very low-income
family' has the meaning given such term in section 1303,
except that such term includes any family that resides in a
rural area that has an income that does not exceed the
poverty line (as such term is defined in section 673(2) of
the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C.
9902(2)), including any revision required by such section)
applicable to a family of the size involved.
``(m) Regulations.--
``(1) In general.--The Director, in consultation with the
Secretary of Housing and Urban Development, shall issue
regulations to carry out this section.
``(2) Required contents.--The regulations issued under this
subsection shall include--
``(A) a requirement that the Director ensure that the
program of each grantee for use of affordable housing fund
grant amounts of the grantee is audited not less than
annually to ensure compliance with this section;
``(B) authority for the Director to audit, provide for an
audit, or otherwise verify a grantee's activities, to ensure
compliance with this section;
``(C) requirements for a process for application to, and
selection by, each grantee for activities meeting the
grantee's priority housing needs to be funded with affordable
housing fund grant amounts of the grantee, which shall
provide for priority in funding to be based upon--
``(i) greatest impact;
``(ii) geographic diversity;
``(iii) ability to obligate amounts and undertake
activities so funded in a timely manner;
``(iv) in the case of rental housing projects under
subsection (g)(1), the extent to which rents for units in the
project funded are affordable, especially for extremely low-
income families;
``(v) in the case of rental housing projects under
subsection (g)(1), the extent of the duration for which such
rents will remain affordable;
``(vi) the extent to which the application makes use of
other funding sources; and
``(vii) the merits of an applicant's proposed eligible
activity;
``(D) requirements to ensure that amounts provided to a
grantee from the affordable housing fund that are used for
rental housing under subsection (g)(1) are used only for the
benefit of extremely low- and very-low income families;
``(E) limitations on public infrastructure development
activities that are eligible pursuant to subsection (g)(3)
for funding with affordable housing fund grant amounts and
requirements for the connection between such activities and
housing activities funded under paragraph (1) or (2) of
subsection (g); and
``(F) requirements and standards for establishment, by
grantees (including the grantees for 2008 pursuant to
subsection (l)(2)(A)), of performance goals, benchmarks, and
timetables for the production, preservation, and
rehabilitation of affordable rental and homeownership housing
with affordable housing fund grant amounts.
``(n) Enforcement of Requirements on Enterprise.--
Compliance by the enterprises with the requirements under
this section shall be enforceable under subpart C. Any
reference in such subpart to this part or to an order, rule,
or regulation under this part specifically includes this
section and any order, rule, or regulation under this
section.
``(o) Affordable Housing Trust Fund.--If, after the
enactment of the Federal Housing Finance Reform Act of 2008,
in any year, there is enacted any provision of Federal law
establishing an affordable housing trust fund other than
under this title for use only for grants to provide
affordable rental housing and affordable homeownership
opportunities, and the subsequent year is a year referred to
in subsection (b)(1), the Director shall in such subsequent
year and any remaining years referred to in subsection (b)(1)
transfer to such affordable housing trust fund the aggregate
amount allocated pursuant to subsection (b) in such year to
the affordable housing fund under this section, less any
amounts used pursuant to subsection (i)(1). For such
subsequent and remaining years, the provisions of subsections
(c) and (d) shall not apply. Notwithstanding any other
provision of law, assistance provided using amounts
transferred to such affordable housing trust fund pursuant to
this subsection may not be used for any of the activities
specified in clauses (i) through (vi) of subsection (i)(6).
Nothing in this subsection shall be construed to alter the
terms and conditions of the affordable housing fund under
this section or to extend the life of such fund.
``(p) Funding Accountability and Transparency.--Any grant
under this section to a grantee from the affordable housing
fund established under subsection (a), any assistance
provided to a recipient by a grantee from affordable housing
fund grant amounts, and any grant, award, or other assistance
from an affordable housing trust fund referred to in
subsection (o) shall be considered a Federal award for
purposes of the Federal Funding Accountability and
Transparency Act of 2006 (31 U.S.C. 6101 note). Upon the
request of the Director of the Office of Management and
Budget, the Director of the Federal Housing Finance Agency
shall obtain and provide such information regarding any such
grants, assistance, and awards as the Director of the Office
of Management and Budget considers necessary to comply with
the requirements of such Act, as applicable pursuant to the
preceding sentence.''.
(b) Timely Establishment of Affordable Housing Needs
Formula.--
(1) In general.--The Secretary of Housing and Urban
Development shall, not later than the effective date under
section 365 of this title, issue the regulations establishing
the affordable housing needs formulas in accordance with the
provisions of section 1337(c)(2) of the Housing and Community
Development Act of 1992, as such section is amended by
subsection (a) of this section.
(2) Effective date.--This subsection shall take effect on
the date of the enactment of this Act.
(c) REFCORP Payments.--Section 21B(f)(2) of the Federal
Home Loan Bank Act (12 U.S.C. 1441b(f)(2)) is amended--
(1) in subparagraph (E), by striking ``and (D)'' and
inserting ``(D), and (E)'';
(2) by redesignating subparagraph (E) as subparagraph (F);
and
(3) by inserting after subparagraph (D) the following new
subparagraph:
``(E) Payments by fannie mae and freddie mac.--To the
extent that the amounts available pursuant to subparagraphs
(A), (B), (C), and (D) are insufficient to cover the amount
of interest payments, each enterprise (as such term is
defined in section 1303 of the Housing and Community
Development Act of 1992 (42 U.S.C. 4502)) shall transfer to
the Funding Corporation in each calendar year the amounts
allocated for use under this subparagraph pursuant to section
1337(i)(1) of such Act.''.
(d) GAO Report.--The Comptroller General shall conduct a
study to determine the effects that the affordable housing
fund established under section 1337 of the Housing and
Community Development Act of 1992, as added by the amendment
made by subsection (a) of this section, will have on the
availability and affordability of credit for homebuyers,
including the effects on such credit of the requirement under
such section 1337(b) that the Federal National Mortgage
Association and Federal Home Loan Mortgage Corporation make
allocations of amounts to such fund based on the average
total mortgage portfolios, and the extent to which the costs
of such allocation requirement will be borne by such entities
or will be passed on to homebuyers. Not later than the
expiration of the 12-month period beginning on the date of
the enactment of this Act, the Comptroller General shall
submit a report to the Congress setting forth the results and
conclusions of such study. This subsection shall take effect
on the date of the enactment of this Act.
SEC. 341. CONSISTENCY WITH MISSION.
Subpart B of part 2 of subtitle A of title XIII of the
Housing and Community Development Act of 1992 (12 U.S.C. 4561
et seq.) is amended by adding after section 1337, as added by
the preceding provisions of this title, the following new
section:
``SEC. 1338. CONSISTENCY WITH MISSION.
``This subpart may not be construed to authorize an
enterprise to engage in any program or activity that
contravenes or is inconsistent with the Federal National
Mortgage Association Charter Act or the Federal Home Loan
Mortgage Corporation Act.''.
SEC. 342. ENFORCEMENT.
(a) Cease-and-Desist Proceedings.--Section 1341 of the
Housing and Community Development Act of 1992 (12 U.S.C.
4581) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Grounds for Issuance.--The Director may issue and
serve a notice of charges under this section upon an
enterprise if the Director determines--
``(1) the enterprise has failed to meet any housing goal
established under subpart B, following a written notice and
determination of such failure in accordance with section
1336;
``(2) the enterprise has failed to submit a report under
section 1314, following a notice of such failure, an
opportunity for comment by the enterprise, and a final
determination by the Director;
``(3) the enterprise has failed to submit the information
required under subsection (m) or (n) of section 309 of the
Federal National
[[Page H3252]]
Mortgage Association Charter Act, or subsection (e) or (f) of
section 307 of the Federal Home Loan Mortgage Corporation
Act;
``(4) the enterprise has violated any provision of this
part or any order, rule or regulation under this part;
``(5) the enterprise has failed to submit a housing plan
that complies with section 1336(c) within the applicable
period; or
``(6) the enterprise has failed to comply with a housing
plan under section 1336(c).'';
(2) in subsection (b)(2), by striking ``requiring the
enterprise to'' and all that follows through the end of the
paragraph and inserting the following: ``requiring the
enterprise to--
``(A) comply with the goal or goals;
``(B) submit a report under section 1314;
``(C) comply with any provision this part or any order,
rule or regulation under such part;
``(D) submit a housing plan in compliance with section
1336(c);
``(E) comply with a housing plan submitted under section
1336(c); or
``(F) provide the information required under subsection (m)
or (n) of section 309 of the Federal National Mortgage
Association Charter Act or subsection (e) or (f) of section
307 of the Federal Home Loan Mortgage Corporation Act, as
applicable.'';
(3) in subsection (c), by inserting ``date of the'' before
``service of the order''; and
(4) by striking subsection (d).
(b) Authority of Director To Enforce Notices and Orders.--
Section 1344 of the Housing and Community Development Act of
1992 (12 U.S.C. 4584) is amended by striking subsection (a)
and inserting the following new subsection:
``(a) Enforcement.--The Director may, in the discretion of
the Director, apply to the United States District Court for
the District of Columbia, or the United States district court
within the jurisdiction of which the headquarters of the
enterprise is located, for the enforcement of any effective
and outstanding notice or order issued under section 1341 or
1345, or request that the Attorney General of the United
States bring such an action. Such court shall have
jurisdiction and power to order and require compliance with
such notice or order.''.
(c) Civil Money Penalties.--Section 1345 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4585) is
amended--
(1) by striking subsections (a) and (b) and inserting the
following new subsections:
``(a) Authority.--The Director may impose a civil money
penalty, in accordance with the provisions of this section,
on any enterprise that has failed to--
``(1) meet any housing goal established under subpart B,
following a written notice and determination of such failure
in accordance with section 1336(b);
``(2) submit a report under section 1314, following a
notice of such failure, an opportunity for comment by the
enterprise, and a final determination by the Director;
``(3) submit the information required under subsection (m)
or (n) of section 309 of the Federal National Mortgage
Association Charter Act, or subsection (e) or (f) of section
307 of the Federal Home Loan Mortgage Corporation Act;
``(4) comply with any provision of this part or any order,
rule or regulation under this part;
``(5) submit a housing plan pursuant to section 1336(c)
within the required period; or
``(6) comply with a housing plan for the enterprise under
section 1336(c).
``(b) Amount of Penalty.--The amount of the penalty, as
determined by the Director, may not exceed--
``(1) for any failure described in paragraph (1), (5), or
(6) of subsection (a), $50,000 for each day that the failure
occurs; and
``(2) for any failure described in paragraph (2), (3), or
(4) of subsection (a), $20,000 for each day that the failure
occurs.'';
(2) in subsection (c)--
(A) in paragraph (1)--
(i) in subparagraph (A), by inserting ``and'' after the
semicolon at the end;
(ii) in subparagraph (B), by striking ``; and'' and
inserting a period; and
(iii) by striking subparagraph (C); and
(B) in paragraph (2), by inserting after the period at the
end the following: ``In determining the penalty under
subsection (a)(1), the Director shall give consideration to
the length of time the enterprise should reasonably take to
achieve the goal.'';
(3) in the first sentence of subsection (d)--
(A) by striking ``request the Attorney General of the
United States to'' and inserting ``, in the discretion of the
Director,''; and
(B) by inserting ``, or request that the Attorney General
of the United States bring such an action'' before the period
at the end;
(4) by striking subsection (f); and
(5) by redesignating subsection (g) as subsection (f).
(d) Enforcement of Subpoenas.--Section 1348(c) of the
Housing and Community Development Act of 1992 (12 U.S.C.
4588(c)) is amended--
(1) by striking ``request the Attorney General of the
United States to'' and inserting ``, in the discretion of the
Director,''; and
(2) by inserting ``or request that the Attorney General of
the United States bring such an action,'' after ``District of
Columbia,''.
(e) Conforming Amendment.--The heading for subpart C of
part 2 of subtitle A of title XIII of the Housing and
Community Development Act of 1992 is amended to read as
follows:
``Subpart C--Enforcement''.
SEC. 343. CONFORMING AMENDMENTS.
Part 2 of subtitle A of title XIII of the Housing and
Community Development Act of 1992 (12 U.S.C. 4541 et seq.) is
amended--
(1) by striking ``Secretary'' each place such term appears
in such part and inserting ``Director'';
(2) in the section heading for section 1323 (12 U.S.C.
4543), by inserting ``of enterprises'' before the period at
the end;
(3) by striking section 1327 (12 U.S.C. 4547);
(4) by striking section 1328 (12 U.S.C. 4548);
(5) by redesignating section 1329 (as amended by section
335) as section 1327;
(6) in sections 1345(c)(1)(A), 1346(a), and 1346(b) (12
U.S.C. 4585(c)(1)(A), 4586(a), and 4586(b)), by striking
``Secretary's'' each place such term appears and inserting
``Director's''; and
(7) by striking section 1349 (12 U.S.C. 4589).
CHAPTER 3--PROMPT CORRECTIVE ACTION
SEC. 345. CAPITAL CLASSIFICATIONS.
(a) In General.--Section 1364 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4614) is amended--
(1) in the heading for subsection (a), by striking ``In
General'' and inserting ``Enterprises''.
(2) in subsection (c)--
(A) by striking ``subsection (b)'' and inserting
``subsection (c)'';
(B) by striking ``enterprises'' and inserting ``regulated
entities''; and
(C) by striking the last sentence;
(3) by redesignating subsections (c) (as so amended by
paragraph (2) of this subsection) and (d) as subsections (d)
and (f), respectively;
(4) by striking subsection (b) and inserting the following
new subsections:
``(b) Federal Home Loan Banks.--
``(1) Establishment and criteria.--For purposes of this
subtitle, the Director shall, by regulation--
``(A) establish the capital classifications specified under
paragraph (2) for the Federal home loan banks;
``(B) establish criteria for each such capital
classification based on the amount and types of capital held
by a bank and the risk-based, minimum, and critical capital
levels for the banks and taking due consideration of the
capital classifications established under subsection (a) for
the enterprises, with such modifications as the Director
determines to be appropriate to reflect the difference in
operations between the banks and the enterprises; and
``(C) shall classify the Federal home loan banks according
to such capital classifications.
``(2) Classifications.--The capital classifications
specified under this paragraph are--
``(A) adequately capitalized;
``(B) undercapitalized;
``(C) significantly undercapitalized; and
``(D) critically undercapitalized.
``(c) Discretionary Classification.--
``(1) Grounds for reclassification.--The Director may
reclassify a regulated entity under paragraph (2) if--
``(A) at any time, the Director determines in writing that
the regulated entity is engaging in conduct that could result
in a rapid depletion of core or total capital or, in the case
of an enterprise, that the value of the property subject to
mortgages held or securitized by the enterprise has decreased
significantly;
``(B) after notice and an opportunity for hearing, the
Director determines that the regulated entity is in an unsafe
or unsound condition; or
``(C) pursuant to section 1371(b), the Director deems the
regulated entity to be engaging in an unsafe or unsound
practice.
``(2) Reclassification.--In addition to any other action
authorized under this title, including the reclassification
of a regulated entity for any reason not specified in this
subsection, if the Director takes any action described in
paragraph (1) the Director may classify a regulated entity--
``(A) as undercapitalized, if the regulated entity is
otherwise classified as adequately capitalized;
``(B) as significantly undercapitalized, if the regulated
entity is otherwise classified as undercapitalized; and
``(C) as critically undercapitalized, if the regulated
entity is otherwise classified as significantly
undercapitalized.''; and
(5) by inserting after subsection (d) (as so redesignated
by paragraph (3) of this subsection), the following new
subsection:
``(e) Restriction on Capital Distributions.--
``(1) In general.--A regulated entity shall make no capital
distribution if, after making the distribution, the regulated
entity would be undercapitalized.
``(2) Exception.--Notwithstanding paragraph (1), the
Director may permit a regulated entity, to the extent
appropriate or applicable, to repurchase, redeem, retire, or
otherwise acquire shares or ownership interests if the
repurchase, redemption, retirement, or other acquisition--
``(A) is made in connection with the issuance of additional
shares or obligations of the regulated entity in at least an
equivalent amount; and
``(B) will reduce the financial obligations of the
regulated entity or otherwise improve the financial condition
of the entity.''.
(b) Regulations.--Not later than the expiration of the 180-
day period beginning on the effective date under section 365,
the Director of the Federal Housing Finance Agency shall
issue regulations to carry out section 1364(b) of the Housing
and Community Development Act of 1992 (as added by paragraph
(4) of this
[[Page H3253]]
subsection), relating to capital classifications for the
Federal home loan banks.
SEC. 346. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED
REGULATED ENTITIES.
Section 1365 of the Housing and Community Development Act
of 1992 (12 U.S.C. 4615) is amended--
(1) in the section heading, by striking ``enterprises'' and
inserting ``regulated entities'';
(2) in subsection (a)--
(A) by redesignating paragraphs (1) and (2) as paragraphs
(2) and (3), respectively;
(B) by inserting before paragraph (2), as so redesignated
by subparagraph (A) of this paragraph, the following
paragraph:
``(1) Required monitoring.--The Director shall--
``(A) closely monitor the condition of any regulated entity
that is classified as undercapitalized;
``(B) closely monitor compliance with the capital
restoration plan, restrictions, and requirements imposed
under this section; and
``(C) periodically review the plan, restrictions, and
requirements applicable to the undercapitalized regulated
entity to determine whether the plan, restrictions, and
requirements are achieving the purpose of this section.'';
and
(C) by inserting at the end the following new paragraphs:
``(4) Restriction of asset growth.--A regulated entity that
is classified as undercapitalized shall not permit its
average total assets (as such term is defined in section
1316(b) during any calendar quarter to exceed its average
total assets during the preceding calendar quarter unless--
``(A) the Director has accepted the capital restoration
plan of the regulated entity;
``(B) any increase in total assets is consistent with the
plan; and
``(C) the ratio of total capital to assets for the
regulated entity increases during the calendar quarter at a
rate sufficient to enable the entity to become adequately
capitalized within a reasonable time.
``(5) Prior approval of acquisitions, new products, and new
activities.--A regulated entity that is classified as
undercapitalized shall not, directly or indirectly, acquire
any interest in any entity or initially offer any new product
(as such term is defined in section 1321(f)) or engage in any
new activity, service, undertaking, or offering unless--
``(A) the Director has accepted the capital restoration
plan of the regulated entity, the entity is implementing the
plan, and the Director determines that the proposed action is
consistent with and will further the achievement of the plan;
or
``(B) the Director determines that the proposed action will
further the purpose of this section.'';
(3) in the subsection heading for subsection (b), by
striking ``From Undercapitalized to Significantly
Undercapitalized''; and
(4) by striking subsection (c) and inserting the following
new subsection:
``(c) Other Discretionary Safeguards.--The Director may
take, with respect to a regulated entity that is classified
as undercapitalized, any of the actions authorized to be
taken under section 1366 with respect to a regulated entity
that is classified as significantly undercapitalized, if the
Director determines that such actions are necessary to carry
out the purpose of this subtitle.''.
SEC. 347. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY
UNDERCAPITALIZED REGULATED ENTITIES.
Section 1366 of the Housing and Community Development Act
of 1992 (12 U.S.C. 4616) is amended--
(1) in the section heading, by striking ``enterprises'' and
inserting ``regulated entities'';
(2) in subsection (a)(2)(A), by striking ``enterprise'' the
last place such term appears;
(3) in subsection (b)--
(A) in the subsection heading, by striking ``Discretionary
Supervisory Actions'' and inserting ``Specific Actions''.
(B) in the matter preceding paragraph (1), by striking
``may, at any time, take any'' and inserting ``shall carry
out this section by taking, at any time, one or more'';
(C) by redesignating paragraphs (5) and (6) as paragraphs
(6) and (7), respectively;
(D) by inserting after paragraph (4) the following new
paragraph:
``(5) Improvement of management.--Take one or more of the
following actions:
``(A) New election of board.--Order a new election for the
board of directors of the regulated entity.
``(B) Dismissal of directors or executive officers.--
Require the regulated entity to dismiss from office any
director or executive officer who had held office for more
than 180 days immediately before the entity became
undercapitalized. Dismissal under this subparagraph shall not
be construed to be a removal pursuant to the Director's
enforcement powers provided in section 1377.
``(C) Employ qualified executive officers.--Require the
regulated entity to employ qualified executive officers (who,
if the Director so specifies, shall be subject to approval by
the Director).''; and
(E) by inserting at the end the following new paragraph:
``(8) Other action.--Require the regulated entity to take
any other action that the Director determines will better
carry out the purpose of this section than any of the actions
specified in this paragraph.'';
(4) by redesignating subsection (c) as subsection (d); and
(5) by inserting after subsection (b) the following new
subsection:
``(c) Restriction on Compensation of Executive Officers.--A
regulated entity that is classified as significantly
undercapitalized may not, without prior written approval by
the Director--
``(1) pay any bonus to any executive officer; or
``(2) provide compensation to any executive officer at a
rate exceeding that officer's average rate of compensation
(excluding bonuses, stock options, and profit sharing) during
the 12 calendar months preceding the calendar month in which
the regulated entity became undercapitalized.''.
SEC. 348. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED
REGULATED ENTITIES.
(a) In General.--Section 1367 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4617) is amended to read
as follows:
``SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED
REGULATED ENTITIES.
``(a) Appointment of Agency as Conservator or Receiver.--
``(1) In general.--Notwithstanding any other provision of
Federal or State law, if any of the grounds under paragraph
(3) exist, at the discretion of the Director, the Director
may establish a conservatorship or receivership, as
appropriate, for the purpose of reorganizing, rehabilitating,
or winding up the affairs of a regulated entity.
``(2) Appointment.--In any conservatorship or receivership
established under this section, the Director shall appoint
the Agency as conservator or receiver.
``(3) Grounds for appointment.--The grounds for appointing
a conservator or receiver for a regulated entity are as
follows:
``(A) Assets insufficient for obligations.--The assets of
the regulated entity are less than the obligations of the
regulated entity to its creditors and others.
``(B) Substantial dissipation.--Substantial dissipation of
assets or earnings due to--
``(i) any violation of any provision of Federal or State
law; or
``(ii) any unsafe or unsound practice.
``(C) Unsafe or unsound condition.--An unsafe or unsound
condition to transact business.
``(D) Cease-and-desist orders.--Any willful violation of a
cease-and-desist order that has become final.
``(E) Concealment.--Any concealment of the books, papers,
records, or assets of the regulated entity, or any refusal to
submit the books, papers, records, or affairs of the
regulated entity, for inspection to any examiner or to any
lawful agent of the Director.
``(F) Inability to meet obligations.--The regulated entity
is likely to be unable to pay its obligations or meet the
demands of its creditors in the normal course of business.
``(G) Losses.--The regulated entity has incurred or is
likely to incur losses that will deplete all or substantially
all of its capital, and there is no reasonable prospect for
the regulated entity to become adequately capitalized (as
defined in section 1364(a)(1)).
``(H) Violations of law.--Any violation of any law or
regulation, or any unsafe or unsound practice or condition
that is likely to--
``(i) cause insolvency or substantial dissipation of assets
or earnings; or
``(ii) weaken the condition of the regulated entity.
``(I) Consent.--The regulated entity, by resolution of its
board of directors or its shareholders or members, consents
to the appointment.
``(J) Undercapitalization.--The regulated entity is
undercapitalized or significantly undercapitalized (as
defined in section 1364(a)(3) or in regulations issued
pursuant to section 1364(b), as applicable), and--
``(i) has no reasonable prospect of becoming adequately
capitalized;
``(ii) fails to become adequately capitalized, as required
by--
``(I) section 1365(a)(1) with respect to an
undercapitalized regulated entity; or
``(II) section 1366(a)(1) with respect to a significantly
undercapitalized regulated entity;
``(iii) fails to submit a capital restoration plan
acceptable to the Agency within the time prescribed under
section 1369C; or
``(iv) materially fails to implement a capital restoration
plan submitted and accepted under section 1369C.
``(K) Critical undercapitalization.--The regulated entity
is critically undercapitalized, as defined in section
1364(a)(4) or in regulations issued pursuant to section
1364(b), as applicable.
``(L) Money laundering.--The Attorney General notifies the
Director in writing that the regulated entity has been found
guilty of a criminal offense under section 1956 or 1957 of
title 18, United States Code, or section 5322 or 5324 of
title 31, United States Code.
``(4) Mandatory receivership.--
``(A) In general.--The Director shall appoint the Agency as
receiver for a regulated entity if the Director determines,
in writing, that--
``(i) the assets of the regulated entity are, and during
the preceding 30 calendar days have been, less than the
obligations of the regulated entity to its creditors and
others; or
``(ii) the regulated entity is not, and during the
preceding 30 calendar days has not been, generally paying the
debts of the regulated entity (other than debts that are the
subject of a bona fide dispute) as such debts become due.
``(B) Periodic determination required for critically under
capitalized regulated entity.--If a regulated entity is
critically
[[Page H3254]]
undercapitalized, the Director shall make a determination, in
writing, as to whether the regulated entity meets the
criteria specified in clause (i) or (ii) of subparagraph
(A)--
``(i) not later than 30 calendar days after the regulated
entity initially becomes critically undercapitalized; and
``(ii) at least once during each succeeding 30-calendar day
period.
``(C) Determination not required if receivership already in
place.--Subparagraph (B) shall not apply with respect to a
regulated entity in any period during which the Agency serves
as receiver for the regulated entity.
``(D) Receivership terminates conservatorship.--The
appointment under this section of the Agency as receiver of a
regulated entity shall immediately terminate any
conservatorship established under this title for the
regulated entity.
``(5) Judicial review.--
``(A) In general.--If the Agency is appointed conservator
or receiver under this section, the regulated entity may,
within 30 days of such appointment, bring an action in the
United States District Court for the judicial district in
which the principal place of business of such regulated
entity is located, or in the United States District Court for
the District of Columbia, for an order requiring the Agency
to remove itself as conservator or receiver.
``(B) Review.--Upon the filing of an action under
subparagraph (A), the court shall, upon the merits, dismiss
such action or direct the Agency to remove itself as such
conservator or receiver.
``(6) Directors not liable for acquiescing in appointment
of conservator or receiver.--The members of the board of
directors of a regulated entity shall not be liable to the
shareholders or creditors of the regulated entity for
acquiescing in or consenting in good faith to the appointment
of the Agency as conservator or receiver for that regulated
entity.
``(7) Agency not subject to any other federal agency.--When
acting as conservator or receiver, the Agency shall not be
subject to the direction or supervision of any other agency
of the United States or any State in the exercise of the
rights, powers, and privileges of the Agency.
``(b) Powers and Duties of the Agency as Conservator or
Receiver.--
``(1) Rulemaking authority of the agency.--The Agency may
prescribe such regulations as the Agency determines to be
appropriate regarding the conduct of conservatorships or
receiverships.
``(2) General powers.--
``(A) Successor to regulated entity.--The Agency shall, as
conservator or receiver, and by operation of law, immediately
succeed to--
``(i) all rights, titles, powers, and privileges of the
regulated entity, and of any stockholder, officer, or
director of such regulated entity with respect to the
regulated entity and the assets of the regulated entity; and
``(ii) title to the books, records, and assets of any other
legal custodian of such regulated entity.
``(B) Operate the regulated entity.--The Agency may, as
conservator or receiver--
``(i) take over the assets of and operate the regulated
entity with all the powers of the shareholders, the
directors, and the officers of the regulated entity and
conduct all business of the regulated entity;
``(ii) collect all obligations and money due the regulated
entity;
``(iii) perform all functions of the regulated entity in
the name of the regulated entity which are consistent with
the appointment as conservator or receiver; and
``(iv) preserve and conserve the assets and property of
such regulated entity.
``(C) Functions of officers, directors, and shareholders of
a regulated entity.--The Agency may, by regulation or order,
provide for the exercise of any function by any stockholder,
director, or officer of any regulated entity for which the
Agency has been named conservator or receiver.
``(D) Powers as conservator.--The Agency may, as
conservator, take such action as may be--
``(i) necessary to put the regulated entity in a sound and
solvent condition; and
``(ii) appropriate to carry on the business of the
regulated entity and preserve and conserve the assets and
property of the regulated entity, including, if two or more
Federal home loan banks have been placed in conservatorship
contemporaneously, merging two or more such banks into a
single Federal home loan bank.
``(E) Additional powers as receiver.--The Agency may, as
receiver, place the regulated entity in liquidation and
proceed to realize upon the assets of the regulated entity,
having due regard to the conditions of the housing finance
market.
``(F) Organization of new regulated entities.--The Agency
may, as receiver, organize a successor regulated entity that
will operate pursuant to subsection (i).
``(G) Transfer of assets and liabilities.--The Agency may,
as conservator or receiver, transfer any asset or liability
of the regulated entity in default without any approval,
assignment, or consent with respect to such transfer. Any
Federal home loan bank may, with the approval of the Agency,
acquire the assets of any Bank in conservatorship or
receivership, and assume the liabilities of such Bank.
``(H) Payment of valid obligations.--The Agency, as
conservator or receiver, shall, to the extent of proceeds
realized from the performance of contracts or sale of the
assets of a regulated entity, pay all valid obligations of
the regulated entity in accordance with the prescriptions and
limitations of this section.
``(I) Subpoena authority.--
``(i) In general.--
``(I) In general.--The Agency may, as conservator or
receiver, and for purposes of carrying out any power,
authority, or duty with respect to a regulated entity
(including determining any claim against the regulated entity
and determining and realizing upon any asset of any person in
the course of collecting money due the regulated entity),
exercise any power established under section 1348.
``(II) Applicability of law.--The provisions of section
1348 shall apply with respect to the exercise of any power
exercised under this subparagraph in the same manner as such
provisions apply under that section.
``(ii) Authority of director.--A subpoena or subpoena duces
tecum may be issued under clause (i) only by, or with the
written approval of, the Director, or the designee of the
Director.
``(iii) Rule of construction.--This subsection shall not be
construed to limit any rights that the Agency, in any
capacity, might otherwise have under section 1317 or 1379D.
``(J) Contracting for services.--The Agency may, as
conservator or receiver, provide by contract for the carrying
out of any of its functions, activities, actions, or duties
as conservator or receiver.
``(K) Incidental powers.--The Agency may, as conservator or
receiver--
``(i) exercise all powers and authorities specifically
granted to conservators or receivers, respectively, under
this section, and such incidental powers as shall be
necessary to carry out such powers; and
``(ii) take any action authorized by this section, which
the Agency determines is in the best interests of the
regulated entity or the Agency.
``(3) Authority of receiver to determine claims.--
``(A) In general.--The Agency may, as receiver, determine
claims in accordance with the requirements of this subsection
and any regulations prescribed under paragraph (4).
``(B) Notice requirements.--The receiver, in any case
involving the liquidation or winding up of the affairs of a
closed regulated entity, shall--
``(i) promptly publish a notice to the creditors of the
regulated entity to present their claims, together with
proof, to the receiver by a date specified in the notice
which shall be not less than 90 days after the publication of
such notice; and
``(ii) republish such notice approximately 1 month and 2
months, respectively, after the publication under clause (i).
``(C) Mailing required.--The receiver shall mail a notice
similar to the notice published under subparagraph (B)(i) at
the time of such publication to any creditor shown on the
books of the regulated entity--
``(i) at the last address of the creditor appearing in such
books; or
``(ii) upon discovery of the name and address of a claimant
not appearing on the books of the regulated entity within 30
days after the discovery of such name and address.
``(4) Rulemaking authority relating to determination of
claims.--Subject to subsection (c), the Director may
prescribe regulations regarding the allowance or disallowance
of claims by the receiver and providing for administrative
determination of claims and review of such determination.
``(5) Procedures for determination of claims.--
``(A) Determination period.--
``(i) In general.--Before the end of the 180-day period
beginning on the date on which any claim against a regulated
entity is filed with the Agency as receiver, the Agency shall
determine whether to allow or disallow the claim and shall
notify the claimant of any determination with respect to such
claim.
``(ii) Extension of time.--The period described in clause
(i) may be extended by a written agreement between the
claimant and the Agency.
``(iii) Mailing of notice sufficient.--The notification
requirements of clause (i) shall be deemed to be satisfied if
the notice of any determination with respect to any claim is
mailed to the last address of the claimant which appears--
``(I) on the books of the regulated entity;
``(II) in the claim filed by the claimant; or
``(III) in documents submitted in proof of the claim.
``(iv) Contents of notice of disallowance.--If any claim
filed under clause (i) is disallowed, the notice to the
claimant shall contain--
``(I) a statement of each reason for the disallowance; and
``(II) the procedures available for obtaining agency review
of the determination to disallow the claim or judicial
determination of the claim.
``(B) Allowance of proven claim.--The receiver shall allow
any claim received on or before the date specified in the
notice published under paragraph (3)(B)(i), or the date
specified in the notice required under paragraph (3)(C),
which is proved to the satisfaction of the receiver.
``(C) Disallowance of claims filed after end of filing
period.--Claims filed after the
[[Page H3255]]
date specified in the notice published under paragraph
(3)(B)(i), or the date specified under paragraph (3)(C),
shall be disallowed and such disallowance shall be final.
``(D) Authority to disallow claims.--
``(i) In general.--The receiver may disallow any portion of
any claim by a creditor or claim of security, preference, or
priority which is not proved to the satisfaction of the
receiver.
``(ii) Payments to less than fully secured creditors.--In
the case of a claim of a creditor against a regulated entity
which is secured by any property or other asset of such
regulated entity, the receiver--
``(I) may treat the portion of such claim which exceeds an
amount equal to the fair market value of such property or
other asset as an unsecured claim against the regulated
entity; and
``(II) may not make any payment with respect to such
unsecured portion of the claim other than in connection with
the disposition of all claims of unsecured creditors of the
regulated entity.
``(iii) Exceptions.--No provision of this paragraph shall
apply with respect to any extension of credit from any
Federal Reserve Bank, Federal home loan bank, or the Treasury
of the United States.
``(E) No judicial review of determination pursuant to
subparagraph (d).--No court may review the determination of
the Agency under subparagraph (D) to disallow a claim. This
subparagraph shall not affect the authority of a claimant to
obtain de novo judicial review of a claim pursuant to
paragraph (6).
``(F) Legal effect of filing.--
``(i) Statute of limitation tolled.--For purposes of any
applicable statute of limitations, the filing of a claim with
the receiver shall constitute a commencement of an action.
``(ii) No prejudice to other actions.--Subject to paragraph
(10), the filing of a claim with the receiver shall not
prejudice any right of the claimant to continue any action
which was filed before the date of the appointment of the
receiver, subject to the determination of claims by the
receiver.
``(6) Provision for judicial determination of claims.--
``(A) In general.--The claimant may file suit on a claim
(or continue an action commenced before the appointment of
the receiver) in the district or territorial court of the
United States for the district within which the principal
place of business of the regulated entity is located or the
United States District Court for the District of Columbia
(and such court shall have jurisdiction to hear such claim),
before the end of the 60-day period beginning on the earlier
of--
``(i) the end of the period described in paragraph
(5)(A)(i) with respect to any claim against a regulated
entity for which the Agency is receiver; or
``(ii) the date of any notice of disallowance of such claim
pursuant to paragraph (5)(A)(i).
``(B) Statute of limitations.--A claim shall be deemed to
be disallowed (other than any portion of such claim which was
allowed by the receiver), and such disallowance shall be
final, and the claimant shall have no further rights or
remedies with respect to such claim, if the claimant fails,
before the end of the 60-day period described under
subparagraph (A), to file suit on such claim (or continue an
action commenced before the appointment of the receiver).
``(7) Review of claims.--
``(A) Other review procedures.--
``(i) In general.--The Agency shall establish such
alternative dispute resolution processes as may be
appropriate for the resolution of claims filed under
paragraph (5)(A)(i).
``(ii) Criteria.--In establishing alternative dispute
resolution processes, the Agency shall strive for procedures
which are expeditious, fair, independent, and low cost.
``(iii) Voluntary binding or nonbinding procedures.--The
Agency may establish both binding and nonbinding processes,
which may be conducted by any government or private party.
All parties, including the claimant and the Agency, must
agree to the use of the process in a particular case.
``(B) Consideration of incentives.--The Agency shall seek
to develop incentives for claimants to participate in the
alternative dispute resolution process.
``(8) Expedited determination of claims.--
``(A) Establishment required.--The Agency shall establish a
procedure for expedited relief outside of the routine claims
process established under paragraph (5) for claimants who--
``(i) allege the existence of legally valid and enforceable
or perfected security interests in assets of any regulated
entity for which the Agency has been appointed receiver; and
``(ii) allege that irreparable injury will occur if the
routine claims procedure is followed.
``(B) Determination period.--Before the end of the 90-day
period beginning on the date any claim is filed in accordance
with the procedures established under subparagraph (A), the
Director shall--
``(i) determine--
``(I) whether to allow or disallow such claim; or
``(II) whether such claim should be determined pursuant to
the procedures established under paragraph (5); and
``(ii) notify the claimant of the determination, and if the
claim is disallowed, provide a statement of each reason for
the disallowance and the procedure for obtaining agency
review or judicial determination.
``(C) Period for filing or renewing suit.--Any claimant who
files a request for expedited relief shall be permitted to
file a suit, or to continue a suit filed before the
appointment of the receiver, seeking a determination of the
rights of the claimant with respect to such security interest
after the earlier of--
``(i) the end of the 90-day period beginning on the date of
the filing of a request for expedited relief; or
``(ii) the date the Agency denies the claim.
``(D) Statute of limitations.--If an action described under
subparagraph (C) is not filed, or the motion to renew a
previously filed suit is not made, before the end of the 30-
day period beginning on the date on which such action or
motion may be filed under subparagraph (B), the claim shall
be deemed to be disallowed as of the end of such period
(other than any portion of such claim which was allowed by
the receiver), such disallowance shall be final, and the
claimant shall have no further rights or remedies with
respect to such claim.
``(E) Legal effect of filing.--
``(i) Statute of limitation tolled.--For purposes of any
applicable statute of limitations, the filing of a claim with
the receiver shall constitute a commencement of an action.
``(ii) No prejudice to other actions.--Subject to paragraph
(10), the filing of a claim with the receiver shall not
prejudice any right of the claimant to continue any action
that was filed before the appointment of the receiver,
subject to the determination of claims by the receiver.
``(9) Payment of claims.--
``(A) In general.--The receiver may, in the discretion of
the receiver, and to the extent funds are available from the
assets of the regulated entity, pay creditor claims, in such
manner and amounts as are authorized under this section,
which are--
``(i) allowed by the receiver;
``(ii) approved by the Agency pursuant to a final
determination pursuant to paragraph (7) or (8); or
``(iii) determined by the final judgment of any court of
competent jurisdiction.
``(B) Agreements against the interest of the agency.--No
agreement that tends to diminish or defeat the interest of
the Agency in any asset acquired by the Agency as receiver
under this section shall be valid against the Agency unless
such agreement is in writing, and executed by an authorized
official of the regulated entity, except that such
requirements for qualified financial contracts shall be
applied in a manner consistent with reasonable business
trading practices in the financial contracts market.
``(C) Payment of dividends on claims.--The receiver may, in
the sole discretion of the receiver, pay from the assets of
the regulated entity dividends on proved claims at any time,
and no liability shall attach to the Agency, by reason of any
such payment, for failure to pay dividends to a claimant
whose claim is not proved at the time of any such payment.
``(D) Rulemaking authority of the director.--The Director
may prescribe such rules, including definitions of terms, as
the Director deems appropriate to establish a single uniform
interest rate for, or to make payments of post-insolvency
interest to creditors holding proven claims against the
receivership estates of regulated entities following
satisfaction by the receiver of the principal amount of all
creditor claims.
``(10) Suspension of legal actions.--
``(A) In general.--After the appointment of a conservator
or receiver for a regulated entity, the conservator or
receiver may, in any judicial action or proceeding to which
such regulated entity is or becomes a party, request a stay
for a period not to exceed--
``(i) 45 days, in the case of any conservator; and
``(ii) 90 days, in the case of any receiver.
``(B) Grant of stay by all courts required.--Upon receipt
of a request by any conservator or receiver under
subparagraph (A) for a stay of any judicial action or
proceeding in any court with jurisdiction of such action or
proceeding, the court shall grant such stay as to all
parties.
``(11) Additional rights and duties.--
``(A) Prior final adjudication.--The Agency shall abide by
any final unappealable judgment of any court of competent
jurisdiction which was rendered before the appointment of the
Agency as conservator or receiver.
``(B) Rights and remedies of conservator or receiver.--In
the event of any appealable judgment, the Agency as
conservator or receiver shall--
``(i) have all the rights and remedies available to the
regulated entity (before the appointment of such conservator
or receiver) and the Agency, including removal to Federal
court and all appellate rights; and
``(ii) not be required to post any bond in order to pursue
such remedies.
``(C) No attachment or execution.--No attachment or
execution may issue by any court upon assets in the
possession of the receiver.
``(D) Limitation on judicial review.--Except as otherwise
provided in this subsection, no court shall have jurisdiction
over--
``(i) any claim or action for payment from, or any action
seeking a determination of
[[Page H3256]]
rights with respect to, the assets of any regulated entity
for which the Agency has been appointed receiver; or
``(ii) any claim relating to any act or omission of such
regulated entity or the Agency as receiver.
``(E) Disposition of assets.--In exercising any right,
power, privilege, or authority as conservator or receiver in
connection with any sale or disposition of assets of a
regulated entity for which the Agency has been appointed
conservator or receiver, the Agency shall conduct its
operations in a manner which maintains stability in the
housing finance markets and, to the extent consistent with
that goal--
``(i) maximizes the net present value return from the sale
or disposition of such assets;
``(ii) minimizes the amount of any loss realized in the
resolution of cases; and
``(iii) ensures adequate competition and fair and
consistent treatment of offerors.
``(12) Statute of limitations for actions brought by
conservator or receiver.--
``(A) In general.--Notwithstanding any provision of any
contract, the applicable statute of limitations with regard
to any action brought by the Agency as conservator or
receiver shall be--
``(i) in the case of any contract claim, the longer of--
``(I) the 6-year period beginning on the date the claim
accrues; or
``(II) the period applicable under State law; and
``(ii) in the case of any tort claim, the longer of--
``(I) the 3-year period beginning on the date the claim
accrues; or
``(II) the period applicable under State law.
``(B) Determination of the date on which a claim accrues.--
For purposes of subparagraph (A), the date on which the
statute of limitations begins to run on any claim described
in such subparagraph shall be the later of--
``(i) the date of the appointment of the Agency as
conservator or receiver; or
``(ii) the date on which the cause of action accrues.
``(13) Revival of expired state causes of action.--
``(A) In general.--In the case of any tort claim described
under subparagraph (B) for which the statute of limitations
applicable under State law with respect to such claim has
expired not more than 5 years before the appointment of the
Agency as conservator or receiver, the Agency may bring an
action as conservator or receiver on such claim without
regard to the expiration of the statute of limitation
applicable under State law.
``(B) Claims described.--A tort claim referred to under
subparagraph (A) is a claim arising from fraud, intentional
misconduct resulting in unjust enrichment, or intentional
misconduct resulting in substantial loss to the regulated
entity.
``(14) Accounting and recordkeeping requirements.--
``(A) In general.--The Agency as conservator or receiver
shall, consistent with the accounting and reporting practices
and procedures established by the Agency, maintain a full
accounting of each conservatorship and receivership or other
disposition of a regulated entity in default.
``(B) Annual accounting or report.--With respect to each
conservatorship or receivership, the Agency shall make an
annual accounting or report available to the Board, the
Comptroller General of the United States, the Committee on
Banking, Housing, and Urban Affairs of the Senate, and the
Committee on Financial Services of the House of
Representatives.
``(C) Availability of reports.--Any report prepared under
subparagraph (B) shall be made available by the Agency upon
request to any shareholder of a regulated entity or any
member of the public.
``(D) Recordkeeping requirement.--After the end of the 6-
year period beginning on the date that the conservatorship or
receivership is terminated by the Director, the Agency may
destroy any records of such regulated entity which the
Agency, in the discretion of the Agency, determines to be
unnecessary unless directed not to do so by a court of
competent jurisdiction or governmental agency, or prohibited
by law.
``(15) Fraudulent transfers.--
``(A) In general.--The Agency, as conservator or receiver,
may avoid a transfer of any interest of a regulated entity-
affiliated party, or any person who the conservator or
receiver determines is a debtor of the regulated entity, in
property, or any obligation incurred by such party or person,
that was made within 5 years of the date on which the Agency
was appointed conservator or receiver, if such party or
person voluntarily or involuntarily made such transfer or
incurred such liability with the intent to hinder, delay, or
defraud the regulated entity, the Agency, the conservator, or
receiver.
``(B) Right of recovery.--To the extent a transfer is
avoided under subparagraph (A), the conservator or receiver
may recover, for the benefit of the regulated entity, the
property transferred, or, if a court so orders, the value of
such property (at the time of such transfer) from--
``(i) the initial transferee of such transfer or the
regulated entity-affiliated party or person for whose benefit
such transfer was made; or
``(ii) any immediate or mediate transferee of any such
initial transferee.
``(C) Rights of transferee or obligee.--The conservator or
receiver may not recover under subparagraph (B) from--
``(i) any transferee that takes for value, including
satisfaction or securing of a present or antecedent debt, in
good faith; or
``(ii) any immediate or mediate good faith transferee of
such transferee.
``(D) Rights under this paragraph.--The rights under this
paragraph of the conservator or receiver described under
subparagraph (A) shall be superior to any rights of a trustee
or any other party (other than any party which is a Federal
agency) under title 11, United States Code.
``(16) Attachment of assets and other injunctive relief.--
Subject to paragraph (17), any court of competent
jurisdiction may, at the request of the conservator or
receiver, issue an order in accordance with Rule 65 of the
Federal Rules of Civil Procedure, including an order placing
the assets of any person designated by the Agency or such
conservator under the control of the court, and appointing a
trustee to hold such assets.
``(17) Standards of proof.--Rule 65 of the Federal Rules of
Civil Procedure shall apply with respect to any proceeding
under paragraph (16) without regard to the requirement of
such rule that the applicant show that the injury, loss, or
damage is irreparable and immediate.
``(18) Treatment of claims arising from breach of contracts
executed by the receiver or conservator.--
``(A) In general.--Notwithstanding any other provision of
this subsection, any final and unappealable judgment for
monetary damages entered against a receiver or conservator
for the breach of an agreement executed or approved in
writing by such receiver or conservator after the date of its
appointment, shall be paid as an administrative expense of
the receiver or conservator.
``(B) No limitation of power.--Nothing in this paragraph
shall be construed to limit the power of a receiver or
conservator to exercise any rights under contract or law,
including to terminate, breach, cancel, or otherwise
discontinue such agreement.
``(19) General exceptions.--
``(A) Limitations.--The rights of a conservator or receiver
appointed under this section shall be subject to the
limitations on the powers of a receiver under sections 402
through 407 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (12 U.S.C. 4402 through 4407).
``(B) Mortgages held in trust.--
``(i) In general.--Any mortgage, pool of mortgages, or
interest in a pool of mortgages, held in trust, custodial, or
agency capacity by a regulated entity for the benefit of
persons other than the regulated entity shall not be
available to satisfy the claims of creditors generally.
``(ii) Holding of mortgages.--Any mortgage, pool of
mortgages, or interest in a pool of mortgages, described
under clause (i) shall be held by the conservator or receiver
appointed under this section for the beneficial owners of
such mortgage, pool of mortgages, or interest in a pool of
mortgages in accordance with the terms of the agreement
creating such trust, custodial, or other agency arrangement.
``(iii) Liability of receiver.--The liability of a receiver
appointed under this section for damages shall, in the case
of any contingent or unliquidated claim relating to the
mortgages held in trust, be estimated in accordance set forth
in the regulations of the Director.
``(c) Priority of Expenses and Unsecured Claims.--
``(1) In general.--Unsecured claims against a regulated
entity, or a receiver, that are proven to the satisfaction of
the receiver shall have priority in the following order:
``(A) Administrative expenses of the receiver.
``(B) Any other general or senior liability of the
regulated entity and claims of other Federal home loan banks
arising from their payment obligations (including joint and
several payment obligations).
``(C) Any obligation subordinated to general creditors.
``(D) Any obligation to shareholders or members arising as
a result of their status as shareholder or members.
``(2) Creditors similarly situated.--All creditors that are
similarly situated under paragraph (1) shall be treated in a
similar manner, except that the Agency may make such other
payments to creditors necessary to maximize the present value
return from the sale or disposition or such regulated
entity's assets or to minimize the amount of any loss
realized in the resolution of cases so long as all creditors
similarly situated receive not less than the amount provided
under subsection (e)(2).
``(3) Definition.--The term `administrative expenses of the
receiver' shall include the actual, necessary costs and
expenses incurred by the receiver in preserving the assets of
the regulated entity or liquidating or otherwise resolving
the affairs of the regulated entity. Such expenses shall
include obligations that are incurred by the receiver after
appointment as receiver that the Director determines are
necessary and appropriate to facilitate the smooth and
orderly liquidation or other resolution of the regulated
entity.
``(d) Provisions Relating to Contracts Entered Into Before
Appointment of Conservator or Receiver.--
``(1) Authority to repudiate contracts.--In addition to any
other rights a conservator
[[Page H3257]]
or receiver may have, the conservator or receiver for any
regulated entity may disaffirm or repudiate any contract or
lease--
``(A) to which such regulated entity is a party;
``(B) the performance of which the conservator or receiver,
in its sole discretion, determines to be burdensome; and
``(C) the disaffirmance or repudiation of which the
conservator or receiver determines, in its sole discretion,
will promote the orderly administration of the affairs of the
regulated entity.
``(2) Timing of repudiation.--The conservator or receiver
shall determine whether or not to exercise the rights of
repudiation under this subsection within a reasonable period
following such appointment.
``(3) Claims for damages for repudiation.--
``(A) In general.--Except as otherwise provided under
subparagraph (C) and paragraphs (4), (5), and (6), the
liability of the conservator or receiver for the
disaffirmance or repudiation of any contract pursuant to
paragraph (1) shall be--
``(i) limited to actual direct compensatory damages; and
``(ii) determined as of--
``(I) the date of the appointment of the conservator or
receiver; or
``(II) in the case of any contract or agreement referred to
in paragraph (8), the date of the disaffirmance or
repudiation of such contract or agreement.
``(B) No liability for other damages.--For purposes of
subparagraph (A), the term `actual direct compensatory
damages' shall not include--
``(i) punitive or exemplary damages;
``(ii) damages for lost profits or opportunity; or
``(iii) damages for pain and suffering.
``(C) Measure of damages for repudiation of financial
contracts.--In the case of any qualified financial contract
or agreement to which paragraph (8) applies, compensatory
damages shall be--
``(i) deemed to include normal and reasonable costs of
cover or other reasonable measures of damages utilized in the
industries for such contract and agreement claims; and
``(ii) paid in accordance with this subsection and
subsection (e), except as otherwise specifically provided in
this section.
``(4) Leases under which the regulated entity is the
lessee.--
``(A) In general.--If the conservator or receiver
disaffirms or repudiates a lease under which the regulated
entity was the lessee, the conservator or receiver shall not
be liable for any damages (other than damages determined
under subparagraph (B)) for the disaffirmance or repudiation
of such lease.
``(B) Payments of rent.--Notwithstanding subparagraph (A),
the lessor under a lease to which that subparagraph applies
shall--
``(i) be entitled to the contractual rent accruing before
the later of the date--
``(I) the notice of disaffirmance or repudiation is mailed;
or
``(II) the disaffirmance or repudiation becomes effective,
unless the lessor is in default or breach of the terms of the
lease;
``(ii) have no claim for damages under any acceleration
clause or other penalty provision in the lease; and
``(iii) have a claim for any unpaid rent, subject to all
appropriate offsets and defenses, due as of the date of the
appointment, which shall be paid in accordance with this
subsection and subsection (e).
``(5) Leases under which the regulated entity is the
lessor.--
``(A) In general.--If the conservator or receiver
repudiates an unexpired written lease of real property of the
regulated entity under which the regulated entity is the
lessor and the lessee is not, as of the date of such
repudiation, in default, the lessee under such lease may
either--
``(i) treat the lease as terminated by such repudiation; or
``(ii) remain in possession of the leasehold interest for
the balance of the term of the lease, unless the lessee
defaults under the terms of the lease after the date of such
repudiation.
``(B) Provisions applicable to lessee remaining in
possession.--If any lessee under a lease described under
subparagraph (A) remains in possession of a leasehold
interest under clause (ii) of such subparagraph--
``(i) the lessee--
``(I) shall continue to pay the contractual rent pursuant
to the terms of the lease after the date of the repudiation
of such lease; and
``(II) may offset against any rent payment which accrues
after the date of the repudiation of the lease, and any
damages which accrue after such date due to the
nonperformance of any obligation of the regulated entity
under the lease after such date; and
``(ii) the conservator or receiver shall not be liable to
the lessee for any damages arising after such date as a
result of the repudiation other than the amount of any offset
allowed under clause (i)(II).
``(6) Contracts for the sale of real property.--
``(A) In general.--If the conservator or receiver
repudiates any contract for the sale of real property and the
purchaser of such real property under such contract is in
possession, and is not, as of the date of such repudiation,
in default, such purchaser may either--
``(i) treat the contract as terminated by such repudiation;
or
``(ii) remain in possession of such real property.
``(B) Provisions applicable to purchaser remaining in
possession.--If any purchaser of real property under any
contract described under subparagraph (A) remains in
possession of such property under clause (ii) of such
subparagraph--
``(i) the purchaser--
``(I) shall continue to make all payments due under the
contract after the date of the repudiation of the contract;
and
``(II) may offset against any such payments any damages
which accrue after such date due to the nonperformance (after
such date) of any obligation of the regulated entity under
the contract; and
``(ii) the conservator or receiver shall--
``(I) not be liable to the purchaser for any damages
arising after such date as a result of the repudiation other
than the amount of any offset allowed under clause (i)(II);
``(II) deliver title to the purchaser in accordance with
the provisions of the contract; and
``(III) have no obligation under the contract other than
the performance required under subclause (II).
``(C) Assignment and sale allowed.--
``(i) In general.--No provision of this paragraph shall be
construed as limiting the right of the conservator or
receiver to assign the contract described under subparagraph
(A), and sell the property subject to the contract and the
provisions of this paragraph.
``(ii) No liability after assignment and sale.--If an
assignment and sale described under clause (i) is
consummated, the conservator or receiver shall have no
further liability under the contract described under
subparagraph (A), or with respect to the real property which
was the subject of such contract.
``(7) Provisions applicable to service contracts.--
``(A) Services performed before appointment.--In the case
of any contract for services between any person and any
regulated entity for which the Agency has been appointed
conservator or receiver, any claim of such person for
services performed before the appointment of the conservator
or the receiver shall be--
``(i) a claim to be paid in accordance with subsections (b)
and (e); and
``(ii) deemed to have arisen as of the date the conservator
or receiver was appointed.
``(B) Services performed after appointment and prior to
repudiation.--If, in the case of any contract for services
described under subparagraph (A), the conservator or receiver
accepts performance by the other person before the
conservator or receiver makes any determination to exercise
the right of repudiation of such contract under this
section--
``(i) the other party shall be paid under the terms of the
contract for the services performed; and
``(ii) the amount of such payment shall be treated as an
administrative expense of the conservatorship or
receivership.
``(C) Acceptance of performance no bar to subsequent
repudiation.--The acceptance by any conservator or receiver
of services referred to under subparagraph (B) in connection
with a contract described in such subparagraph shall not
affect the right of the conservator or receiver to repudiate
such contract under this section at any time after such
performance.
``(8) Certain qualified financial contracts.--
``(A) Rights of parties to contracts.--Subject to
paragraphs (9) and (10) and notwithstanding any other
provision of this Act, any other Federal law, or the law of
any State, no person shall be stayed or prohibited from
exercising--
``(i) any right such person has to cause the termination,
liquidation, or acceleration of any qualified financial
contract with a regulated entity that arises upon the
appointment of the Agency as receiver for such regulated
entity at any time after such appointment;
``(ii) any right under any security agreement or
arrangement or other credit enhancement relating to one or
more qualified financial contracts described in clause (i);
or
``(iii) any right to offset or net out any termination
value, payment amount, or other transfer obligation arising
under or in connection with 1 or more contracts and
agreements described in clause (i), including any master
agreement for such contracts or agreements.
``(B) Applicability of other provisions.--Paragraph (10) of
subsection (b) shall apply in the case of any judicial action
or proceeding brought against any receiver referred to under
subparagraph (A), or the regulated entity for which such
receiver was appointed, by any party to a contract or
agreement described under subparagraph (A)(i) with such
regulated entity.
``(C) Certain transfers not avoidable.--
``(i) In general.--Notwithstanding paragraph (11) or any
other Federal or State laws relating to the avoidance of
preferential or fraudulent transfers, the Agency, whether
acting as such or as conservator or receiver of a regulated
entity, may not avoid any transfer of money or other property
in connection with any qualified financial contract with a
regulated entity.
``(ii) Exception for certain transfers.--Clause (i) shall
not apply to any transfer of money or other property in
connection with any qualified financial contract with a
regulated entity if the Agency determines that the transferee
had actual intent to hinder, delay, or defraud such regulated
entity, the
[[Page H3258]]
creditors of such regulated entity, or any conservator or
receiver appointed for such regulated entity.
``(D) Certain contracts and agreements defined.--In this
subsection:
``(i) Qualified financial contract.--The term `qualified
financial contract' means any securities contract, commodity
contract, forward contract, repurchase agreement, swap
agreement, and any similar agreement that the Agency
determines by regulation, resolution, or order to be a
qualified financial contract for purposes of this paragraph.
``(ii) Securities contract.--The term `securities
contract'--
``(I) means a contract for the purchase, sale, or loan of a
security, a certificate of deposit, a mortgage loan, or any
interest in a mortgage loan, a group or index of securities,
certificates of deposit, or mortgage loans or interests
therein (including any interest therein or based on the value
thereof) or any option on any of the foregoing, including any
option to purchase or sell any such security, certificate of
deposit, mortgage loan, interest, group or index, or option,
and including any repurchase or reverse repurchase
transaction on any such security, certificate of deposit,
mortgage loan, interest, group or index, or option;
``(II) does not include any purchase, sale, or repurchase
obligation under a participation in a commercial mortgage
loan unless the Agency determines by regulation, resolution,
or order to include any such agreement within the meaning of
such term;
``(III) means any option entered into on a national
securities exchange relating to foreign currencies;
``(IV) means the guarantee by or to any securities clearing
agency of any settlement of cash, securities, certificates of
deposit, mortgage loans or interests therein, group or index
of securities, certificates of deposit, or mortgage loans or
interests therein (including any interest therein or based on
the value thereof) or option on any of the foregoing,
including any option to purchase or sell any such security,
certificate of deposit, mortgage loan, interest, group or
index, or option;
``(V) means any margin loan;
``(VI) means any other agreement or transaction that is
similar to any agreement or transaction referred to in this
clause;
``(VII) means any combination of the agreements or
transactions referred to in this clause;
``(VIII) means any option to enter into any agreement or
transaction referred to in this clause;
``(IX) means a master agreement that provides for an
agreement or transaction referred to in subclause (I), (III),
(IV), (V), (VI), (VII), or (VIII), together with all
supplements to any such master agreement, without regard to
whether the master agreement provides for an agreement or
transaction that is not a securities contract under this
clause, except that the master agreement shall be considered
to be a securities contract under this clause only with
respect to each agreement or transaction under the master
agreement that is referred to in subclause (I), (III), (IV),
(V), (VI), (VII), or (VIII); and
``(X) means any security agreement or arrangement or other
credit enhancement related to any agreement or transaction
referred to in this clause, including any guarantee or
reimbursement obligation in connection with any agreement or
transaction referred to in this clause.
``(iii) Commodity contract.--The term `commodity contract'
means--
``(I) with respect to a futures commission merchant, a
contract for the purchase or sale of a commodity for future
delivery on, or subject to the rules of, a contract market or
board of trade;
``(II) with respect to a foreign futures commission
merchant, a foreign future;
``(III) with respect to a leverage transaction merchant, a
leverage transaction;
``(IV) with respect to a clearing organization, a contract
for the purchase or sale of a commodity for future delivery
on, or subject to the rules of, a contract market or board of
trade that is cleared by such clearing organization, or
commodity option traded on, or subject to the rules of, a
contract market or board of trade that is cleared by such
clearing organization;
``(V) with respect to a commodity options dealer, a
commodity option;
``(VI) any other agreement or transaction that is similar
to any agreement or transaction referred to in this clause;
``(VII) any combination of the agreements or transactions
referred to in this clause;
``(VIII) any option to enter into any agreement or
transaction referred to in this clause;
``(IX) a master agreement that provides for an agreement or
transaction referred to in subclause (I), (II), (III), (IV),
(V), (VI), (VII), or (VIII), together with all supplements to
any such master agreement, without regard to whether the
master agreement provides for an agreement or transaction
that is not a commodity contract under this clause, except
that the master agreement shall be considered to be a
commodity contract under this clause only with respect to
each agreement or transaction under the master agreement that
is referred to in subclause (I), (II), (III), (IV), (V),
(VI), (VII), or (VIII); or
``(X) any security agreement or arrangement or other credit
enhancement related to any agreement or transaction referred
to in this clause, including any guarantee or reimbursement
obligation in connection with any agreement or transaction
referred to in this clause.
``(iv) Forward contract.--The term `forward contract'
means--
``(I) a contract (other than a commodity contract) for the
purchase, sale, or transfer of a commodity or any similar
good, article, service, right, or interest which is presently
or in the future becomes the subject of dealing in the
forward contract trade, or product or byproduct thereof, with
a maturity date more than 2 days after the date the contract
is entered into, including, a repurchase transaction, reverse
repurchase transaction, consignment, lease, swap, hedge
transaction, deposit, loan, option, allocated transaction,
unallocated transaction, or any other similar agreement;
``(II) any combination of agreements or transactions
referred to in subclauses (I) and (III);
``(III) any option to enter into any agreement or
transaction referred to in subclause (I) or (II);
``(IV) a master agreement that provides for an agreement or
transaction referred to in subclauses (I), (II), or (III),
together with all supplements to any such master agreement,
without regard to whether the master agreement provides for
an agreement or transaction that is not a forward contract
under this clause, except that the master agreement shall be
considered to be a forward contract under this clause only
with respect to each agreement or transaction under the
master agreement that is referred to in subclause (I), (II),
or (III); or
``(V) any security agreement or arrangement or other credit
enhancement related to any agreement or transaction referred
to in subclause (I), (II), (III), or (IV), including any
guarantee or reimbursement obligation in connection with any
agreement or transaction referred to in any such subclause.
``(v) Repurchase agreement.--The term `repurchase
agreement' (which definition also applies to a reverse
repurchase agreement)--
``(I) means an agreement, including related terms, which
provides for the transfer of one or more certificates of
deposit, mortgage-related securities (as such term is defined
in the Securities Exchange Act of 1934), mortgage loans,
interests in mortgage-related securities or mortgage loans,
eligible bankers' acceptances, qualified foreign government
securities or securities that are direct obligations of, or
that are fully guaranteed by, the United States or any agency
of the United States against the transfer of funds by the
transferee of such certificates of deposit, eligible bankers'
acceptances, securities, mortgage loans, or interests with a
simultaneous agreement by such transferee to transfer to the
transferor thereof certificates of deposit, eligible bankers'
acceptances, securities, mortgage loans, or interests as
described above, at a date certain not later than 1 year
after such transfers or on demand, against the transfer of
funds, or any other similar agreement;
``(II) does not include any repurchase obligation under a
participation in a commercial mortgage loan unless the Agency
determines by regulation, resolution, or order to include any
such participation within the meaning of such term;
``(III) means any combination of agreements or transactions
referred to in subclauses (I) and (IV);
``(IV) means any option to enter into any agreement or
transaction referred to in subclause (I) or (III);
``(V) means a master agreement that provides for an
agreement or transaction referred to in subclause (I), (III),
or (IV), together with all supplements to any such master
agreement, without regard to whether the master agreement
provides for an agreement or transaction that is not a
repurchase agreement under this clause, except that the
master agreement shall be considered to be a repurchase
agreement under this subclause only with respect to each
agreement or transaction under the master agreement that is
referred to in subclause (I), (III), or (IV); and
``(VI) means any security agreement or arrangement or other
credit enhancement related to any agreement or transaction
referred to in subclause (I), (III), (IV), or (V), including
any guarantee or reimbursement obligation in connection with
any agreement or transaction referred to in any such
subclause.
For purposes of this clause, the term `qualified foreign
government security' means a security that is a direct
obligation of, or that is fully guaranteed by, the central
government of a member of the Organization for Economic
Cooperation and Development (as determined by regulation or
order adopted by the appropriate Federal banking authority).
``(vi) Swap agreement.--The term `swap agreement' means--
``(I) any agreement, including the terms and conditions
incorporated by reference in any such agreement, which is an
interest rate swap, option, future, or forward agreement,
including a rate floor, rate cap, rate collar, cross-currency
rate swap, and basis swap; a spot, same day-tomorrow,
tomorrow-next, forward, or other foreign exchange or precious
metals agreement; a currency swap, option, future, or forward
agreement; an equity index or equity swap, option, future, or
forward agreement; a debt index or debt swap, option, future,
or forward agreement; a
[[Page H3259]]
total return, credit spread or credit swap, option, future,
or forward agreement; a commodity index or commodity swap,
option, future, or forward agreement; or a weather swap,
weather derivative, or weather option;
``(II) any agreement or transaction that is similar to any
other agreement or transaction referred to in this clause and
that is of a type that has been, is presently, or in the
future becomes, the subject of recurrent dealings in the swap
markets (including terms and conditions incorporated by
reference in such agreement) and that is a forward, swap,
future, or option on one or more rates, currencies,
commodities, equity securities or other equity instruments,
debt securities or other debt instruments, quantitative
measures associated with an occurrence, extent of an
occurrence, or contingency associated with a financial,
commercial, or economic consequence, or economic or financial
indices or measures of economic or financial risk or value;
``(III) any combination of agreements or transactions
referred to in this clause;
``(IV) any option to enter into any agreement or
transaction referred to in this clause;
``(V) a master agreement that provides for an agreement or
transaction referred to in subclause (I), (II), (III), or
(IV), together with all supplements to any such master
agreement, without regard to whether the master agreement
contains an agreement or transaction that is not a swap
agreement under this clause, except that the master agreement
shall be considered to be a swap agreement under this clause
only with respect to each agreement or transaction under the
master agreement that is referred to in subclause (I), (II),
(III), or (IV); and
``(VI) any security agreement or arrangement or other
credit enhancement related to any agreements or transactions
referred to in subclause (I), (II), (III), (IV), or (V),
including any guarantee or reimbursement obligation in
connection with any agreement or transaction referred to in
any such subclause.
Such term is applicable for purposes of this subsection only
and shall not be construed or applied so as to challenge or
affect the characterization, definition, or treatment of any
swap agreement under any other statute, regulation, or rule,
including the Securities Act of 1933, the Securities Exchange
Act of 1934, the Public Utility Holding Company Act of 1935,
the Trust Indenture Act of 1939, the Investment Company Act
of 1940, the Investment Advisers Act of 1940, the Securities
Investor Protection Act of 1970, the Commodity Exchange Act,
the Gramm-Leach-Bliley Act, and the Legal Certainty for Bank
Products Act of 2000.
``(vii) Treatment of master agreement as one agreement.--
Any master agreement for any contract or agreement described
in any preceding clause of this subparagraph (or any master
agreement for such master agreement or agreements), together
with all supplements to such master agreement, shall be
treated as a single agreement and a single qualified
financial contract. If a master agreement contains provisions
relating to agreements or transactions that are not
themselves qualified financial contracts, the master
agreement shall be deemed to be a qualified financial
contract only with respect to those transactions that are
themselves qualified financial contracts.
``(viii) Transfer.--The term `transfer' means every mode,
direct or indirect, absolute or conditional, voluntary or
involuntary, of disposing of or parting with property or with
an interest in property, including retention of title as a
security interest and foreclosure of the regulated entity's
equity of redemption.
``(E) Certain protections in event of appointment of
conservator.--Notwithstanding any other provision of this Act
(other than paragraph (13) of this subsection), any other
Federal law, or the law of any State, no person shall be
stayed or prohibited from exercising--
``(i) any right such person has to cause the termination,
liquidation, or acceleration of any qualified financial
contract with a regulated entity in a conservatorship based
upon a default under such financial contract which is
enforceable under applicable noninsolvency law;
``(ii) any right under any security agreement or
arrangement or other credit enhancement relating to one or
more such qualified financial contracts; or
``(iii) any right to offset or net out any termination
values, payment amounts, or other transfer obligations
arising under or in connection with such qualified financial
contracts.
``(F) Clarification.--No provision of law shall be
construed as limiting the right or power of the Agency, or
authorizing any court or agency to limit or delay, in any
manner, the right or power of the Agency to transfer any
qualified financial contract in accordance with paragraphs
(9) and (10) of this subsection or to disaffirm or repudiate
any such contract in accordance with subsection (d)(1) of
this section.
``(G) Walkaway clauses not effective.--
``(i) In general.--Notwithstanding the provisions of
subparagraphs (A) and (E), and sections 403 and 404 of the
Federal Deposit Insurance Corporation Improvement Act of
1991, no walkaway clause shall be enforceable in a qualified
financial contract of a regulated entity in default.
``(ii) Walkaway clause defined.--For purposes of this
subparagraph, the term `walkaway clause' means a provision in
a qualified financial contract that, after calculation of a
value of a party's position or an amount due to or from 1 of
the parties in accordance with its terms upon termination,
liquidation, or acceleration of the qualified financial
contract, either does not create a payment obligation of a
party or extinguishes a payment obligation of a party in
whole or in part solely because of such party's status as a
nondefaulting party.
``(9) Transfer of qualified financial contracts.--In making
any transfer of assets or liabilities of a regulated entity
in default which includes any qualified financial contract,
the conservator or receiver for such regulated entity shall
either--
``(A) transfer to 1 person--
``(i) all qualified financial contracts between any person
(or any affiliate of such person) and the regulated entity in
default;
``(ii) all claims of such person (or any affiliate of such
person) against such regulated entity under any such contract
(other than any claim which, under the terms of any such
contract, is subordinated to the claims of general unsecured
creditors of such regulated entity);
``(iii) all claims of such regulated entity against such
person (or any affiliate of such person) under any such
contract; and
``(iv) all property securing or any other credit
enhancement for any contract described in clause (i) or any
claim described in clause (ii) or (iii) under any such
contract; or
``(B) transfer none of the financial contracts, claims, or
property referred to under subparagraph (A) (with respect to
such person and any affiliate of such person).
``(10) Notification of transfer.--
``(A) In general.--If--
``(i) the conservator or receiver for a regulated entity in
default makes any transfer of the assets and liabilities of
such regulated entity, and
``(ii) the transfer includes any qualified financial
contract,
the conservator or receiver shall notify any person who is a
party to any such contract of such transfer by 5:00 p.m.
(eastern time) on the business day following the date of the
appointment of the receiver in the case of a receivership, or
the business day following such transfer in the case of a
conservatorship.
``(B) Certain rights not enforceable.--
``(i) Receivership.--A person who is a party to a qualified
financial contract with a regulated entity may not exercise
any right that such person has to terminate, liquidate, or
net such contract under paragraph (8)(A) of this subsection
or section 403 or 404 of the Federal Deposit Insurance
Corporation Improvement Act of 1991, solely by reason of or
incidental to the appointment of a receiver for the regulated
entity (or the insolvency or financial condition of the
regulated entity for which the receiver has been appointed)--
``(I) until 5:00 p.m. (eastern time) on the business day
following the date of the appointment of the receiver; or
``(II) after the person has received notice that the
contract has been transferred pursuant to paragraph (9)(A).
``(ii) Conservatorship.--A person who is a party to a
qualified financial contract with a regulated entity may not
exercise any right that such person has to terminate,
liquidate, or net such contract under paragraph (8)(E) of
this subsection or section 403 or 404 of the Federal Deposit
Insurance Corporation Improvement Act of 1991, solely by
reason of or incidental to the appointment of a conservator
for the regulated entity (or the insolvency or financial
condition of the regulated entity for which the conservator
has been appointed).
``(iii) Notice.--For purposes of this paragraph, the Agency
as receiver or conservator of a regulated entity shall be
deemed to have notified a person who is a party to a
qualified financial contract with such regulated entity if
the Agency has taken steps reasonably calculated to provide
notice to such person by the time specified in subparagraph
(A).
``(C) Business day defined.--For purposes of this
paragraph, the term `business day' means any day other than
any Saturday, Sunday, or any day on which either the New York
Stock Exchange or the Federal Reserve Bank of New York is
closed.
``(11) Disaffirmance or repudiation of qualified financial
contracts.--In exercising the rights of disaffirmance or
repudiation of a conservator or receiver with respect to any
qualified financial contract to which a regulated entity is a
party, the conservator or receiver for such institution shall
either--
``(A) disaffirm or repudiate all qualified financial
contracts between--
``(i) any person or any affiliate of such person; and
``(ii) the regulated entity in default; or
``(B) disaffirm or repudiate none of the qualified
financial contracts referred to in subparagraph (A) (with
respect to such person or any affiliate of such person).
``(12) Certain security interests not avoidable.--No
provision of this subsection shall be construed as permitting
the avoidance of any legally enforceable or perfected
security interest in any of the assets of any regulated
entity, except where such an interest is taken in
contemplation of the insolvency of the regulated entity, or
with the intent to hinder, delay, or defraud the regulated
entity or the creditors of such regulated entity.
``(13) Authority to enforce contracts.--
[[Page H3260]]
``(A) In general.--Notwithstanding any provision of a
contract providing for termination, default, acceleration, or
exercise of rights upon, or solely by reason of, insolvency
or the appointment of a conservator or receiver, the
conservator or receiver may enforce any contract or regulated
entity bond entered into by the regulated entity.
``(B) Certain rights not affected.--No provision of this
paragraph may be construed as impairing or affecting any
right of the conservator or receiver to enforce or recover
under a director's or officer's liability insurance contract
or surety bond under other applicable law.
``(C) Consent requirement.--
``(i) In general.--Except as otherwise provided under this
section, no person may exercise any right or power to
terminate, accelerate, or declare a default under any
contract to which a regulated entity is a party, or to obtain
possession of or exercise control over any property of the
regulated entity, or affect any contractual rights of the
regulated entity, without the consent of the conservator or
receiver, as appropriate, for a period of--
``(I) 45 days after the date of appointment of a
conservator; or
``(II) 90 days after the date of appointment of a receiver.
``(ii) Exceptions.--This paragraph shall--
``(I) not apply to a director's or officer's liability
insurance contract;
``(II) not apply to the rights of parties to any qualified
financial contracts under subsection (d)(8); and
``(III) not be construed as permitting the conservator or
receiver to fail to comply with otherwise enforceable
provisions of such contracts.
``(14) Savings clause.--The meanings of terms used in this
subsection are applicable for purposes of this subsection
only, and shall not be construed or applied so as to
challenge or affect the characterization, definition, or
treatment of any similar terms under any other statute,
regulation, or rule, including the Gramm-Leach-Bliley Act,
the Legal Certainty for Bank Products Act of 2000, the
securities laws (as that term is defined in section 3(a)(47)
of the Securities Exchange Act of 1934), and the Commodity
Exchange Act.
``(15) Exception for federal reserve and federal home loan
banks.--No provision of this subsection shall apply with
respect to--
``(A) any extension of credit from any Federal home loan
bank or Federal Reserve Bank to any regulated entity; or
``(B) any security interest in the assets of the regulated
entity securing any such extension of credit.
``(e) Valuation of Claims in Default.--
``(1) In general.--Notwithstanding any other provision of
Federal law or the law of any State, and regardless of the
method which the Agency determines to utilize with respect to
a regulated entity in default or in danger of default,
including transactions authorized under subsection (i), this
subsection shall govern the rights of the creditors of such
regulated entity.
``(2) Maximum liability.--The maximum liability of the
Agency, acting as receiver or in any other capacity, to any
person having a claim against the receiver or the regulated
entity for which such receiver is appointed shall equal the
lesser of--
``(A) the amount such claimant would have received if the
Agency had liquidated the assets and liabilities of such
regulated entity without exercising the authority of the
Agency under subsection (i) of this section; or
``(B) the amount of proceeds realized from the performance
of contracts or sale of the assets of the regulated entity.
``(f) Limitation on Court Action.--Except as provided in
this section or at the request of the Director, no court may
take any action to restrain or affect the exercise of powers
or functions of the Agency as a conservator or a receiver.
``(g) Liability of Directors and Officers.--
``(1) In general.--A director or officer of a regulated
entity may be held personally liable for monetary damages in
any civil action by, on behalf of, or at the request or
direction of the Agency, which action is prosecuted wholly or
partially for the benefit of the Agency--
``(A) acting as conservator or receiver of such regulated
entity, or
``(B) acting based upon a suit, claim, or cause of action
purchased from, assigned by, or otherwise conveyed by such
receiver or conservator,
for gross negligence, including any similar conduct or
conduct that demonstrates a greater disregard of a duty of
care (than gross negligence) including intentional tortious
conduct, as such terms are defined and determined under
applicable State law.
``(2) No limitation.--Nothing in this paragraph shall
impair or affect any right of the Agency under other
applicable law.
``(h) Damages.--In any proceeding related to any claim
against a director, officer, employee, agent, attorney,
accountant, appraiser, or any other party employed by or
providing services to a regulated entity, recoverable damages
determined to result from the improvident or otherwise
improper use or investment of any assets of the regulated
entity shall include principal losses and appropriate
interest.
``(i) Limited-Life Regulated Entities.--
``(1) Organization.--
``(A) Purpose.--If a regulated entity is in default, or if
the Agency anticipates that a regulated entity will default,
the Agency may organize a limited-life regulated entity with
those powers and attributes of the regulated entity in
default or in danger of default that the Director determines
necessary, subject to the provisions of this subsection. The
Director shall grant a temporary charter to the limited-life
regulated entity, and the limited-life regulated entity shall
operate subject to that charter.
``(B) Authorities.--Upon the creation of a limited-life
regulated entity under subparagraph (A), the limited-life
regulated entity may--
``(i) assume such liabilities of the regulated entity that
is in default or in danger of default as the Agency may, in
its discretion, determine to be appropriate, provided that
the liabilities assumed shall not exceed the amount of assets
of the limited-life regulated entity;
``(ii) purchase such assets of the regulated entity that is
in default, or in danger of default, as the Agency may, in
its discretion, determine to be appropriate; and
``(iii) perform any other temporary function which the
Agency may, in its discretion, prescribe in accordance with
this section.
``(2) Charter.--
``(A) Conditions.--The Agency may grant a temporary charter
if the Agency determines that the continued operation of the
regulated entity in default or in danger of default is in the
best interest of the national economy and the housing
markets.
``(B) Treatment as being in default for certain purposes.--
A limited-life regulated entity shall be treated as a
regulated entity in default at such times and for such
purposes as the Agency may, in its discretion, determine.
``(C) Management.--A limited-life regulated entity, upon
the granting of its charter, shall be under the management of
a board of directors consisting of not fewer than 5 nor more
than 10 members appointed by the Agency.
``(D) Bylaws.--The board of directors of a limited-life
regulated entity shall adopt such bylaws as may be approved
by the Agency.
``(3) Capital stock.--No capital stock need be paid into a
limited-life regulated entity by the Agency.
``(4) Investments.--Funds of a limited-life regulated
entity shall be kept on hand in cash, invested in obligations
of the United States or obligations guaranteed as to
principal and interest by the United States, or deposited
with the Agency, or any Federal Reserve bank.
``(5) Exempt status.--Notwithstanding any other provision
of Federal or State law, the limited-life regulated entity,
its franchise, property, and income shall be exempt from all
taxation now or hereafter imposed by the United States, by
any territory, dependency, or possession thereof, or by any
State, county, municipality, or local taxing authority.
``(6) Winding up.--
``(A) In general.--Subject to subparagraph (B), unless
Congress authorizes the sale of the capital stock of the
limited-life regulated entity, not later than 2 years after
the date of its organization, the Agency shall wind up the
affairs of the limited-life regulated entity.
``(B) Extension.--The Director may, in the discretion of
the Director, extend the status of the limited-life regulated
entity for 3 additional 1-year periods.
``(7) Transfer of assets and liabilities.--
``(A) In general.--
``(i) Transfer of assets and liabilities.--The Agency, as
receiver, may transfer any assets and liabilities of a
regulated entity in default, or in danger of default, to the
limited-life regulated entity in accordance with paragraph
(1).
``(ii) Subsequent transfers.--At any time after a charter
is transferred to a limited-life regulated entity, the
Agency, as receiver, may transfer any assets and liabilities
of such regulated entity in default, or in danger in default,
as the Agency may, in its discretion, determine to be
appropriate in accordance with paragraph (1).
``(iii) Effective without approval.--The transfer of any
assets or liabilities of a regulated entity in default, or in
danger of default, transferred to a limited-life regulated
entity shall be effective without any further approval under
Federal or State law, assignment, or consent with respect
thereto.
``(8) Proceeds.--To the extent that available proceeds from
the limited-life regulated entity exceed amounts required to
pay obligations, such proceeds may be paid to the regulated
entity in default, or in danger of default.
``(9) Powers.--
``(A) In general.--Each limited-life regulated entity
created under this subsection shall have all corporate powers
of, and be subject to the same provisions of law as, the
regulated entity in default or in danger of default to which
it relates, except that--
``(i) the Agency may--
``(I) remove the directors of a limited-life regulated
entity; and
``(II) fix the compensation of members of the board of
directors and senior management, as determined by the Agency
in its discretion, of a limited-life regulated entity;
``(ii) the Agency may indemnify the representatives for
purposes of paragraph (1)(B), and the directors, officers,
employees, and agents of a limited-life regulated entity on
such terms as the Agency determines to be appropriate; and
[[Page H3261]]
``(iii) the board of directors of a limited-life regulated
entity--
``(I) shall elect a chairperson who may also serve in the
position of chief executive officer, except that such person
shall not serve either as chairperson or as chief executive
officer without the prior approval of the Agency; and
``(II) may appoint a chief executive officer who is not
also the chairperson, except that such person shall not serve
as chief executive officer without the prior approval of the
Agency.
``(B) Stay of judicial action.--Any judicial action to
which a limited-life regulated entity becomes a party by
virtue of its acquisition of any assets or assumption of any
liabilities of a regulated entity in default shall be stayed
from further proceedings for a period of up to 45 days at the
request of the limited-life regulated entity. Such period may
be modified upon the consent of all parties.
``(10) Obtaining of credit and incurring of debt.--
``(A) In general.--The limited-life regulated entity may
obtain unsecured credit and incur unsecured debt in the
ordinary course of business.
``(B) Inability to obtain credit.--If the limited-life
regulated entity is unable to obtain unsecured credit the
Director may authorize the obtaining of credit or the
incurring of debt--
``(i) with priority over any or all administrative
expenses;
``(ii) secured by a lien on property that is not otherwise
subject to a lien; or
``(iii) secured by a junior lien on property that is
subject to a lien.
``(C) Limitations.--
``(i) In general.--The Director, after notice and a
hearing, may authorize the obtaining of credit or the
incurring of debt secured by a senior or equal lien on
property that is subject to a lien (other than mortgages that
collateralize the mortgage-backed securities issued or
guaranteed by the regulated entity) only if--
``(I) the limited-life regulated entity is unable to obtain
such credit otherwise; and
``(II) there is adequate protection of the interest of the
holder of the lien on the property which such senior or equal
lien is proposed to be granted.
``(ii) Burden of proof.--In any hearing under this
subsection, the Director has the burden of proof on the issue
of adequate protection.
``(D) Effect on debts and liens.--The reversal or
modification on appeal of an authorization under this
paragraph to obtain credit or incur debt, or of a grant under
this section of a priority or a lien, does not affect the
validity of any debt so incurred, or any priority or lien so
granted, to an entity that extended such credit in good
faith, whether or not such entity knew of the pendency of the
appeal, unless such authorization and the incurring of such
debt, or the granting of such priority or lien, were stayed
pending appeal.
``(11) Issuance of preferred debt.--A limited-life
regulated entity may, subject to the approval of the Director
and subject to such terms and conditions as the Director may
prescribe, issue notes, bonds, or other debt obligations of a
class to which all other debt obligations of the limited-life
regulated entity shall be subordinate in right and payment.
``(12) No federal status.--
``(A) Agency status.--A limited-life regulated entity is
not an agency, establishment, or instrumentality of the
United States.
``(B) Employee status.--Representatives for purposes of
paragraph (1)(B), interim directors, directors, officers,
employees, or agents of a limited-life regulated entity are
not, solely by virtue of service in any such capacity,
officers or employees of the United States. Any employee of
the Agency or of any Federal instrumentality who serves at
the request of the Agency as a representative for purposes of
paragraph (1)(B), interim director, director, officer,
employee, or agent of a limited-life regulated entity shall
not--
``(i) solely by virtue of service in any such capacity lose
any existing status as an officer or employee of the United
States for purposes of title 5, United States Code, or any
other provision of law; or
``(ii) receive any salary or benefits for service in any
such capacity with respect to a limited-life regulated entity
in addition to such salary or benefits as are obtained
through employment with the Agency or such Federal
instrumentality.
``(13) Additional powers.--In addition to any other powers
granted under this subsection, a limited-life regulated
entity may--
``(A) extend a maturity date or change in an interest rate
or other term of outstanding securities;
``(B) issue securities of the limited-life regulated
entity, for cash, for property, for existing securities, or
in exchange for claims or interests, or for any other
appropriate purposes; and
``(C) take any other action not inconsistent with this
section.
``(j) Other Exemptions.--When acting as a receiver, the
following provisions shall apply with respect to the Agency:
``(1) Exemption from taxation.--The Agency, including its
franchise, its capital, reserves, and surplus, and its
income, shall be exempt from all taxation imposed by any
State, country, municipality, or local taxing authority,
except that any real property of the Agency shall be subject
to State, territorial, county, municipal, or local taxation
to the same extent according to its value as other real
property is taxed, except that, notwithstanding the failure
of any person to challenge an assessment under State law of
the value of such property, and the tax thereon, shall be
determined as of the period for which such tax is imposed.
``(2) Exemption from attachment and liens.--No property of
the Agency shall be subject to levy, attachment, garnishment,
foreclosure, or sale without the consent of the Agency, nor
shall any involuntary lien attach to the property of the
Agency.
``(3) Exemption from penalties and fines.--The Agency shall
not be liable for any amounts in the nature of penalties or
fines, including those arising from the failure of any person
to pay any real property, personal property, probate, or
recording tax or any recording or filing fees when due.
``(k) Prohibition of Charter Revocation.--In no case may a
receiver appointed pursuant to this section revoke, annul, or
terminate the charter of a regulated entity.
``(l) Preservation of Bankruptcy Law .--Nothing in this Act
shall be construed to modify, impair, or supersede the
operation of any provision of title 11 of the United States
Code, or the operation of any provision of title 28 of such
Code that relates to cases under such title 11, except as
otherwise provided in section 1367(b) of this Act and except
that a regulated entity may not be a debtor under such title
11.''.
(b) Conforming Amendments.--
(1) Housing and community development act of 1992.--
Subtitle B of title XIII of the Housing and Community
Development Act of 1992 is amended by striking sections 1369
(12 U.S.C. 4619), 1369A (12 U.S.C. 4620), and 1369B (12
U.S.C. 4621).
(2) Federal home loan banks.--Section 25 of the Federal
Home Loan Bank Act (12 U.S.C. 1445) is amended to read as
follows:
``SEC. 25. SUCCESSION OF FEDERAL HOME LOAN BANKS.
``Each Federal Home Loan Bank shall have succession until
it is voluntarily merged with another Bank under this Act, or
until it is merged, reorganized, rehabilitated, liquidated,
or otherwise wound up by the Director in accordance with the
provisions of section 1367 of the Housing and Community
Development Act of 1992, or by further Act of Congress.''.
SEC. 349. CONFORMING AMENDMENTS.
Title XIII of the Housing and Community Development Act of
1992, as amended by the preceding provisions of this title,
is further amended--
(1) in sections 1365 (12 U.S.C. 4615) through 1369D (12
U.S.C. 4623), but not including section 1367 (12 U.S.C. 4617)
as amended by section 349 of this title--
(A) by striking ``An enterprise'' each place such term
appears and inserting ``A regulated entity'';
(B) by striking ``an enterprise'' each place such term
appears and inserting ``a regulated entity''; and
(C) by striking ``the enterprise'' each place such term
appears and inserting ``the regulated entity'';
(2) in section 1366 (12 U.S.C. 4616)--
(A) in subsection (b)(7), by striking ``section 1369
(excluding subsection (a)(1) and (2))'' and inserting
``section 1367''; and
(B) in subsection (d), by striking ``the enterprises'' and
inserting ``the regulated entities'';
(3) in section 1368(d) (12 U.S.C. 4618(d)), by striking
``Committee on Banking, Finance and Urban Affairs'' and
inserting ``Committee on Financial Services'';
(4) in section 1369C (12 U.S.C. 4622)--
(A) in subsection (a)(4), by striking ``activities
(including existing and new programs)'' and inserting
``activities, services, undertakings, and offerings
(including existing and new products (as such term is defined
in section 1321(f))''; and
(B) in subsection (c), by striking ``any enterprise'' and
inserting ``any regulated entity''; and
(5) in subsections (a) and (d) of section 1369D, by
striking ``section 1366 or 1367 or action under section
1369)'' each place such phrase appears and inserting
``section 1367)''.
CHAPTER 4--ENFORCEMENT ACTIONS
SEC. 351. CEASE-AND-DESIST PROCEEDINGS.
Section 1371 of the Housing and Community Development Act
of 1992 (12 U.S.C. 4631) is amended--
(1) by striking subsections (a) and (b) and inserting the
following new subsections:
``(a) Issuance for Unsafe or Unsound Practices and
Violations of Rules or Laws.--If, in the opinion of the
Director, a regulated entity or any regulated entity-
affiliated party is engaging or has engaged, or the Director
has reasonable cause to believe that the regulated entity or
any regulated entity-affiliated party is about to engage, in
an unsafe or unsound practice in conducting the business of
the regulated entity or is violating or has violated, or the
Director has reasonable cause to believe that the regulated
entity or any regulated entity-affiliated party is about to
violate, a law, rule, or regulation, or any condition imposed
in writing by the Director in connection with the granting of
any application or other request by the regulated entity or
any written agreement entered into with the Director, the
Director may issue and serve upon the regulated entity or
such party a notice of charges in respect thereof. The
Director may not, pursuant to this section, enforce
compliance
[[Page H3262]]
with any housing goal established under subpart B of part 2
of subtitle A of this title, with section 1336 or 1337 of
this title, with subsection (m) or (n) of section 309 of the
Federal National Mortgage Association Charter Act (12 U.S.C.
1723a(m), (n)), with subsection (e) or (f) of section 307 of
the Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1456(e), (f)), or with paragraph (5) of section 10(j) of the
Federal Home Loan Bank Act (12 U.S.C. 1430(j)).
``(b) Issuance for Unsatisfactory Rating.--If a regulated
entity receives, in its most recent report of examination, a
less-than-satisfactory rating for asset quality, management,
earnings, or liquidity, the Director may (if the deficiency
is not corrected) deem the regulated entity to be engaging in
an unsafe or unsound practice for purposes of this
subsection.'';
(2) in subsection (c)(2), by striking ``enterprise,
executive officer, or director'' and inserting ``regulated
entity or regulated entity-affiliated party''; and
(3) in subsection (d)--
(A) in the matter preceding paragraph (1), by striking
``enterprise, executive officer, or director'' and inserting
``regulated entity or regulated entity-affiliated party'';
(B) in paragraph (1)--
(i) by striking ``an executive officer or a director'' and
inserting ``a regulated entity affiliated party''; and
(ii) by inserting ``(including reimbursement of
compensation under section 1318)'' after ``reimbursement'';
(C) in paragraph (6), by striking ``and'' at the end;
(D) by redesignating paragraph (7) as paragraph (8); and
(E) by inserting after paragraph (6) the following new
paragraph:
``(7) to effect an attachment on a regulated entity or
regulated entity-affiliated party subject to an order under
this section or section 1372; and''.
SEC. 352. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.
Section 1372 of the Housing and Community Development Act
of 1992 (12 U.S.C. 4632) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Grounds for Issuance.--Whenever the Director
determines that the violation or threatened violation or the
unsafe or unsound practice or practices specified in the
notice of charges served upon the regulated entity or any
regulated entity-affiliated party pursuant to section
1371(a), or the continuation thereof, is likely to cause
insolvency or significant dissipation of assets or earnings
of the regulated entity, or is likely to weaken the condition
of the regulated entity prior to the completion of the
proceedings conducted pursuant to sections 1371 and 1373, the
Director may issue a temporary order requiring the regulated
entity or such party to cease and desist from any such
violation or practice and to take affirmative action to
prevent or remedy such insolvency, dissipation, condition, or
prejudice pending completion of such proceedings. Such order
may include any requirement authorized under section
1371(d).'';
(2) in subsection (b), by striking ``enterprise, executive
officer, or director'' and inserting ``regulated entity or
regulated entity-affiliated party'';
(3) in subsection (d)--
(A) by striking ``An enterprise, executive officer, or
director'' and inserting ``A regulated entity or regulated
entity-affiliated party''; and
(B) by striking ``the enterprise, executive officer, or
director'' and inserting ``the regulated entity or regulated
entity-affiliated party''; and
(4) by striking subsection (e) and in inserting the
following new subsection:
``(e) Enforcement.--In the case of violation or threatened
violation of, or failure to obey, a temporary cease-and-
desist order issued pursuant to this section, the Director
may apply to the United States District Court for the
District of Columbia or the United States district court
within the jurisdiction of which the headquarters of the
regulated entity is located, for an injunction to enforce
such order, and, if the court determines that there has been
such violation or threatened violation or failure to obey, it
shall be the duty of the court to issue such injunction.''.
SEC. 353. PREJUDGMENT ATTACHMENT.
The Housing and Community Development Act of 1992 is
amended by inserting after section 1375 (12 U.S.C. 4635) the
following new section:
``SEC. 1375A. PREJUDGMENT ATTACHMENT.
``(a) In General.--In any action brought pursuant to this
title, or in actions brought in aid of, or to enforce an
order in, any administrative or other civil action for money
damages, restitution, or civil money penalties brought
pursuant to this title, the court may, upon application of
the Director or Attorney General, as applicable, issue a
restraining order that--
``(1) prohibits any person subject to the proceeding from
withdrawing, transferring, removing, dissipating, or
disposing of any funds, assets or other property; and
``(2) appoints a person on a temporary basis to administer
the restraining order.
``(b) Standard.--
``(1) Showing.--Rule 65 of the Federal Rules of Civil
Procedure shall apply with respect to any proceeding under
subsection (a) without regard to the requirement of such rule
that the applicant show that the injury, loss, or damage is
irreparable and immediate.
``(2) State proceeding.--If, in the case of any proceeding
in a State court, the court determines that rules of civil
procedure available under the laws of such State provide
substantially similar protections to a party's right to due
process as Rule 65 (as modified with respect to such
proceeding by paragraph (1)), the relief sought under
subsection (a) may be requested under the laws of such
State.''.
SEC. 354. ENFORCEMENT AND JURISDICTION.
Section 1375 of the Housing and Community Development Act
of 1992 (12 U.S.C. 4635) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Enforcement.--The Director may, in the discretion of
the Director, apply to the United States District Court for
the District of Columbia, or the United States district court
within the jurisdiction of which the headquarters of the
regulated entity is located, for the enforcement of any
effective and outstanding notice or order issued under this
subtitle or subtitle B, or request that the Attorney General
of the United States bring such an action. Such court shall
have jurisdiction and power to order and require compliance
with such notice or order.''; and
(2) in subsection (b), by striking ``or 1376'' and
inserting ``1376, or 1377''.
SEC. 355. CIVIL MONEY PENALTIES.
Section 1376 of the Housing and Community Development Act
of 1992 (12 U.S.C. 4636) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1), by striking ``,
or any executive officer or director'' and inserting ``or any
regulated-entity affiliated party''; and
(B) in paragraph (1)--
(i) by striking ``the Federal National Mortgage Association
Charter Act, the Federal Home Loan Mortgage Corporation Act''
and inserting ``any provision of any of the authorizing
statutes'';
(ii) by striking ``or Act'' and inserting ``or statute'';
(iii) by striking ``or subsection'' and inserting ``,
subsection''; and
(iv) by inserting ``, or paragraph (5) or (12) of section
10(j) of the Federal Home Loan Bank Act'' before the
semicolon at the end;
(2) by striking subsection (b) and inserting the following
new subsection:
``(b) Amount of Penalty.--
``(1) First tier.--Any regulated entity which, or any
regulated entity-affiliated party who--
``(A) violates any provision of this title, any provision
of any of the authorizing statutes, or any order, condition,
rule, or regulation under any such title or statute, except
that the Director may not, pursuant to this section, enforce
compliance with any housing goal established under subpart B
of part 2 of subtitle A of this title, with section 1336 or
1337 of this title, with subsection (m) or (n) of section 309
of the Federal National Mortgage Association Charter Act (12
U.S.C. 1723a(m), (n)), with subsection (e) or (f) of section
307 of the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1456(e), (f)), or with paragraph (5) or (12) of
section 10(j) of the Federal Home Loan Bank Act;
``(B) violates any final or temporary order or notice
issued pursuant to this title;
``(C) violates any condition imposed in writing by the
Director in connection with the grant of any application or
other request by such regulated entity; or
``(D) violates any written agreement between the regulated
entity and the Director,
shall forfeit and pay a civil money penalty of not more than
$10,000 for each day during which such violation continues.
``(2) Second tier.--Notwithstanding paragraph (1)--
``(A) if a regulated entity, or a regulated entity-
affiliated party--
``(i) commits any violation described in any subparagraph
of paragraph (1);
``(ii) recklessly engages in an unsafe or unsound practice
in conducting the affairs of such regulated entity; or
``(iii) breaches any fiduciary duty; and
``(B) the violation, practice, or breach--
``(i) is part of a pattern of misconduct;
``(ii) causes or is likely to cause more than a minimal
loss to such regulated entity; or
``(iii) results in pecuniary gain or other benefit to such
party,
the regulated entity or regulated entity-affiliated party
shall forfeit and pay a civil penalty of not more than
$50,000 for each day during which such violation, practice,
or breach continues.
``(3) Third tier.--Notwithstanding paragraphs (1) and (2),
any regulated entity which, or any regulated entity-
affiliated party who--
``(A) knowingly--
``(i) commits any violation or engages in any conduct
described in any subparagraph of paragraph (1);
``(ii) engages in any unsafe or unsound practice in
conducting the affairs of such regulated entity; or
``(iii) breaches any fiduciary duty; and
``(B) knowingly or recklessly causes a substantial loss to
such regulated entity or a substantial pecuniary gain or
other benefit to such party by reason of such violation,
practice, or breach,
shall forfeit and pay a civil penalty in an amount not to
exceed the applicable maximum amount determined under
paragraph (4) for each day during which such violation,
practice, or breach continues.
``(4) Maximum amounts of penalties for any violation
described in paragraph (3).--
[[Page H3263]]
The maximum daily amount of any civil penalty which may be
assessed pursuant to paragraph (3) for any violation,
practice, or breach described in such paragraph is--
``(A) in the case of any person other than a regulated
entity, an amount not to exceed $2,000,000; and
``(B) in the case of any regulated entity, $2,000,000.'';
(3) in subsection (c)(1)(B), by striking ``enterprise,
executive officer, or director'' and inserting ``regulated
entity or regulated entity-affiliated party'';
(4) in subsection (d), by striking the first sentence and
inserting the following: ``If a regulated entity or regulated
entity-affiliated party fails to comply with an order of the
Director imposing a civil money penalty under this section,
after the order is no longer subject to review as provided
under subsection (c)(1) and section 1374, the Director may,
in the discretion of the Director, bring an action in the
United States District Court for the District of Columbia, or
the United States district court within the jurisdiction of
which the headquarters of the regulated entity is located, to
obtain a monetary judgment against the regulated entity or
regulated entity affiliated party and such other relief as
may be available, or request that the Attorney General of the
United States bring such an action.''; and
(5) in subsection (g), by striking ``subsection (b)(3)''
and inserting ``this section, unless authorized by the
Director by rule, regulation, or order''.
SEC. 356. REMOVAL AND PROHIBITION AUTHORITY.
(a) In General.--Subtitle C of title XIII of the Housing
and Community Development Act of 1992 is amended--
(1) by redesignating sections 1377, 1378, 1379, 1379A, and
1379B (12 U.S.C. 4637-41) as sections 1379, 1379A, 1379B,
1379C, and 1379D, respectively; and
(2) by inserting after section 1376 (12 U.S.C. 4636) the
following new section:
``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.
``(a) Authority To Issue Order.--Whenever the Director
determines that--
``(1) any regulated entity-affiliated party has, directly
or indirectly--
``(A) violated--
``(i) any law or regulation;
``(ii) any cease-and-desist order which has become final;
``(iii) any condition imposed in writing by the Director in
connection with the grant of any application or other request
by such regulated entity; or
``(iv) any written agreement between such regulated entity
and the Director;
``(B) engaged or participated in any unsafe or unsound
practice in connection with any regulated entity; or
``(C) committed or engaged in any act, omission, or
practice which constitutes a breach of such party's fiduciary
duty;
``(2) by reason of the violation, practice, or breach
described in any subparagraph of paragraph (1)--
``(A) such regulated entity has suffered or will probably
suffer financial loss or other damage; or
``(B) such party has received financial gain or other
benefit by reason of such violation, practice, or breach; and
``(3) such violation, practice, or breach--
``(A) involves personal dishonesty on the part of such
party; or
``(B) demonstrates willful or continuing disregard by such
party for the safety or soundness of such regulated entity,
the Director may serve upon such party a written notice of
the Director's intention to remove such party from office or
to prohibit any further participation by such party, in any
manner, in the conduct of the affairs of any regulated
entity.
``(b) Suspension Order.--
``(1) Suspension or prohibition authority.--If the Director
serves written notice under subsection (a) to any regulated
entity-affiliated party of the Director's intention to issue
an order under such subsection, the Director may--
``(A) suspend such party from office or prohibit such party
from further participation in any manner in the conduct of
the affairs of the regulated entity, if the Director--
``(i) determines that such action is necessary for the
protection of the regulated entity; and
``(ii) serves such party with written notice of the
suspension order; and
``(B) prohibit the regulated entity from releasing to or on
behalf of the regulated entity-affiliated party any
compensation or other payment of money or other thing of
current or potential value in connection with any
resignation, removal, retirement, or other termination of
employment or office of the party.
``(2) Effective period.--Any suspension order issued under
this subsection--
``(A) shall become effective upon service; and
``(B) unless a court issues a stay of such order under
subsection (g) of this section, shall remain in effect and
enforceable until--
``(i) the date the Director dismisses the charges contained
in the notice served under subsection (a) with respect to
such party; or
``(ii) the effective date of an order issued by the
Director to such party under subsection (a).
``(3) Copy of order.--If the Director issues a suspension
order under this subsection to any regulated entity-
affiliated party, the Director shall serve a copy of such
order on any regulated entity with which such party is
affiliated at the time such order is issued.
``(c) Notice, Hearing, and Order.--A notice of intention to
remove a regulated entity-affiliated party from office or to
prohibit such party from participating in the conduct of the
affairs of a regulated entity shall contain a statement of
the facts constituting grounds for such action, and shall fix
a time and place at which a hearing will be held on such
action. Such hearing shall be fixed for a date not earlier
than 30 days nor later than 60 days after the date of service
of such notice, unless an earlier or a later date is set by
the Director at the request of (1) such party, and for good
cause shown, or (2) the Attorney General of the United
States. Unless such party shall appear at the hearing in
person or by a duly authorized representative, such party
shall be deemed to have consented to the issuance of an order
of such removal or prohibition. In the event of such consent,
or if upon the record made at any such hearing the Director
shall find that any of the grounds specified in such notice
have been established, the Director may issue such orders of
suspension or removal from office, or prohibition from
participation in the conduct of the affairs of the regulated
entity, as it may deem appropriate, together with an order
prohibiting compensation described in subsection (b)(1)(B).
Any such order shall become effective at the expiration of 30
days after service upon such regulated entity and such party
(except in the case of an order issued upon consent, which
shall become effective at the time specified therein). Such
order shall remain effective and enforceable except to such
extent as it is stayed, modified, terminated, or set aside by
action of the Director or a reviewing court.
``(d) Prohibition of Certain Specific Activities.--Any
person subject to an order issued under this section shall
not--
``(1) participate in any manner in the conduct of the
affairs of any regulated entity;
``(2) solicit, procure, transfer, attempt to transfer,
vote, or attempt to vote any proxy, consent, or authorization
with respect to any voting rights in any regulated entity;
``(3) violate any voting agreement previously approved by
the Director; or
``(4) vote for a director, or serve or act as a regulated
entity-affiliated party.
``(e) Industry-Wide Prohibition.--
``(1) In general.--Except as provided in paragraph (2), any
person who, pursuant to an order issued under this section,
has been removed or suspended from office in a regulated
entity or prohibited from participating in the conduct of the
affairs of a regulated entity may not, while such order is in
effect, continue or commence to hold any office in, or
participate in any manner in the conduct of the affairs of,
any regulated entity.
``(2) Exception if director provides written consent.--If,
on or after the date an order is issued under this section
which removes or suspends from office any regulated entity-
affiliated party or prohibits such party from participating
in the conduct of the affairs of a regulated entity, such
party receives the written consent of the Director, the order
shall, to the extent of such consent, cease to apply to such
party with respect to the regulated entity described in the
written consent. If the Director grants such a written
consent, it shall publicly disclose such consent.
``(3) Violation of paragraph (1) treated as violation of
order.--Any violation of paragraph (1) by any person who is
subject to an order described in such subsection shall be
treated as a violation of the order.
``(f) Applicability.--This section shall only apply to a
person who is an individual, unless the Director specifically
finds that it should apply to a corporation, firm, or other
business enterprise.
``(g) Stay of Suspension and Prohibition of Regulated
Entity-Affiliated Party.--Within 10 days after any regulated
entity-affiliated party has been suspended from office and/or
prohibited from participation in the conduct of the affairs
of a regulated entity under this section, such party may
apply to the United States District Court for the District of
Columbia, or the United States district court for the
judicial district in which the headquarters of the regulated
entity is located, for a stay of such suspension and/or
prohibition and any prohibition under subsection (b)(1)(B)
pending the completion of the administrative proceedings
pursuant to the notice served upon such party under this
section, and such court shall have jurisdiction to stay such
suspension and/or prohibition.
``(h) Suspension or Removal of Regulated Entity-Affiliated
Party Charged With Felony.--
``(1) Suspension or prohibition.--
``(A) In general.--Whenever any regulated entity-affiliated
party is charged in any information, indictment, or
complaint, with the commission of or participation in a crime
involving dishonesty or breach of trust which is punishable
by imprisonment for a term exceeding one year under State or
Federal law, the Director may, if continued service or
participation by such party may pose a threat to the
regulated entity or impair public confidence in the regulated
entity, by written notice served upon such party--
``(i) suspend such party from office or prohibit such party
from further participation in any manner in the conduct of
the affairs of any regulated entity; and
``(ii) prohibit the regulated entity from releasing to or
on behalf of the regulated entity-affiliated party any
compensation or other payment of money or other thing of
[[Page H3264]]
current or potential value in connection with the period of
any such suspension or with any resignation, removal,
retirement, or other termination of employment or office of
the party.
``(B) Provisions applicable to notice.--
``(i) Copy.--A copy of any notice under paragraph (1)(A)
shall also be served upon the regulated entity.
``(ii) Effective period.--A suspension or prohibition under
subparagraph (A) shall remain in effect until the
information, indictment, or complaint referred to in such
subparagraph is finally disposed of or until terminated by
the Director.
``(2) Removal or prohibition.--
``(A) In general.--If a judgment of conviction or an
agreement to enter a pretrial diversion or other similar
program is entered against a regulated entity-affiliated
party in connection with a crime described in paragraph
(1)(A), at such time as such judgment is not subject to
further appellate review, the Director may, if continued
service or participation by such party may pose a threat to
the regulated entity or impair public confidence in the
regulated entity, issue and serve upon such party an order
that--
``(i) removes such party from office or prohibits such
party from further participation in any manner in the conduct
of the affairs of the regulated entity without the prior
written consent of the Director; and
``(ii) prohibits the regulated entity from releasing to or
on behalf of the regulated entity-affiliated party any
compensation or other payment of money or other thing of
current or potential value in connection with the termination
of employment or office of the party.
``(B) Provisions applicable to order.--
``(i) Copy.--A copy of any order under paragraph (2)(A)
shall also be served upon the regulated entity, whereupon the
regulated entity-affiliated party who is subject to the order
(if a director or an officer) shall cease to be a director or
officer of such regulated entity.
``(ii) Effect of acquittal.--A finding of not guilty or
other disposition of the charge shall not preclude the
Director from instituting proceedings after such finding or
disposition to remove such party from office or to prohibit
further participation in regulated entity affairs, and to
prohibit compensation or other payment of money or other
thing of current or potential value in connection with any
resignation, removal, retirement, or other termination of
employment or office of the party, pursuant to subsections
(a), (d), or (e) of this section.
``(iii) Effective period.--Any notice of suspension or
order of removal issued under this subsection shall remain
effective and outstanding until the completion of any hearing
or appeal authorized under paragraph (4) unless terminated by
the Director.
``(3) Authority of remaining board members.--If at any
time, because of the suspension of one or more directors
pursuant to this section, there shall be on the board of
directors of a regulated entity less than a quorum of
directors not so suspended, all powers and functions vested
in or exercisable by such board shall vest in and be
exercisable by the director or directors on the board not so
suspended, until such time as there shall be a quorum of the
board of directors. In the event all of the directors of a
regulated entity are suspended pursuant to this section, the
Director shall appoint persons to serve temporarily as
directors in their place and stead pending the termination of
such suspensions, or until such time as those who have been
suspended cease to be directors of the regulated entity and
their respective successors take office.
``(4) Hearing regarding continued participation.--Within 30
days from service of any notice of suspension or order of
removal issued pursuant to paragraph (1) or (2) of this
subsection, the regulated entity-affiliated party concerned
may request in writing an opportunity to appear before the
Director to show that the continued service to or
participation in the conduct of the affairs of the regulated
entity by such party does not, or is not likely to, pose a
threat to the interests of the regulated entity or threaten
to impair public confidence in the regulated entity. Upon
receipt of any such request, the Director shall fix a time
(not more than 30 days after receipt of such request, unless
extended at the request of such party) and place at which
such party may appear, personally or through counsel, before
one or more members of the Director or designated employees
of the Director to submit written materials (or, at the
discretion of the Director, oral testimony) and oral
argument. Within 60 days of such hearing, the Director shall
notify such party whether the suspension or prohibition from
participation in any manner in the conduct of the affairs of
the regulated entity will be continued, terminated, or
otherwise modified, or whether the order removing such party
from office or prohibiting such party from further
participation in any manner in the conduct of the affairs of
the regulated entity, and prohibiting compensation in
connection with termination will be rescinded or otherwise
modified. Such notification shall contain a statement of the
basis for the Director's decision, if adverse to such party.
The Director is authorized to prescribe such rules as may be
necessary to effectuate the purposes of this subsection.
``(i) Hearings and Judicial Review.--
``(1) Venue and procedure.--Any hearing provided for in
this section shall be held in the District of Columbia or in
the Federal judicial district in which the headquarters of
the regulated entity is located, unless the party afforded
the hearing consents to another place, and shall be conducted
in accordance with the provisions of chapter 5 of title 5,
United States Code. After such hearing, and within 90 days
after the Director has notified the parties that the case has
been submitted to it for final decision, it shall render its
decision (which shall include findings of fact upon which its
decision is predicated) and shall issue and serve upon each
party to the proceeding an order or orders consistent with
the provisions of this section. Judicial review of any such
order shall be exclusively as provided in this subsection.
Unless a petition for review is timely filed in a court of
appeals of the United States, as provided in paragraph (2),
and thereafter until the record in the proceeding has been
filed as so provided, the Director may at any time, upon such
notice and in such manner as it shall deem proper, modify,
terminate, or set aside any such order. Upon such filing of
the record, the Director may modify, terminate, or set aside
any such order with permission of the court.
``(2) Review of order.--Any party to any proceeding under
paragraph (1) may obtain a review of any order served
pursuant to paragraph (1) (other than an order issued with
the consent of the regulated entity or the regulated entity-
affiliated party concerned, or an order issued under
subsection (h) of this section) by the filing in the United
States Court of Appeals for the District of Columbia Circuit
or court of appeals of the United States for the circuit in
which the headquarters of the regulated entity is located,
within 30 days after the date of service of such order, a
written petition praying that the order of the Director be
modified, terminated, or set aside. A copy of such petition
shall be forthwith transmitted by the clerk of the court to
the Director, and thereupon the Director shall file in the
court the record in the proceeding, as provided in section
2112 of title 28, United States Code. Upon the filing of such
petition, such court shall have jurisdiction, which upon the
filing of the record shall (except as provided in the last
sentence of paragraph (1)) be exclusive, to affirm, modify,
terminate, or set aside, in whole or in part, the order of
the Director. Review of such proceedings shall be had as
provided in chapter 7 of title 5, United States Code. The
judgment and decree of the court shall be final, except that
the same shall be subject to review by the Supreme Court upon
certiorari, as provided in section 1254 of title 28, United
States Code.
``(3) Proceedings not treated as stay.--The commencement of
proceedings for judicial review under paragraph (2) shall
not, unless specifically ordered by the court, operate as a
stay of any order issued by the Director.''.
(b) Conforming Amendments.--
(1) 1992 act.--Section 1317(f) of the Housing and Community
Development Act of 1992 (12 U.S.C. 4517(f)) is amended by
striking ``section 1379B'' and inserting ``section 1379D''.
(2) Fannie mae charter act.--The second sentence of
subsection (b) of section 308 of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1723(b)) is
amended by striking ``The'' and inserting ``Except to the
extent that action under section 1377 of the Housing and
Community Development Act of 1992 temporarily results in a
lesser number, the''.
(3) Freddie mac act.--The second sentence of subparagraph
(A) of section 303(a)(2) of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1452(a)(2)(A)) is amended by
striking ``The'' and inserting ``Except to the extent that
action under section 1377 of the Housing and Community
Development Act of 1992 temporarily results in a lesser
number, the''.
SEC. 357. CRIMINAL PENALTY.
Subtitle C of title XIII of the Housing and Community
Development Act of 1992 (12 U.S.C. 4631 et seq.) is amended
by inserting after section 1377 (as added by the preceding
provisions of this title) the following new section:
``SEC. 1378. CRIMINAL PENALTY.
``Whoever, being subject to an order in effect under
section 1377, without the prior written approval of the
Director, knowingly participates, directly or indirectly, in
any manner (including by engaging in an activity specifically
prohibited in such an order) in the conduct of the affairs of
any regulated entity shall be fined not more than $1,000,000,
imprisoned for not more than 5 years, or both.''.
SEC. 358. SUBPOENA AUTHORITY.
Section 1379D(c) of the Housing and Community Development
Act of 1992 (12 U.S.C. 4641(c)), as so redesignated by
section 356(a)(1) of this title, is further amended--
(1) by striking ``request the Attorney General of the
United States to'' and inserting ``, in the discretion of the
Director,'';
(2) by inserting ``or request that the Attorney General of
the United States bring such an action,'' after ``District of
Columbia,''; and
(3) by striking ``or may, under the direction and control
of the Attorney General, bring such an action''.
SEC. 359. CONFORMING AMENDMENTS.
Subtitle C of title XIII of the Housing and Community
Development Act of 1992 (12 U.S.C. 4631 et seq.), as amended
by the preceding provisions of this title, is amended--
(1) in section 1372(c)(1) (12 U.S.C. 4632(c)), by striking
``that enterprise'' and inserting ``that regulated entity'';
[[Page H3265]]
(2) in section 1379 (12 U.S.C. 4637), as so redesignated by
section 356(a)(1) of this title--
(A) by inserting ``, or of a regulated entity-affiliated
party,'' before ``shall not affect''; and
(B) by striking ``such director or executive officer'' each
place such term appears and inserting ``such director,
executive officer, or regulated entity-affiliated party'';
(3) in section 1379A (12 U.S.C. 4638), as so redesignated
by section 356(a)(1) of this title, by inserting ``or against
a regulated entity-affiliated party,'' before ``or impair'';
(4) by striking ``An enterprise'' each place such term
appears in such subtitle and inserting ``A regulated
entity'';
(5) by striking ``an enterprise'' each place such term
appears in such subtitle and inserting ``a regulated
entity'';
(6) by striking ``the enterprise'' each place such term
appears in such subtitle and inserting ``the regulated
entity''; and
(7) by striking ``any enterprise'' each place such term
appears in such subtitle and inserting ``any regulated
entity''.
CHAPTER 5--GENERAL PROVISIONS
SEC. 361. BOARDS OF ENTERPRISES.
(a) Fannie Mae.--
(1) In general.--Section 308(b) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1723(b)) is
amended--
(A) in the first sentence, by striking ``eighteen persons,
five of whom shall be appointed annually by the President of
the United States, and the remainder of whom'' and inserting
``13 persons, or such other number that the Director
determines appropriate, who'';
(B) in the second sentence, by striking ``appointed by the
President'';
(C) in the third sentence--
(i) by striking ``appointed or''; and
(ii) by striking ``, except that any such appointed member
may be removed from office by the President for good cause'';
(D) in the fourth sentence, by striking ``elective''; and
(E) by striking the fifth sentence.
(2) Transitional provision.--The amendments made by
paragraph (1) shall not apply to any appointed position of
the board of directors of the Federal National Mortgage
Association until the expiration of the annual term for such
position during which the effective date under section 365
occurs.
(b) Freddie Mac.--
(1) In general.--Section 303(a)(2) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1452(a)(2)) is amended--
(A) in subparagraph (A)--
(i) in the first sentence, by striking ``18 persons, 5 of
whom shall be appointed annually by the President of the
United States and the remainder of whom'' and inserting ``13
persons, or such other number as the Director determines
appropriate, who''; and
(ii) in the second sentence, by striking ``appointed by the
President of the United States'';
(B) in subparagraph (B)--
(i) by striking ``such or''; and
(ii) by striking ``, except that any appointed member may
be removed from office by the President for good cause''; and
(C) in subparagraph (C)--
(i) by striking the first sentence; and
(ii) by striking ``elective''.
(2) Transitional provision.--The amendments made by
paragraph (1) shall not apply to any appointed position of
the board of directors of the Federal Home Loan Mortgage
Corporation until the expiration of the annual term for such
position during which the effective date under section 365
occurs.
SEC. 362. REPORT ON PORTFOLIO OPERATIONS, SAFETY AND
SOUNDNESS, AND MISSION OF ENTERPRISES.
Not later than the expiration of the 12-month period
beginning on the effective date under section 365, the
Director of the Federal Housing Finance Agency shall submit a
report to the Congress which shall include--
(1) a description of the portfolio holdings of the
enterprises (as such term is defined in section 1303 of the
Housing and Community Development Act of 1992 (12 U.S.C.
4502) in mortgages (including whole loans and mortgage-backed
securities), non-mortgages, and other assets;
(2) a description of the risk implications for the
enterprises of such holdings and the consequent risk
management undertaken by the enterprises (including the use
of derivatives for hedging purposes), compared with off-
balance sheet liabilities of the enterprises (including
mortgage-backed securities guaranteed by the enterprises);
(3) an analysis of portfolio holdings for safety and
soundness purposes;
(4) an assessment of whether portfolio holdings fulfill the
mission purposes of the enterprises under the Federal
National Mortgage Association Charter Act and the Federal
Home Loan Mortgage Corporation Act; and
(5) an analysis of the potential systemic risk implications
for the enterprises, the housing and capital markets, and the
financial system of portfolio holdings, and whether such
holdings should be limited or reduced over time.
SEC. 363. CONFORMING AND TECHNICAL AMENDMENTS.
(a) 1992 Act.--Title XIII of the Housing and Community
Development Act of 1992 is amended by striking section 1383
(12 U.S.C. 1451 note).
(b) Title 18, United States Code.--Section 1905 of title
18, United States Code, is amended by striking ``Office of
Federal Housing Enterprise Oversight'' and inserting
``Federal Housing Finance Agency''.
(c) Flood Disaster Protection Act of 1973.--Section
102(f)(3)(A) of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a(f)(3)(A)) is amended by striking ``Director of
the Office of Federal Housing Enterprise Oversight of the
Department of Housing and Urban Development'' and inserting
``Director of the Federal Housing Finance Agency''.
(d) Department of Housing and Urban Development Act.--
Section 5 of the Department of Housing and Urban Development
Act (42 U.S.C. 3534) is amended by striking subsection (d).
(e) Title 5, United States Code.--
(1) Director's pay rate.--Section 5313 of title 5, United
States Code, is amended by striking the item relating to the
Director of the Office of Federal Housing Enterprise
Oversight, Department of Housing and Urban Development and
inserting the following new item:
``Director of the Federal Housing Finance Agency.''.
(2) Exclusion from senior executive service.--Section
3132(a)(1)(D) of title 5, United States Code, is amended--
(A) by striking ``the Federal Housing Finance Board,''; and
(B) by striking ``the Office of Federal Housing Enterprise
Oversight of the Department of Housing and Urban
Development'' and inserting ``the Federal Housing Finance
Agency''.
(f) Inspector General Act of 1978.--Section 8G(a)(2) of the
Inspector General Act of 1978 (5 U.S.C. App.) is amended by
striking ``Federal Housing Finance Board'' and inserting
``Federal Housing Finance Agency''.
(g) Federal Deposit Insurance Act.--Section 11(t)(2)(A) of
the Federal Deposit Insurance Act (12 U.S.C.1821(t)(2)(A)) is
amended by adding at the end the following new clause:
``(vii) The Federal Housing Finance Agency.''.
(h) 1997 Emergency Supplemental Appropriations Act.--
Section 10001 of the 1997 Emergency Supplemental
Appropriations Act for Recovery From Natural Disasters, and
for Overseas Peacekeeping Efforts, Including Those In Bosnia
(42 U.S.C. 3548) is amended--
(1) by striking ``the Government National Mortgage
Association, and the Office of Federal Housing Enterprise
Oversight'' and inserting ``and the Government National
Mortgage Association''; and
(2) by striking ``, the Government National Mortgage
Association, or the Office of Federal Housing Enterprise
Oversight'' and inserting ``or the Government National
Mortgage Association''.
(i) National Homeownership Trust Act.--Section 302(b)(4) of
the Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12851(b)(4)) is amended by striking ``the chairperson
of the Federal Housing Finance Board'' and inserting ``the
Director of the Federal Housing Finance Agency''.
SEC. 364. STUDY OF ALTERNATIVE SECONDARY MARKET SYSTEMS.
(a) In General.--The Director of the Federal Housing
Finance Agency, in consultation with the Board of Governors
of the Federal Reserve System, the Secretary of the Treasury,
and the Secretary of Housing and Urban Development, shall
conduct a comprehensive study of the effects on financial and
housing finance markets of alternatives to the current
secondary market system for housing finance, taking into
consideration changes in the structure of financial and
housing finance markets and institutions since the creation
of the Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation.
(b) Contents.--The study under this section shall--
(1) include, among the alternatives to the current
secondary market system analyzed--
(A) repeal of the chartering Acts for the Federal National
Mortgage Association and the Federal Home Loan Mortgage
Corporation;
(B) establishing bank-like mechanisms for granting new
charters for limited purposed mortgage securitization
entities;
(C) permitting the Director of the Federal Housing Finance
Agency to grant new charters for limited purpose mortgage
securitization entities, which shall include analyzing the
terms on which such charters should be granted, including
whether such charters should be sold, or whether such
charters and the charters for the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation
should be taxed or otherwise assessed a monetary price; and
(D) such other alternatives as the Director considers
appropriate;
(2) examine all of the issues involved in making the
transition to a completely private secondary mortgage market
system;
(3) examine the technological advancements the private
sector has made in providing liquidity in the secondary
mortgage market and how such advancements have affected
liquidity in the secondary mortgage market; and
(4) examine how taxpayers would be impacted by each
alternative system, including the complete privatization of
the Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation.
(c) Report.--The Director of the Federal Housing Finance
Agency shall submit a report to the Congress on the study not
later
[[Page H3266]]
than the expiration of the 24-month period beginning on the
effective date under section 365.
SEC. 365. EFFECTIVE DATE.
Except as specifically provided otherwise in this subtitle,
this subtitle shall take effect on and the amendments made by
this subtitle shall take effect on, and shall apply beginning
on, the expiration of the 6-month period beginning on the
date of the enactment of this Act.
Subtitle B--Federal Home Loan Banks
SEC. 371. DEFINITIONS.
Section 2 of the Federal Home Loan Bank Act (12 U.S.C.
1422) is amended--
(1) by striking paragraphs (1), (10), and (11);
(2) by redesignating paragraphs (2) through (9) as
paragraphs (1) through (8), respectively;
(3) by redesignating paragraphs (12) and (13) as paragraphs
(9) and (10), respectively; and
(4) by adding at the end the following:
``(11) Director.--The term `Director' means the Director of
the Federal Housing Finance Agency.
``(12) Agency.--The term `Agency' means the Federal Housing
Finance Agency.''.
SEC. 372. DIRECTORS.
(a) Election.--Section 7 of the Federal Home Loan Bank Act
(12 U.S.C. 1427) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Number; Election; Qualifications; Conflicts of
Interest.--
``(1) In general.--The management of each Federal Home Loan
Bank shall be vested in a board of 13 directors, or such
other number as the Director determines appropriate, each of
whom shall be a citizen of the United States. All directors
of a Bank who are not independent directors pursuant to
paragraph (3) shall be elected by the members.
``(2) Member directors.--A majority of the directors of
each Bank shall be officers or directors of a member of such
Bank that is located in the district in which such Bank is
located.
``(3) Independent directors.--At least two-fifths of the
directors of each Bank shall be independent directors, who
shall be appointed by the Director of the Federal Housing
Finance Agency from a list of individuals recommended by the
Federal Housing Enterprise Board. The Federal Housing
Enterprise Board may recommend individuals who are identified
by the Board's own independent process or included on a list
of individuals recommended by the board of directors of the
Bank involved, which shall be submitted to the Federal
Housing Enterprise Board by such board of directors. The
number of individuals on any such list submitted by a Bank's
board of directors shall be equal to at least two times the
number of independent directorships to be filled. All
independent directors appointed shall meet the following
criteria:
``(A) In general.--Each independent director shall be a
bona fide resident of the district in which such Bank is
located.
``(B) Public interest directors.--At least 2 of the
independent directors under this paragraph of each Bank shall
be representatives chosen from organizations with more than a
2-year history of representing consumer or community
interests on banking services, credit needs, housing,
community development, economic development, or financial
consumer protections.
``(C) Other directors.--
``(i) Qualifications.--Each independent director that is
not a public interest director under subparagraph (B) shall
have demonstrated knowledge of, or experience in, financial
management, auditing and accounting, risk management
practices, derivatives, project development, or
organizational management, or such other knowledge or
expertise as the Director may provide by regulation.
``(ii) Consultation with banks.--In appointing other
directors to serve on the board of a Federal home loan bank,
the Director of the Federal Housing Finance Agency may
consult with each Federal home loan bank about the knowledge,
skills, and expertise needed to assist the board in better
fulfilling its responsibilities.
``(D) Conflicts of interest.--Notwithstanding subsection
(f)(2), an independent director under this paragraph of a
Bank may not, during such director's term of office, serve as
an officer of any Federal Home Loan Bank or as a director or
officer of any member of a Bank.
``(E) Community demographics.--In appointing independent
directors of a Bank pursuant to this paragraph, the Director
shall take into consideration the demographic makeup of the
community most served by the Affordable Housing Program of
the Bank pursuant to section 10(j).'';
(2) in the first sentence of subsection (b), by striking
``elective directorship'' and inserting ``member directorship
established pursuant to subsection (a)(2)'';
(3) in subsection (c)--
(A) by striking ``elective'' each place such term appears
and inserting ``member'', except--
(i) in the second sentence, the second place such term
appears; and
(ii) each place such term appears in the fifth sentence;
(B) in the first sentence, by inserting after ``less than
one'' the following: ``or two, as determined by the board of
directors of the appropriate Federal home loan bank,''; and
(C) in the second sentence--
(i) by inserting ``(A) except as provided in clause (B) of
this sentence,'' before ``if at any time''; and
(ii) by inserting before the period at the end the
following: ``, and (B) clause (A) of this sentence shall not
apply to the directorships of any Federal home loan bank
resulting from the merger of any two or more such banks'';
and
(4) by striking ``elective'' each place such term appears
(except in subsections (c), (e), and (f)).
(b) Terms.--
(1) In general.--Section 7(d) of the Federal Home Loan Bank
Act (12 U.S.C. 1427(d)) is amended--
(A) in the first sentence, by striking ``3 years'' and
inserting ``4 years''; and
(B) in the second sentence--
(i) by striking ``Federal Home Loan Bank System
Modernization Act of 1999'' and inserting ``Federal Housing
Finance Reform Act of 2008''; and
(ii) by striking ``1/3'' and inserting ``1/4''.
(2) Savings provision.--The amendments made by paragraph
(1) shall not apply to the term of office of any director of
a Federal home loan bank who is serving as of the effective
date of this subtitle under section 381, including any
director elected to fill a vacancy in any such office.
(c) Continued Service of Independent Directors After
Expiration of Term.--Section 7(f)(2) of the Federal Home Loan
Bank Act (12 U.S.C. 1427(f)(2)) is amended--
(1) in the second sentence, by striking ``or the term of
such office expires, whichever occurs first'';
(2) by adding at the end the following new sentence: ``An
independent Bank director may continue to serve as a director
after the expiration of the term of such director until a
successor is appointed.'';
(3) in the paragraph heading, by striking ``Appointed'' and
inserting ``Independent''; and
(4) by striking ``appointive'' each place such term appears
and inserting ``independent''.
(d) Conforming Amendments.--Section 7(f)(3) of the Federal
Home Loan Bank Act (12 U.S.C. 1427(f)(3)) is amended--
(1) in the paragraph heading, by striking ``Elected'' and
inserting ``Member''; and
(2) by striking ``elective'' each place such term appears
in the first and third sentences and inserting ``member''.
(e) Compensation.--Subsection (i) of section 7 of the
Federal Home Loan Bank Act (12 U.S.C. 1427(i)) is amended to
read as follows:
``(i) Directors' Compensation.--
``(1) In general.--Each Federal home loan bank may pay the
directors on the board of directors for the bank reasonable
and appropriate compensation for the time required of such
directors, and reasonable and appropriate expenses incurred
by such directors, in connection with service on the board of
directors, in accordance with resolutions adopted by the
board of directors and subject to the approval of the
Director.
``(2) Annual report by the board.--The Director shall
include, in the annual report submitted to the Congress
pursuant to section 1319B of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992, information
regarding the compensation and expenses paid by the Federal
home loan banks to the directors on the boards of directors
of the banks.''.
(f) Transition Rule.--Any member of the board of directors
of a Federal Home Loan Bank serving as of the effective date
under section 381 may continue to serve as a member of such
board of directors for the remainder of the term of such
office as provided in section 7 of the Federal Home Loan Bank
Act, as in effect before such effective date.
SEC. 373. FEDERAL HOUSING FINANCE AGENCY OVERSIGHT OF FEDERAL
HOME LOAN BANKS.
The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.),
other than in provisions of that Act added or amended
otherwise by this title, is amended--
(1) by striking sections 2A and 2B (12 U.S.C. 1422a,
1422b);
(2) in section 6 (12 U.S.C. 1426(b)(1))--
(A) in subsection (b)(1), in the matter preceding
subparagraph (A), by striking ``Finance Board approval'' and
inserting ``approval by the Director''; and
(B) in each of subsections (c)(4)(B) and (d)(2), by
striking ``Finance Board regulations'' each place that term
appears and inserting ``regulations of the Director'';
(3) in section 8 (12 U.S.C. 1428), in the section heading,
by striking ``by the board'';
(4) in section 10(b) (12 U.S.C. 1430(b)), by striking ``by
formal resolution'';
(5) in section 10 (12 U.S.C. 1430), by adding at the end
the following new subsection:
``(k) Monitoring and Enforcing Compliance With Affordable
Housing and Community Investment Program Requirements.--The
requirements under subsection (i) and (j) that the Banks
establish Community Investment and Affordable Housing
Programs, respectively, and contribute to the Affordable
Housing Program, shall be enforceable by the Director with
respect to the Banks in the same manner and to the same
extent as the housing goals under subpart B of part 2 of
subtitle A of title XIII of the Housing and Community
Development Act of 1992 (12 U.S.C. 4561 et seq.) are
enforceable under section 1336 of such Act with respect to
the Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation.'';
(6) in section 11 (12 U.S.C. 1431)--
[[Page H3267]]
(A) in subsection (b)--
(i) in the first sentence--
(I) by striking ``The Board'' and inserting ``The Office of
Finance, as agent for the Banks,''; and
(II) by striking ``the Board'' and inserting ``such
Office''; and
(ii) in the second and fourth sentences, by striking ``the
Board'' each place such term appears and inserting ``the
Office of Finance'';
(B) in subsection (c)--
(i) by striking ``the Board'' the first place such term
appears and inserting ``the Office of Finance, as agent for
the Banks,''; and
(ii) by striking ``the Board'' the second place such term
appears and inserting ``such Office''; and
(C) in subsection (f)--
(i) by striking the two commas after ``permit'' and
inserting ``or''; and
(ii) by striking the comma after ``require'';
(7) in section 15 (12 U.S.C. 1435), by inserting ``or the
Director'' after ``the Board'';
(8) in section 18 (12 U.S.C. 1438), by striking subsection
(b);
(9) in section 21 (12 U.S.C. 1441)--
(A) in subsection (b)--
(i) in paragraph (5), by striking ``Chairperson of the
Federal Housing Finance Board'' and inserting ``Director'';
and
(ii) in the heading for paragraph (8), by striking
``federal housing finance board'' and inserting ``director'';
and
(B) in subsection (i), in the heading for paragraph (2), by
striking ``Federal housing finance board'' and inserting
``Director'';
(10) in section 23 (12 U.S.C. 1443), by striking ``Board of
Directors of the Federal Housing Finance Board'' and
inserting ``Director'';
(11) by striking ``the Board'' each place such term appears
in such Act (except in section 15 (12 U.S.C. 1435), section
21(f)(2) (12 U.S.C. 1441(f)(2)), subsections (a),
(k)(2)(B)(i), and (n)(6)(C)(ii) of section 21A (12 U.S.C.
1441a), subsections (f)(2)(C), and (k)(7)(B)(ii) of section
21B (12 U.S.C. 1441b), and the first two places such term
appears in section 22 (12 U.S.C. 1442)) and inserting ``the
Director'';
(12) by striking ``The Board'' each place such term appears
in such Act (except in sections 7(e) (12 U.S.C. 1427(e)), and
11(b) (12 U.S.C. 1431(b)) and inserting ``The Director'';
(13) by striking ``the Board's'' each place such term
appears in such Act and inserting ``the Director's'';
(14) by striking ``The Board's'' each place such term
appears in such Act and inserting ``The Director's'';
(15) by striking ``the Finance Board'' each place such term
appears in such Act and inserting ``the Director'';
(16) by striking ``Federal Housing Finance Board'' each
place such term appears and inserting ``Director'';
(17) in section 11(i) (12 U.S.C. 1431(i), by striking ``the
Chairperson of''; and
(18) in section 21(e)(9) (12 U.S.C. 1441(e)(9)), by
striking ``Chairperson of the''.
SEC. 374. JOINT ACTIVITIES OF BANKS.
Section 11 of the Federal Home Loan Bank Act (12 U.S.C.
1431) is amended by adding at the end the following new
subsection:
``(l) Joint Activities.--Subject to the regulation of the
Director, any two or more Federal Home Loan Banks may
establish a joint office for the purpose of performing
functions for, or providing services to, the Banks on a
common or collective basis, or may require that the Office of
Finance perform such functions or services, but only if the
Banks are otherwise authorized to perform such functions or
services individually.''.
SEC. 375. SHARING OF INFORMATION BETWEEN FEDERAL HOME LOAN
BANKS.
(a) In General.--The Federal Home Loan Bank Act is amended
by inserting after section 20 (12 U.S.C. 1440) the following
new section:
``SEC. 20A. SHARING OF INFORMATION BETWEEN FEDERAL HOME LOAN
BANKS.
``(a) Regulatory Authority.--The Director shall prescribe
such regulations as may be necessary to ensure that each
Federal Home Loan Bank has access to information that the
Bank needs to determine the nature and extent of its joint
and several liability.
``(b) No Waiver of Privilege.--The Director shall not be
deemed to have waived any privilege applicable to any
information concerning a Federal Home Loan Bank by
transferring, or permitting the transfer of, that information
to any other Federal Home Loan Bank for the purpose of
enabling the recipient to evaluate the nature and extent of
its joint and several liability.''.
(b) Regulations.--The regulations required under the
amendment made by subsection (a) shall be issued in final
form not later than 6 months after the effective date under
section 381 of this title.
SEC. 376. REORGANIZATION OF BANKS AND VOLUNTARY MERGER.
Section 26 of the Federal Home Loan Bank Act (12 U.S.C.
1446) is amended--
(1) by inserting ``(a) Reorganization.--'' before
``Whenever''; and
(2) by striking ``liquidated or'' each place such phrase
appears;
(3) by striking ``liquidation or''; and
(4) by adding at the end the following new subsection:
``(b) Voluntary Mergers.--Any two or more Banks may, with
the approval of the Director, and the approval of the boards
of directors of the Banks involved, merge. The Director shall
promulgate regulations establishing the conditions and
procedures for the consideration and approval of any such
voluntary merger, including the procedures for Bank member
approval.''.
SEC. 377. SECURITIES AND EXCHANGE COMMISSION DISCLOSURE.
(a) In General.--The Federal Home Loan Banks shall be
exempt from compliance with--
(1) sections 13(e), 14(a), 14(c), and 17A of the Securities
Exchange Act of 1934 and related Commission regulations; and
(2) section 15 of that Act and related Securities and
Exchange Commission regulations with respect to transactions
in capital stock of the Banks.
(b) Member Exemption.--The members of the Federal Home Loan
Banks shall be exempt from compliance with sections 13(d),
13(f), 13(g), 14(d), and 16 of the Securities Exchange Act of
1934 and related Securities and Exchange Commission
regulations with respect to their ownership of, or
transactions in, capital stock of the Federal Home Loan
Banks.
(c) Exempted and Government Securities.--
(1) Capital stock.--The capital stock issued by each of the
Federal Home Loan Banks under section 6 of the Federal Home
Loan Bank Act are--
(A) exempted securities within the meaning of section
3(a)(2) of the Securities Act of 1933; and
(B) ``exempted securities'' within the meaning of section
3(a)(12)(A) of the Securities Exchange Act of 1934.
(2) Other obligations.--The debentures, bonds, and other
obligations issued under section 11 of the Federal Home Loan
Bank Act are--
(A) exempted securities within the meaning of section
3(a)(2) of the Securities Act of 1933;
(B) ``government securities'' within the meaning of section
3(a)(42) of the Securities Exchange Act of 1934;
(C) excluded from the definition of ``government securities
broker'' within section 3(a)(43) of the Securities Exchange
Act of 1934;
(D) excluded from the definition of ``government securities
dealer'' within section 3(a)(44) of the Securities Exchange
Act of 1934; and
(E) ``government securities'' within the meaning of section
2(a)(16) of the Investment Company Act of 1940.
(d) Exemption From Reporting Requirements.--The Federal
Home Loan Banks shall be exempt from periodic reporting
requirements pertaining to--
(1) the disclosure of related party transactions that occur
in the ordinary course of business of the Banks with their
members; and
(2) the disclosure of unregistered sales of equity
securities.
(e) Tender Offers.--The Securities and Exchange
Commission's rules relating to tender offers shall not apply
in connection with transactions in capital stock of the
Federal Home Loan Banks.
(f) Regulations.--In issuing any final regulations to
implement provisions of this section, the Securities and
Exchange Commission shall consider the distinctive
characteristics of the Federal Home Loan Banks when
evaluating the accounting treatment with respect to the
payment to Resolution Funding Corporation, the role of the
combined financial statements of the twelve Banks, the
accounting classification of redeemable capital stock, and
the accounting treatment related to the joint and several
nature of the obligations of the Banks.
SEC. 378. COMMUNITY FINANCIAL INSTITUTION MEMBERS.
(a) Total Asset Requirement.--Paragraph (10) of section 2
of the Federal Home Loan Bank Act (12 U.S.C. 1422(10)), as so
redesignated by section 371(3) of this title, is amended by
striking ``$500,000,000'' each place such term appears and
inserting ``$1,000,000,000''.
(b) Use of Advances for Community Development Activities.--
Section 10(a) of the Federal Home Loan Bank Act (12 U.S.C.
1430(a)) is amended--
(1) in paragraph (2)(B)--
(A) by striking ``and''; and
(B) by inserting ``, and community development activities''
before the period at the end;
(2) in paragraph (3)(E), by inserting ``or community
development activities'' after ``agriculture,''; and
(3) in paragraph (6)--
(A) by striking ``and''; and
(B) by inserting ``, and `community development activities'
'' before ``shall''.
SEC. 379. TECHNICAL AND CONFORMING AMENDMENTS.
(a) Right to Financial Privacy Act of 1978.--Section
1113(o) of the Right to Financial Privacy Act of 1978 (12
U.S.C. 3413(o)) is amended--
(1) by striking ``Federal Housing Finance Board'' and
inserting ``Federal Housing Finance Agency''; and
(2) by striking ``Federal Housing Finance Board's'' and
inserting ``Federal Housing Finance Agency's''.
(b) Riegle Community Development and Regulatory Improvement
Act of 1994.--Section 117(e) of the Riegle Community
Development and Regulatory Improvement Act of 1994 (12 U.S.C.
4716(e)) is amended by striking ``Federal Housing Finance
Board'' and inserting ``Federal Housing Finance Agency''.
(c) Title 18, United States Code.--Title 18, United States
Code, is amended by striking ``Federal Housing Finance
Board'' each
[[Page H3268]]
place such term appears in each of sections 212, 657, 1006,
1014, and inserting ``Federal Housing Finance Agency''.
(d) MAHRA Act of 1997.--Section 517(b)(4) of the
Multifamily Assisted Housing Reform and Affordability Act of
1997 (42 U.S.C. 1437f note) is amended by striking ``Federal
Housing Finance Board'' and inserting ``Federal Housing
Finance Agency''.
(e) Title 44, United States Code.--Section 3502(5) of title
44, United States Code, is amended by striking ``Federal
Housing Finance Board'' and inserting ``Federal Housing
Finance Agency''.
(f) Access to Local TV Act of 2000.--Section
1004(d)(2)(D)(iii) of the Launching Our Communities' Access
to Local Television Act of 2000 (47 U.S.C.
1103(d)(2)(D)(iii)) is amended by striking ``Office of
Federal Housing Enterprise Oversight, the Federal Housing
Finance Board'' and inserting ``Federal Housing Finance
Agency''.
(g) Sarbanes-Oxley Act of 2002.--Section
105(b)(5)(B)(ii)(II) of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7215(B)(5)(b)(ii)(II)) is amended by inserting ``and
the Director of the Federal Housing Finance Agency'' after
``Commission,''.
SEC. 380. STUDY OF AFFORDABLE HOUSING PROGRAM USE FOR LONG-
TERM CARE FACILITIES.
The Comptroller General shall conduct a study of the use of
affordable housing programs of the Federal home loan banks
under section 10(j) of the Federal Home Loan Bank Act to
determine how and the extent to which such programs are used
to assist long-term care facilities for low- and moderate-
income individuals, and the effectiveness and adequacy of
such assistance in meeting the needs of affected communities.
The study shall examine the applicability of such use to the
affordable housing fund required to be established by the
Director of the Federal Housing Finance Agency pursuant to
the amendment made by section 340 of this title. The
Comptroller General shall submit a report to the Director of
the Federal Housing Finance Agency and the Congress regarding
the results of the study not later than the expiration of the
1-year period beginning on the date of the enactment of this
Act. This section shall take effect on the date of the
enactment of this Act.
SEC. 381. EFFECTIVE DATE.
Except as specifically provided otherwise in this subtitle,
this subtitle shall take effect on and the amendments made by
this subtitle shall take effect on, and shall apply beginning
on, the expiration of the 6-month period beginning on the
date of the enactment of this Act.
Subtitle C--Transfer of Functions, Personnel, and Property of Office of
Federal Housing Enterprise Oversight, Federal Housing Finance Board,
and Department of Housing and Urban Development
CHAPTER 1--OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT
SEC. 385. ABOLISHMENT OF OFHEO.
(a) In General.--Effective at the end of the 6-month period
beginning on the date of the enactment of this Act, the
Office of Federal Housing Enterprise Oversight of the
Department of Housing and Urban Development and the positions
of the Director and Deputy Director of such Office are
abolished.
(b) Disposition of Affairs.--During the 6-month period
beginning on the date of the enactment of this Act, the
Director of the Office of Federal Housing Enterprise
Oversight shall, for the purpose of winding up the affairs of
the Office of Federal Housing Enterprise Oversight and in
addition to carrying out its other responsibilities under
law--
(1) manage the employees of such Office and provide for the
payment of the compensation and benefits of any such employee
which accrue before the effective date of the transfer of
such employee pursuant to section 387; and
(2) may take any other action necessary for the purpose of
winding up the affairs of the Office.
(c) Status of Employees Before Transfer.--The amendments
made by subtitle A and the abolishment of the Office of
Federal Housing Enterprise Oversight under subsection (a) of
this section may not be construed to affect the status of any
employee of such Office as employees of an agency of the
United States for purposes of any other provision of law
before the effective date of the transfer of any such
employee pursuant to section 387.
(d) Use of Property and Services.--
(1) Property.--The Director of the Federal Housing Finance
Agency may use the property of the Office of Federal Housing
Enterprise Oversight to perform functions which have been
transferred to the Director of the Federal Housing Finance
Agency for such time as is reasonable to facilitate the
orderly transfer of functions transferred pursuant to any
other provision of this title or any amendment made by this
title to any other provision of law.
(2) Agency services.--Any agency, department, or other
instrumentality of the United States, and any successor to
any such agency, department, or instrumentality, which was
providing supporting services to the Office of Federal
Housing Enterprise Oversight before the expiration of the
period under subsection (a) in connection with functions that
are transferred to the Director of the Federal Housing
Finance Agency shall--
(A) continue to provide such services, on a reimbursable
basis, until the transfer of such functions is complete; and
(B) consult with any such agency to coordinate and
facilitate a prompt and reasonable transition.
(e) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity of
any right, duty, or obligation of the United States, the
Director of the Office of Federal Housing Enterprise
Oversight, or any other person, which--
(A) arises under or pursuant to the title XIII of the
Housing and Community Development Act of 1992, the Federal
National Mortgage Association Charter Act, the Federal Home
Loan Mortgage Corporation Act, or any other provision of law
applicable with respect to such Office; and
(B) existed on the day before the abolishment under
subsection (a) of this section.
(2) Continuation of suits.--No action or other proceeding
commenced by or against the Director of the Office of Federal
Housing Enterprise Oversight in connection with functions
that are transferred to the Director of the Federal Housing
Finance Agency shall abate by reason of the enactment of this
title, except that the Director of the Federal Housing
Finance Agency shall be substituted for the Director of the
Office of Federal Housing Enterprise Oversight as a party to
any such action or proceeding.
SEC. 386. CONTINUATION AND COORDINATION OF CERTAIN
REGULATIONS.
All regulations, orders, determinations, and resolutions
that--
(1) were issued, made, prescribed, or allowed to become
effective by--
(A) the Office of Federal Housing Enterprise Oversight; or
(B) a court of competent jurisdiction and that relate to
functions transferred by this chapter; and
(2) are in effect on the date of the abolishment under
section 385(a) of this title, shall remain in effect
according to the terms of such regulations, orders,
determinations, and resolutions, and shall be enforceable by
or against the Director of the Federal Housing Finance Agency
until modified, terminated, set aside, or superseded in
accordance with applicable law by such Director, as the case
may be, any court of competent jurisdiction, or operation of
law.
SEC. 387. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.
(a) Transfer.--Each employee of the Office of Federal
Housing Enterprise Oversight shall be transferred to the
Federal Housing Finance Agency for employment no later than
the date of the abolishment under section 385(a) of this
title and such transfer shall be deemed a transfer of
function for purposes of section 3503 of title 5, United
States Code.
(b) Guaranteed Positions.--Each employee transferred under
subsection (a) shall be guaranteed a position with the same
status, tenure, grade, and pay as that held on the day
immediately preceding the transfer. Each such employee
holding a permanent position shall not be involuntarily
separated or reduced in grade or compensation for 12 months
after the date of transfer, except for cause or, if the
employee is a temporary employee, separated in accordance
with the terms of the appointment.
(c) Appointment Authority for Excepted Service Employees.--
(1) In general.--In the case of employees occupying
positions in the excepted service, any appointment authority
established pursuant to law or regulations of the Office of
Personnel Management for filling such positions shall be
transferred, subject to paragraph (2).
(2) Decline of transfer.--The Director of the Federal
Housing Finance Agency may decline a transfer of authority
under paragraph (1) (and the employees appointed pursuant
thereto) to the extent that such authority relates to
positions excepted from the competitive service because of
their confidential, policy-making, policy-determining, or
policy-advocating character.
(d) Reorganization.--If the Director of the Federal Housing
Finance Agency determines, after the end of the 1-year period
beginning on the date of the abolishment under section
385(a), that a reorganization of the combined work force is
required, that reorganization shall be deemed a major
reorganization for purposes of affording affected employees
retirement under section 8336(d)(2) or 8414(b)(1)(B) of title
5, United States Code.
(e) Employee Benefit Programs.--Any employee of the Office
of Federal Housing Enterprise Oversight accepting employment
with the Director of the Federal Housing Finance Agency as a
result of a transfer under subsection (a) may retain for 12
months after the date such transfer occurs membership in any
employee benefit program of the Federal Housing Finance
Agency or the Office of Federal Housing Enterprise Oversight,
as applicable, including insurance, to which such employee
belongs on the date of the abolishment under section 385(a)
if--
(1) the employee does not elect to give up the benefit or
membership in the program; and
(2) the benefit or program is continued by the Director of
the Federal Housing Finance Agency,
The difference in the costs between the benefits which would
have been provided by such agency and those provided by this
section shall be paid by the Director of the Federal Housing
Finance Agency. If any employee elects to give up membership
in a health insurance program or the health insurance program
is not continued by such Director, the employee shall be
permitted to select an
[[Page H3269]]
alternate Federal health insurance program within 30 days of
such election or notice, without regard to any other
regularly scheduled open season.
SEC. 388. TRANSFER OF PROPERTY AND FACILITIES.
Upon the abolishment under section 385(a), all property of
the Office of Federal Housing Enterprise Oversight shall
transfer to the Director of the Federal Housing Finance
Agency.
CHAPTER 2--FEDERAL HOUSING FINANCE BOARD
SEC. 391. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.
(a) In General.--Effective at the end of the 6-month period
beginning on the date of enactment of this Act, the Federal
Housing Finance Board (in this subtitle referred to as the
``Board'') is abolished.
(b) Disposition of Affairs.--During the 6-month period
beginning on the date of enactment of this Act, the Board,
for the purpose of winding up the affairs of the Board and in
addition to carrying out its other responsibilities under
law--
(1) shall manage the employees of such Board and provide
for the payment of the compensation and benefits of any such
employee which accrue before the effective date of the
transfer of such employee under section 393; and
(2) may take any other action necessary for the purpose of
winding up the affairs of the Board.
(c) Status of Employees Before Transfer.--The amendments
made by subtitles A and B and the abolishment of the Board
under subsection (a) may not be construed to affect the
status of any employee of such Board as employees of an
agency of the United States for purposes of any other
provision of law before the effective date of the transfer of
any such employee under section 393.
(d) Use of Property and Services.--
(1) Property.--The Director of the Federal Housing Finance
Agency may use the property of the Board to perform functions
which have been transferred to the Director of the Federal
Housing Finance Agency for such time as is reasonable to
facilitate the orderly transfer of functions transferred
under any other provision of this title or any amendment made
by this title to any other provision of law.
(2) Agency services.--Any agency, department, or other
instrumentality of the United States, and any successor to
any such agency, department, or instrumentality, which was
providing supporting services to the Board before the
expiration of the period under subsection (a) in connection
with functions that are transferred to the Director of the
Federal Housing Finance Agency shall--
(A) continue to provide such services, on a reimbursable
basis, until the transfer of such functions is complete; and
(B) consult with any such agency to coordinate and
facilitate a prompt and reasonable transition.
(e) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity of
any right, duty, or obligation of the United States, a member
of the Board, or any other person, which--
(A) arises under the Federal Home Loan Bank Act or any
other provision of law applicable with respect to such Board;
and
(B) existed on the day before the effective date of the
abolishment under subsection (a).
(2) Continuation of suits.--No action or other proceeding
commenced by or against the Board in connection with
functions that are transferred to the Director of the Federal
Housing Finance Agency shall abate by reason of the enactment
of this title, except that the Director of the Federal
Housing Finance Agency shall be substituted for the Board or
any member thereof as a party to any such action or
proceeding.
SEC. 392. CONTINUATION AND COORDINATION OF CERTAIN
REGULATIONS.
(a) In General.--All regulations, orders, determinations,
and resolutions described under subsection (b) shall remain
in effect according to the terms of such regulations, orders,
determinations, and resolutions, and shall be enforceable by
or against the Director of the Federal Housing Finance Agency
until modified, terminated, set aside, or superseded in
accordance with applicable law by such Director, any court of
competent jurisdiction, or operation of law.
(b) Applicability.--A regulation, order, determination, or
resolution is described under this subsection if it--
(1) was issued, made, prescribed, or allowed to become
effective by--
(A) the Board; or
(B) a court of competent jurisdiction and relates to
functions transferred by this chapter; and
(2) is in effect on the effective date of the abolishment
under section 391(a).
SEC. 393. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL
HOUSING FINANCE BOARD.
(a) Transfer.--Each employee of the Board shall be
transferred to the Federal Housing Finance Agency for
employment not later than the effective date of the
abolishment under section 391(a), and such transfer shall be
deemed a transfer of function for purposes of section 3503 of
title 5, United States Code.
(b) Guaranteed Positions.--Each employee transferred under
subsection (a) shall be guaranteed a position with the same
status, tenure, grade, and pay as that held on the day
immediately preceding the transfer. Each such employee
holding a permanent position shall not be involuntarily
separated or reduced in grade or compensation for 12 months
after the date of transfer, except for cause or, if the
employee is a temporary employee, separated in accordance
with the terms of the appointment.
(c) Appointment Authority for Excepted and Senior Executive
Service Employees.--
(1) In general.--In the case of employees occupying
positions in the excepted service or the Senior Executive
Service, any appointment authority established under law or
by regulations of the Office of Personnel Management for
filling such positions shall be transferred, subject to
paragraph (2).
(2) Decline of transfer.--The Director of the Federal
Housing Finance Agency may decline a transfer of authority
under paragraph (1) to the extent that such authority relates
to positions excepted from the competitive service because of
their confidential, policymaking, policy-determining, or
policy-advocating character, and noncareer positions in the
Senior Executive Service (within the meaning of section
3132(a)(7) of title 5, United States Code).
(d) Reorganization.--If the Director of the Federal Housing
Finance Agency determines, after the end of the 1-year period
beginning on the effective date of the abolishment under
section 391(a), that a reorganization of the combined
workforce is required, that reorganization shall be deemed a
major reorganization for purposes of affording affected
employees retirement under section 8336(d)(2) or
8414(b)(1)(B) of title 5, United States Code.
(e) Employee Benefit Programs.--
(1) In general.--Any employee of the Board accepting
employment with the Federal Housing Finance Agency as a
result of a transfer under subsection (a) may retain for 12
months after the date on which such transfer occurs
membership in any employee benefit program of the Federal
Housing Finance Agency or the Board, as applicable, including
insurance, to which such employee belongs on the effective
date of the abolishment under section 391(a) if--
(A) the employee does not elect to give up the benefit or
membership in the program; and
(B) the benefit or program is continued by the Director of
the Federal Housing Finance Agency.
(2) Cost differential.--The difference in the costs between
the benefits which would have been provided by the Board and
those provided by this section shall be paid by the Director
of the Federal Housing Finance Agency. If any employee elects
to give up membership in a health insurance program or the
health insurance program is not continued by such Director,
the employee shall be permitted to select an alternate
Federal health insurance program within 30 days after such
election or notice, without regard to any other regularly
scheduled open season.
SEC. 394. TRANSFER OF PROPERTY AND FACILITIES.
Upon the effective date of the abolishment under section
391(a), all property of the Board shall transfer to the
Director of the Federal Housing Finance Agency.
CHAPTER 3--DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
SEC. 395. TERMINATION OF ENTERPRISE-RELATED FUNCTIONS.
(a) Termination Date.--For purposes of this chapter, the
term ``termination date'' means the date that occurs 6 months
after the date of the enactment of this Act.
(b) Determination of Transferred Functions and Employees.--
(1) In general.--Not later than the expiration of the 3-
month period beginning on the date of the enactment of this
Act, the Secretary, in consultation with the Director of the
Office of Federal Housing Enterprise Oversight, shall
determine--
(A) the functions, duties, and activities of the Secretary
of Housing and Urban Development regarding oversight or
regulation of the enterprises under or pursuant to the
authorizing statutes, title XIII of the Housing and Community
Development Act of 1992, and any other provisions of law, as
in effect before the date of the enactment of this Act, but
not including any such functions, duties, and activities of
the Director of the Office of Federal Housing Enterprise
Oversight of the Department of Housing and Urban Development
and such Office; and
(B) the employees of the Department of Housing and Urban
Development necessary to perform such functions, duties, and
activities.
(2) Enterprise-related functions.--For purposes of this
chapter, the term ``enterprise-related functions of the
Department'' means the functions, duties, and activities of
the Department of Housing and Urban Development determined
under paragraph (1)(A).
(3) Enterprise-related employees.--For purposes of this
chapter, the term ``enterprise-related employees of the
Department'' means the employees of the Department of Housing
and Urban Development determined under paragraph (1)(B).
(c) Disposition of Affairs.--During the 6-month period
beginning on the date of enactment of this Act, the Secretary
of Housing and Urban Development (in this subtitle referred
to as the ``Secretary''), for the purpose of winding up the
affairs of the Secretary regarding the enterprise-related
functions of the Department of Housing and Urban Development
(in this subtitle referred to as the
[[Page H3270]]
``Department'') and in addition to carrying out the
Secretary's other responsibilities under law regarding such
functions--
(1) shall manage the enterprise-related employees of the
Department and provide for the payment of the compensation
and benefits of any such employee which accrue before the
effective date of the transfer of any such employee under
section 397; and
(2) may take any other action necessary for the purpose of
winding up the enterprise-related functions of the
Department.
(d) Status of Employees Before Transfer.--The amendments
made by subtitles A and B and the termination of the
enterprise-related functions of the Department under
subsection (b) may not be construed to affect the status of
any employee of the Department as employees of an agency of
the United States for purposes of any other provision of law
before the effective date of the transfer of any such
employee under section 397.
(e) Use of Property and Services.--
(1) Property.--The Director of the Federal Housing Finance
Agency may use the property of the Secretary to perform
functions which have been transferred to the Director of the
Federal Housing Finance Agency for such time as is reasonable
to facilitate the orderly transfer of functions transferred
under any other provision of this title or any amendment made
by this title to any other provision of law.
(2) Agency services.--Any agency, department, or other
instrumentality of the United States, and any successor to
any such agency, department, or instrumentality, which was
providing supporting services to the Secretary regarding
enterprise-related functions of the Department before the
termination date under subsection (a) in connection with such
functions that are transferred to the Director of the Federal
Housing Finance Agency shall--
(A) continue to provide such services, on a reimbursable
basis, until the transfer of such functions is complete; and
(B) consult with any such agency to coordinate and
facilitate a prompt and reasonable transition.
(f) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity of
any right, duty, or obligation of the United States, the
Secretary, or any other person, which--
(A) arises under the authorizing statutes, title XIII of
the Housing and Community Development Act of 1992, or any
other provision of law applicable with respect to the
Secretary, in connection with the enterprise-related
functions of the Department; and
(B) existed on the day before the termination date under
subsection (a).
(2) Continuation of suits.--No action or other proceeding
commenced by or against the Secretary in connection with the
enterprise-related functions of the Department shall abate by
reason of the enactment of this title, except that the
Director of the Federal Housing Finance Agency shall be
substituted for the Secretary or any member thereof as a
party to any such action or proceeding.
SEC. 396. CONTINUATION AND COORDINATION OF CERTAIN
REGULATIONS.
(a) In General.--All regulations, orders, and
determinations described in subsection (b) shall remain in
effect according to the terms of such regulations, orders,
determinations, and resolutions, and shall be enforceable by
or against the Director of the Federal Housing Finance Agency
until modified, terminated, set aside, or superseded in
accordance with applicable law by such Director, any court of
competent jurisdiction, or operation of law.
(b) Applicability.--A regulation, order, or determination
is described under this subsection if it--
(1) was issued, made, prescribed, or allowed to become
effective by--
(A) the Secretary; or
(B) a court of competent jurisdiction and that relate to
the enterprise-related functions of the Department; and
(2) is in effect on the termination date under section
395(a).
SEC. 397. TRANSFER AND RIGHTS OF EMPLOYEES OF DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT.
(a) Transfer.--
(1) In general.--Except as provided in paragraph (2), each
enterprise-related employee of the Department shall be
transferred to the Federal Housing Finance Agency for
employment not later than the termination date under section
395(a) and such transfer shall be deemed a transfer of
function for purposes of section 3503 of title 5, United
States Code.
(2) Authority to decline.--An enterprise-related employee
of the Department may, in the discretion of the employee,
decline transfer under paragraph (1) to a position in the
Federal Housing Finance Agency and shall be guaranteed a
position in the Department with the same status, tenure,
grade, and pay as that held on the day immediately preceding
the date that such declination was made. Each such employee
holding a permanent position shall not be involuntarily
separated or reduced in grade or compensation for 12 months
after the date that the transfer would otherwise have
occurred, except for cause or, if the employee is a temporary
employee, separated in accordance with the terms of the
appointment.
(b) Guaranteed Positions.--Each enterprise-related employee
of the Department transferred under subsection (a) shall be
guaranteed a position with the same status, tenure, grade,
and pay as that held on the day immediately preceding the
transfer. Each such employee holding a permanent position
shall not be involuntarily separated or reduced in grade or
compensation for 12 months after the date of transfer, except
for cause or, if the employee is a temporary employee,
separated in accordance with the terms of the appointment.
(c) Appointment Authority for Excepted and Senior Executive
Service Employees.--
(1) In general.--In the case of employees occupying
positions in the excepted service or the Senior Executive
Service, any appointment authority established under law or
by regulations of the Office of Personnel Management for
filling such positions shall be transferred, subject to
paragraph (2).
(2) Decline of transfer.--The Director of the Federal
Housing Finance Agency may decline a transfer of authority
under paragraph (1) (and the employees appointed pursuant
thereto) to the extent that such authority relates to
positions excepted from the competitive service because of
their confidential, policymaking, policy-determining, or
policy-advocating character, and noncareer positions in the
Senior Executive Service (within the meaning of section
3132(a)(7) of title 5, United States Code).
(d) Reorganization.--If the Director of the Federal Housing
Finance Agency determines, after the end of the 1-year period
beginning on the termination date under section 395(a), that
a reorganization of the combined workforce is required, that
reorganization shall be deemed a major reorganization for
purposes of affording affected employees retirement under
section 8336(d)(2) or 8414(b)(1)(B) of title 5, United States
Code.
(e) Employee Benefit Programs.--
(1) In general.--Any enterprise-related employee of the
Department accepting employment with the Federal Housing
Finance Agency as a result of a transfer under subsection (a)
may retain for 12 months after the date on which such
transfer occurs membership in any employee benefit program of
the Federal Housing Finance Agency or the Department, as
applicable, including insurance, to which such employee
belongs on the termination date under section 395(a) if--
(A) the employee does not elect to give up the benefit or
membership in the program; and
(B) the benefit or program is continued by the Director of
the Federal Housing Finance Agency.
(2) Cost differential.--The difference in the costs between
the benefits which would have been provided by the Department
and those provided by this section shall be paid by the
Director of the Federal Housing Finance Agency. If any
employee elects to give up membership in a health insurance
program or the health insurance program is not continued by
such Director, the employee shall be permitted to select an
alternate Federal health insurance program within 30 days
after such election or notice, without regard to any other
regularly scheduled open season.
SEC. 398. TRANSFER OF APPROPRIATIONS, PROPERTY, AND
FACILITIES.
Upon the termination date under section 395(a), all assets,
liabilities, contracts, property, records, and unexpended
balances of appropriations, authorizations, allocations, and
other funds employed, held, used, arising from, available to,
or to be made available to the Department in connection with
enterprise-related functions of the Department shall transfer
to the Director of the Federal Housing Finance Agency.
Unexpended funds transferred by this section shall be used
only for the purposes for which the funds were originally
authorized and appropriated.
TITLE IV--EMERGENCY MORTGAGE LOAN MODIFICATION
SEC. 401. SHORT TITLE.
This title may be cited as the ``Emergency Mortgage Loan
Modification Act of 2008''.
SEC. 402. SAFE HARBOR FOR QUALIFIED LOAN MODIFICATIONS OR
WORKOUT PLANS FOR CERTAIN RESIDENTIAL MORTGAGE
LOANS.
(a) Standard for Loan Modifications or Workout Plans.--
Absent contractual provisions to the contrary--
(1) the duty to maximize, or to not adversely affect, the
recovery of total proceeds from pooled residential mortgage
loans is owed by a servicer of such pooled loans to the
securitization vehicle for the benefit of all investors and
holders of beneficial interests in the pooled loans, in the
aggregate, and not to any individual party or group of
parties; and
(2) a servicer of pooled residential mortgage loans shall
be deemed to be acting on behalf of the securitization
vehicle in the best interest of all investors and holders of
beneficial interests in the pooled loans, in the aggregate,
if for a loan that is in payment default under the loan
agreement or for which payment default is imminent or
reasonably foreseeable, the loan servicer makes or causes to
be made reasonable and documented efforts to implement a
modification or workout plan or, if such efforts are
unsuccessful or such plan would be infeasible, engages or
causes to engage in other loss mitigation, including
accepting a short payment or partial discharge of principal,
or agreeing to a short sale of the property, to the extent
that the servicer reasonably believes the modification or
workout plan or other mitigation actions will maximize the
net present value to be realized on the loan over that which
would be realized through foreclosure.
[[Page H3271]]
(b) Safe Harbor.--Absent contractual provisions to the
contrary, a servicer of a residential mortgage loan that acts
or causes to act in a manner consistent with the duty set
forth in subsection (a), shall not be liable for entering
into a qualified loan modification or workout plan, to--
(1) any person, based on that person's ownership of a
residential mortgage loan or any interest in a pool of
residential mortgage loans or in securities that distribute
payments out of the principal, interest and other payments in
loans on the pool;
(2) any person who is obligated to make payments pursuant
to a derivatives instrument determined in reference to any
interest referred to in paragraph (1); or
(3) any person that insures any loan or any interest
referred to in paragraph (1) under any law or regulation of
the United States or any law or regulation of any State or
political subdivision of any State.
(c) Rule of Construction.--No provision of this section
shall be construed as limiting the ability of a servicer to
enter into loan modifications or workout plans other than
qualified loan modification or workout plans.
(d) Definitions.--For purposes of this section, the
following definitions shall apply:
(1) Qualified loan modification or workout plan.--The term
``qualified loan modification or workout plan'' means a
modification or plan that--
(A) is scheduled to remain in place until the borrower
sells or refinances the property, or for at least 5 years
from the date of adoption of the plan, whichever is sooner;
(B) does not provide for a repayment schedule that results
in an increase in the outstanding principal balance of the
loan, including by deferred or unpaid interest, fees, or
other charges; and
(C) does not require the borrower to pay additional points
and fees.
(2) Residential mortgage loan defined.--The term
``residential mortgage loan'' means a loan that is secured by
a lien on an owner-occupied residential dwelling.
(3) Securitization vehicle.--The term ``securitization
vehicle'' means a trust, corporation, partnership, limited
liability entity, special purpose entity, or other structure
that--
(A) is the issuer, or is created by the issuer, of mortgage
pass-through certificates, participation certificates,
mortgage-backed securities, or other similar securities
backed by a pool of assets that includes residential mortgage
loans; and
(B) holds such loans.
(e) Effective Period.--This section shall apply only with
respect to qualified loan modification or workout plans
initiated prior to January 1, 2011.
TITLE V--OTHER HOUSING PROVISIONS
SEC. 501. DEPOSITORY INSTITUTION COMMUNITY DEVELOPMENT
INVESTMENTS ENHANCEMENT .
(a) Technical Corrections.--
(1) National banks.--The first sentence of the paragraph
designated as the ``Eleventh'' of section 5136 of the Revised
Statutes of the United States (12 U.S.C. 24) (as amended by
section 305(a) of the Financial Services Regulatory Relief
Act of 2006) is amended by striking ``promotes the public
welfare by benefitting primarily'' and inserting ``is
designed primarily to promote the public welfare, including
the welfare of''.
(2) State member banks.--The first sentence of the 23rd
undesignated paragraph of section 9 of the Federal Reserve
Act (12 U.S.C. 338a) (as amended by section 305(b) of the
Financial Services Regulatory Relief Act of 2006) is amended
by striking ``promotes the public welfare by benefitting
primarily'' and inserting ``is designed primarily to promote
the public welfare, including the welfare of''.
(b) Investments by Federal Savings Associations Authorized
to Promote the Public Welfare.--
(1) In general.--Section 5(c)(3) of the Home Owners' Loan
Act (12 U.S.C. 1464(c)) is amended by adding at the end the
following new subparagraph:
``(D) Direct investments to promote the public welfare.--
``(i) In general.--A Federal savings association may make
investments, directly or indirectly, each of which is
designed primarily to promote the public welfare, including
the welfare of low- and moderate-income communities or
families through the provision of housing, services, and
jobs.
``(ii) Direct investments or acquisition of interest in
other companies.--Investments under clause (i) may be made
directly or by purchasing interests in an entity primarily
engaged in making such investments.
``(iii) Prohibition on unlimited liability.--No investment
may be made under this subparagraph which would subject a
Federal savings association to unlimited liability to any
person.
``(iv) Single investment limitation to be established by
director.--Subject to clauses (v) and (vi), the Director
shall establish, by order or regulation, limits on--
``(I) the amount any savings association may invest in any
1 project; and
``(II) the aggregate amount of investment of any savings
association under this subparagraph.
``(v) Flexible aggregate investment limitation.--The
aggregate amount of investments of any savings association
under this subparagraph may not exceed an amount equal to the
sum of 5 percent of the savings association's capital stock
actually paid in and unimpaired and 5 percent of the savings
association's unimpaired surplus, unless--
``(I) the Director determines that the savings association
is adequately capitalized; and
``(II) the Director determines, by order, that the
aggregate amount of investments in a higher amount than the
limit under this clause will pose no significant risk to the
affected deposit insurance fund.
``(vi) Maximum aggregate investment limitation.--
Notwithstanding clause (v), the aggregate amount of
investments of any savings association under this
subparagraph may not exceed an amount equal to the sum of 15
percent of the savings association's capital stock actually
paid in and unimpaired and 15 percent of the savings
association's unimpaired surplus.
``(vii) Investments not subject to other limitation on
quality of investments.--No obligation a Federal savings
association acquires or retains under this subparagraph shall
be taken into account for purposes of the limitation
contained in section 28(d) of the Federal Deposit Insurance
Act on the acquisition and retention of any corporate debt
security not of investment grade.
``(viii) Applicability of standards to each investment.--
The standards and limitations of this subparagraph shall
apply to each investment under this subparagraph made by a
savings association directly and by its subsidiaries.''.
(2) Technical and conforming amendments.--Section
5(c)(3)(A) of the Home Owners' Loan Act (12 U.S.C.
1464(c)(3)(A)) is amended to read as follows:
``(A) [Repealed]''.
SEC. 502. PRESERVATION OF CERTAIN AFFORDABLE HOUSING DWELLING
UNITS.
(a) Conversion of HUD Contracts.--Notwithstanding any other
provision of law, the Secretary of Housing and Urban
Development may, at the request of the owner of the
multifamily housing project to which Section 8 Project Number
NY 913 VO 0018 and RAP Contract Number 012035NIRAP are
subject, convert such contracts to a contract for project-
based rental assistance under section 8 of the United States
Housing Act of 1937 (42 U.S.C. 1437f).
(b) Initial Renewal.--
(1) Eligibility.--At the request of the owner made no later
than 90 days prior to a conversion, the Secretary may, to the
extent sufficient amounts are made available in appropriation
Acts and notwithstanding any other law, treat the
contemplated resulting contract as if such contract were
eligible for initial renewal under section 524(a) of the
Multifamily Assisted Housing Reform and Affordability Act of
1997 (42 U.S.C. 1437f note).
(2) Request.--A request by the owner pursuant to paragraph
(1) shall be upon such terms and conditions as the Secretary
may require.
(c) Resulting Contract.--The resulting contract shall--
(1) be subject to section 524(a) of MAHRA (42 U.S.C. 1437f
note);
(2) be considered for all purposes a contract that has been
renewed under section 524(a) of MAHRA (42 U.S.C. 1437f note)
for a term not to exceed 20 years;
(3) be subsequently renewable at the request of the owner,
under any renewal option for which the project is eligible
under MAHRA (42 U.S.C. 1437f note);
(4) contain provisions limiting distributions, as the
Secretary determines appropriate, not to exceed 10 percent of
the initial investment of the owner;
(5) be subject to the availability of sufficient amounts in
appropriation Acts; and
(6) be subject to such other terms and conditions as the
Secretary considers appropriate.
(d) Income Targeting.--The owner shall be deemed to be in
compliance with all income-targeting requirements under the
United States Housing Act of 1937 by serving low-income
families, as such term is defined in the section 3(b)(2) of
such Act (42 U.S.C. 1437a(b)(2)).
(e) Tenant Eligibility.--Notwithstanding any other
provision of law, each family residing in an assisted
dwelling unit on the date of the conversion under this
section, subject to the resulting contract under subsection
(a), shall be considered to meet the applicable requirements
for income eligibility and occupancy.
(f) Definitions.--As used in this section--
(1) the term ``assisted dwelling unit'' means the dwelling
units that, on the date of the conversion under this section,
were subject to Section 8 Project Number NY 913 VO 0018 or
RAP Contract Number 012035NIRAP;
(2) the term ``conversion'' means the action under which
Section 8 Project Number NY 913 VO 0018 and RAP Contract
Number 012035NIRAP become a contract for project-based rental
assistance under section 8 of the United States Housing Act
of 1937 (42 U.S.C. 1437f) pursuant to subsection (a);
(3) the term ``MAHRA'' means the Multifamily Assisted
Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f
note);
(4) the term ``owner'' means Starrett City Associates or
any successor owner of the multifamily housing project to
which Section 8 Project Number NY 913 VO 0018 and RAP
Contract Number 012035NIRAP are subject;
(5) the term ``resulting contract'' means the new contract
after a conversion of Section 8 Project Number NY 913 VO 0018
and RAP Contract Number 012035NIRAP to a contract for
project-based rental assistance under section 8 of the United
States Housing
[[Page H3272]]
Act of 1937 (42 U.S.C. 1437f) pursuant to subsection (a); and
(6) the term ``Secretary'' means the Secretary of Housing
and Urban Development.
SEC. 503. ELIGIBILITY OF CERTAIN PROJECTS FOR ENHANCED
VOUCHER ASSISTANCE.
Notwithstanding any other provision of law--
(1) the property known as The Heritage Apartments (FHA No.
023-44804), in Malden, Massachusetts, shall be considered
eligible low-income housing for purposes of the eligibility
of residents of the property for enhanced voucher assistance
under section 8(t) of the United States Housing Act of 1937
(42 U.S.C. 1437f(t)), pursuant to paragraph (2)(A) of section
223(f) of the Low-Income Housing Preservation and Resident
Homeownership Act of 1990 (12 U.S.C. 4113(f)(2)(A));
(2) such residents shall receive enhanced rental housing
vouchers upon the prepayment of the mortgage loan for the
property under section 236 of the National Housing Act (12
U.S.C. 1715z-1); and
(3) the Secretary shall approve such prepayment and
subsequent transfer of the property without any further
condition, except that the property shall be restricted for
occupancy, until the original maturity date of the prepaid
mortgage loan, only by families with incomes not exceeding 80
percent of the adjusted median income for the area in which
the property is located, as published by the Secretary.
Amounts for the enhanced vouchers pursuant to this section
shall be provided under amounts appropriated for tenant-based
rental assistance otherwise authorized under section 8(t) of
the United States Housing Act of 1937.
SEC. 504. TRANSFER OF CERTAIN RENTAL ASSISTANCE CONTRACTS.
(a) Transfer.--Subject to subsection (c) and
notwithstanding any other provision of law, the Secretary of
Housing and Urban Development shall, at the request of the
owner, transfer or authorize the transfer, of the contracts,
restrictions, and debt described in subsection (b)--
(1) on the housing that is owned or managed by Community
Properties of Ohio Management Services LLC or an affiliate of
Ohio Capital Corporation for Housing and located in Franklin
County, Ohio, to other properties located in Franklin County,
Ohio; and
(2) on the housing that is owned or managed by The Model
Group, Inc., and located in Hamilton County, Ohio, to other
properties located in Hamilton County, Ohio.
(b) Contracts, Restrictions, and Debt Covered.--The
contracts, restrictions, and debt described in this
subsection are as follows:
(1) All or a portion of a project-based rental assistance
housing assistance payments contract under section 8 of the
United States Housing Act of 1937 (42 U.S.C. 1437f).
(2) Existing Federal use restrictions, including without
limitation use agreements, regulatory agreements, and
accommodation agreements.
(3) Any subordinate debt held by the Secretary or assigned
and any mortgages securing such debt, all related loan and
security documentation and obligations, and reserve and
escrow balances.
(c) Retention of Same Number of Units and Amount of
Assistance.--Any transfer pursuant to subsection (a) shall
result in--
(1) a total number of dwelling units (including units
retained by the owners and units transferred) covered by
assistance described in subsection (b)(1) after the transfer
remaining the same as such number assisted before the
transfer, with such increases or decreases in unit sizes as
may be contained in a plan approved by a local planning or
development commission or department; and
(2) no reduction in the total amount of the housing
assistance payments under contracts described in subsection
(b)(1).
SEC. 505. PROTECTION AGAINST DISCRIMINATORY TREATMENT.
Section 525 of title 11, the United States Code, is amended
by adding at the end the following:
``(d) A governmental unit that operates a mortgage loan
program, including a loan guarantee or subsidy program, may
not deny the benefits of such program to a disabled veteran
(as defined in section 3741(1) of title 38) because he or she
is or has been a debtor under this title, has been insolvent
before the commencement of a case under this title or during
the pendency of the case but before being granted or denied a
discharge, or has not paid a debt that is dischargeable in
the case under this title.''.
In the matter proposed to be inserted by the amendment of
the Senate to the text of the bill, strike titles VII, IX,
and XI.
The text of House amendment No. 2 to the Senate amendments is as
follows:
In the matter proposed to be inserted by the Senate
amendment to H.R. 3221, strike titles VI (relating to tax-
related provisions), VIII (relating to REIT investment
diversification and empowerment), and X (relating to clean
energy tax stimulus) and add at the end the following new
title (and conform the table of contents accordingly):
TITLE VII--REVENUE AND OTHER PROVISIONS
SEC. 700. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this
title an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or
other provision of the Internal Revenue Code of 1986.
Subtitle A--Housing Tax Incentives
PART 1--MULTI-FAMILY HOUSING
Subpart A--Low-Income Housing Tax Credit
SEC. 701. TEMPORARY INCREASE IN VOLUME CAP FOR LOW-INCOME
HOUSING TAX CREDIT.
Paragraph (3) of section 42(h) is amended by adding at the
end the following new subparagraph:
``(I) Increase in state housing credit ceiling for 2008 and
2009.--In the case of calendar years 2008 and 2009, the
dollar amount in effect under subparagraph (C)(ii)(I) for
such calendar year (after any increase under subparagraph
(H)) shall be increased by $0.20.''.
SEC. 702. DETERMINATION OF CREDIT RATE.
(a) Elimination of Distinction Between New and Existing
Buildings; Minimum Credit Rate for Non-Federally Subsidized
Buildings.--
(1) In general.--Subsection (b) section 42 is amended to
read as follows:
``(b) Applicable Percentage.--For purposes of this
section--
``(1) In general.--The term `applicable percentage' means,
with respect to any building, the appropriate percentage
prescribed by the Secretary for the earlier of--
``(A) the month in which such building is placed in
service, or
``(B) at the election of the taxpayer--
``(i) the month in which the taxpayer and the housing
credit agency enter into an agreement with respect to such
building (which is binding on such agency, the taxpayer, and
all successors in interest) as to the housing credit dollar
amount to be allocated to such building, or
``(ii) in the case of any building to which subsection
(h)(4)(B) applies, the month in which the tax-exempt
obligations are issued.
A month may be elected under clause (ii) only if the election
is made not later than the 5th day after the close of such
month. Such an election, once made, shall be irrevocable.
``(2) Method of prescribing percentages.--
``(A) In general.--For purposes of paragraph (1), the
percentages prescribed by the Secretary for any month shall
be--
``(i) in the case of any building which is not federally
subsidized for the taxable year, the greater of--
``(I) the average percentage determined under subclause
(II) for months in the preceding calendar year, or
``(II) the percentage which will yield over a 10-year
period amounts of credit under subsection (a) which have a
present value equal to 70 percent of the qualified basis of
such building, and
``(ii) in the case of any other building, the percentage
which will yield over a 10-year period amounts of credit
under subsection (a) which have a present value equal to 30
percent of the qualified basis of such building.
``(B) Method of discounting.--The present value under
subparagraph (A) shall be determined--
``(i) as of the last day of the 1st year of the 10-year
period referred to in subparagraph (A),
``(ii) by using a discount rate equal to 72 percent of the
average of the annual Federal mid-term rate and the annual
Federal long-term rate applicable under section 1274(d)(1) to
the month applicable under subparagraph (A) and compounded
annually, and
``(iii) by assuming that the credit allowable under this
section for any year is received on the last day of such
year.
``(3) Cross references.--
``(A) For treatment of certain rehabilitation expenditures
as separate buildings, see subsection (e).
``(B) For determination of applicable percentage for
increases in qualified basis after the 1st year of the credit
period, see subsection (f)(3).
``(C) For authority of housing credit agency to limit
applicable percentage and qualified basis which may be taken
into account under this section with respect to any building,
see subsection (h)(7).''.
(2) Conforming amendments.--
(A) Subparagraph (B) of section 42(e)(3) is amended by
striking ``subsection (b)(2)(B)(ii)'' and inserting
``subsection (b)(2)(A)(ii)''.
(B) Subparagraph (A) of section 42(i)(2) is amended by
striking ``new building'' and inserting ``building''.
(b) Modifications to Definition of Federally Subsidized
Building.--
(1) In general.--Subparagraph (A) of section 42(i)(2) is
amended by striking ``, or any below market Federal loan,''.
(2) Conforming amendments.--
(A) Subparagraph (B) of section 42(i)(2) is amended--
(i) by striking ``balance of loan or'' in the heading
thereof,
(ii) by striking ``loan or'' in the matter preceding clause
(i), and
(iii) by striking ``subsection (d)--'' and all that follows
and inserting ``subsection (d) the proceeds of such
obligation.''.
(B) Subparagraph (C) of section 42(i)(2) is amended--
(i) by striking ``or below market Federal loan'' in the
matter preceding clause (i),
(ii) in clause (i)--
(I) by striking ``or loan (when issued or made)'' and
inserting ``(when issued)'', and
(II) by striking ``the proceeds of such obligation or
loan'' and inserting ``the proceeds of such obligation'', and
[[Page H3273]]
(iii) by striking ``, and such loan is repaid,'' in clause
(ii).
(C) Paragraph (2) of section 42(i) is amended by striking
subparagraphs (D) and (E).
(c) Effective Date.--The amendments made by this subsection
shall apply to buildings placed in service after the date of
the enactment of this Act.
SEC. 703. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS.
(a) Increase in Credit for Certain State Designated
Buildings.--Subparagraph (C) of section 42(d)(5) (relating to
increase in credit for buildings in high cost areas), before
redesignation under subsection (f), is amended by adding at
the end the following new clause:
``(v) Buildings designated by state housing credit
agency.--Any building which is designated by the State
housing credit agency as requiring the increase in credit
under this subparagraph in order for such building to be
financially feasible as part of a qualified low-income
housing project shall be treated for purposes of this
subparagraph as located in a difficult development area which
is designated for purposes of this subparagraph. The
preceding sentence shall not apply to any building if
paragraph (1) of subsection (h) does not apply to any portion
of the eligible basis of such building by reason of paragraph
(4) of such subsection.''.
(b) Modification to Rehabilitation Requirements.--
(1) In general.--Clause (ii) of section 42(e)(3)(A) is
amended--
(A) by striking ``10 percent'' in subclause (I) and
inserting ``20 percent'', and
(B) by striking ``$3,000'' in subclause (II) and inserting
``$6,000''.
(2) Inflation adjustment.--Paragraph (3) of section 42(e)
is amended by adding at the end the following new
subparagraph:
``(D) Inflation adjustment.--In the case of any
expenditures which are treated under paragraph (4) as placed
in service during any calendar year after 2009, the $6,000
amount in subparagraph (A)(ii)(II) shall be increased by an
amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment determined under
section 1(f)(3) for such calendar year by substituting
`calendar year 2008' for `calendar year 1992' in subparagraph
(B) thereof.
Any increase under the preceding sentence which is not a
multiple of $100 shall be rounded to the nearest multiple of
$100.''.
(3) Conforming amendment.--Subclause (II) of section
42(f)(5)(B)(ii) is amended by striking ``if subsection
(e)(3)(A)(ii)(II)'' and all that follows and inserting ``if
the dollar amount in effect under subsection
(e)(3)(A)(ii)(II) were two-thirds of such amount.''.
(c) Increase in Allowable Community Service Facility Space
for Small Projects.--Clause (ii) of section 42(d)(4)(C)
(relating to limitation) is amended by striking ``10 percent
of the eligible basis of the qualified low-income housing
project of which it is a part. For purposes of'' and
inserting ``the sum of--
``(I) 15 percent of so much of the eligible basis of the
qualified low-income housing project of which it is a part as
does not exceed $5,000,000, plus
``(II) 10 percent of so much of the eligible basis of such
project as is not taken into account under subclause (I).
For purposes of''.
(d) Clarification of Treatment of Federal Grants.--
Subparagraph (A) of section 42(d)(5) is amended to read as
follows:
``(A) Federal grants not taken into account in determining
eligible basis.--The eligible basis of a building shall not
include any costs financed with the proceeds of a Federally
funded grant.''.
(e) Simplification of Related Party Rules.--Clause (iii) of
section 42(d)(2)(D), before redesignation under subsection
(f)(2), is amended--
(1) by striking all that precedes subclause (II),
(2) by redesignating subclause (II) as clause (iii) and
moving such clause two ems to the left, and
(3) by striking the last sentence thereof.
(f) Repeal of Deadwood.--
(1) Clause (ii) of section 42(d)(2)(B) is amended by
striking ``the later of--'' and all that follows and
inserting ``the date the building was last placed in
service,''.
(2) Subparagraph (D) of section 42(d)(2) is amended by
striking clause (i) and by redesignating clauses (ii) and
(iii) as clauses (i) and (ii), respectively.
(3) Paragraph (5) of section 42(d) is amended by striking
subparagraph (B) and by redesignating subparagraph (C) as
subparagraph (B).
(g) Effective Date.--The amendments made by this subsection
shall apply to buildings placed in service after the date of
the enactment of this Act.
SEC. 704. OTHER SIMPLIFICATION AND REFORM OF LOW-INCOME
HOUSING TAX INCENTIVES.
(a) Repeal Prohibition on Moderate Rehabilitation
Assistance.--Paragraph (2) of section 42(c) (defining
qualified low-income building) is amended by striking the
flush sentence at the end.
(b) Modification of Time Limit for Incurring 10 Percent of
Project's Cost.--Clause (ii) of section 42(h)(1)(E) is
amended by striking ``(as of the later of the date which is 6
months after the date that the allocation was made or the
close of the calendar year in which the allocation is made)''
and inserting ``(as of the date which is 1 year after the
date that the allocation was made)''.
(c) Repeal of Bonding Requirement on Disposition of
Building.--Paragraph (6) of section 42(j) (relating to no
recapture on disposition of building (or interest therein)
where bond posted) is amended to read as follows:
``(6) No recapture on disposition of building which
continues in qualified use.--
``(A) In general.--The increase in tax under this
subsection shall not apply solely by reason of the
disposition of a building (or an interest therein) if it is
reasonably expected that such building will continue to be
operated as a qualified low-income building for the remaining
compliance period with respect to such building.
``(B) Statute of limitations.--If a building (or an
interest therein) is disposed of during any taxable year and
there is any reduction in the qualified basis of such
building which results in an increase in tax under this
subsection for such taxable or any subsequent taxable year,
then--
``(i) the statutory period for the assessment of any
deficiency with respect to such increase in tax shall not
expire before the expiration of 3 years from the date the
Secretary is notified by the taxpayer (in such manner as the
Secretary may prescribe) of such reduction in qualified
basis, and
``(ii) such deficiency may be assessed before the
expiration of such 3-year period notwithstanding the
provisions of any other law or rule of law which would
otherwise prevent such assessment.''.
(d) Energy Efficiency and Historic Nature Taken Into
Account in Making Allocations.--Subparagraph (C) of section
42(m)(1) (relating to plans for allocation of credit among
projects) is amended by striking ``and'' at the end of clause
(vii), by striking the period at the end of clause (viii) and
inserting a comma, and by adding at the end the following new
clauses:
``(ix) the energy efficiency of the project, and
``(x) the historic nature of the project.''.
(e) Continued Eligibility for Students Who Received Foster
Care Assistance.--Clause (i) of section 42(i)(3)(D) is
amended by striking ``or'' at the end of subclause (I), by
redesignating subclause (II) as subclause (III), and by
inserting after subclause (I) the following new subclause:
``(II) a student who was previously under the care and
placement responsibility of the State agency responsible for
administering a plan under part B or part E of title IV of
the Social Security Act, or''.
(f) Treatment of Rural Projects.--Section 42(i) (relating
to definitions and special rules) is amended by adding at the
end the following new paragraph:
``(8) Treatment of rural projects.--For purposes of this
section, in the case of any project for residential rental
property located in a rural area (as defined in section 520
of the Housing Act of 1949), any income limitation measured
by reference to area median gross income shall be measured by
reference to the greater of area median gross income or
national non-metropolitan median income. The preceding
sentence shall not apply with respect to any building if
paragraph (1) of section 42(h) does not apply by reason of
paragraph (4) thereof to any portion of the credit determined
under this section with respect to such building.''.
(g) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to buildings placed in service after the date of the
enactment of this Act.
(2) Repeal of bonding requirement on disposition of
building.--The amendment made by subsection (c) shall apply
to--
(A) interests in buildings disposed after the date of the
enactment of this Act, and
(B) interests in buildings disposed of on or before such
date if--
(i) it is reasonably expected that such building will
continue to be operated as a qualified low-income building
(within the meaning of section 42 of the Internal Revenue
Code of 1986) for the remaining compliance period (within the
meaning of such section) with respect to such building, and
(ii) the taxpayer elects the application of this
subparagraph with respect to such disposition.
Notwithstanding the preceding sentence, the amendments made
by subsection (c) shall not apply to any disposition after
the date 5 years after the date of the enactment of this Act.
(3) Energy efficiency and historic nature taken into
account in making allocations.--The amendments made by
subsection (d) shall apply to allocations made after December
31, 2008.
(4) Continued eligibility for students who received foster
care assistance.--The amendments made by subsection (e) shall
apply to determinations made after the date of the enactment
of this Act.
(5) Treatment of rural projects.--The amendment made by
subsection (f) shall apply to determinations made after the
date of the enactment of this Act.
Subpart B--Modifications to Tax-Exempt Housing Bond Rules
SEC. 706. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING
RESIDENTIAL RENTAL PROJECTS.
(a) In General.--Subsection (i) of section 146 (relating to
treatment of refunding issues) is amended by adding at the
end the following new paragraph:
[[Page H3274]]
``(6) Treatment of certain residential rental project bonds
as refunding bonds irrespective of obligor.--
``(A) In general.--If, during the 6-month period beginning
on the date of a repayment of a loan financed by an issue 95
percent or more of the net proceeds of which are used to
provide projects described in section 142(d), such repayment
is used to provide a new loan for any project so described,
any bond which is issued to refinance such issue shall be
treated as a refunding issue to the extent the principal
amount of such refunding issue does not exceed the principal
amount of the bonds refunded.
``(B) Limitations.--Subparagraph (A) shall apply to only
one refunding of the original issue and only if--
``(i) the refunding issue is issued not later than 4 years
after the date on which the original issue was issued,
``(ii) the latest maturity date of any bond of the
refunding issue is not later than 34 years after the date on
which the refunded bond was issued, and
``(iii) the refunding issue is approved in accordance with
section 147(f) before the issuance of the refunding issue.''.
(b) Low-Income Housing Credit.--Clause (ii) of section
42(h)(4)(A) is amended by inserting ``or such financing is
refunded as described in section 146(i)(6)'' before the
period at the end.
(c) Effective Date.--The amendments made by this section
shall apply to repayments of loans received after the date of
the enactment of this Act.
SEC. 707. COORDINATION OF CERTAIN RULES APPLICABLE TO LOW-
INCOME HOUSING CREDIT AND QUALIFIED RESIDENTIAL
RENTAL PROJECT EXEMPT FACILITY BONDS.
(a) Determination of Next Available Unit.--Paragraph (3) of
section 142(d) (relating to current income determinations) is
amended by adding at the end the following new subparagraph:
``(C) Exception for projects with respect to which
affordable housing credit is allowed.--In the case of a
project with respect to which credit is allowed under section
42, the second sentence of subparagraph (B) shall be applied
by substituting `building (within the meaning of section 42)'
for `project'.''.
(b) Students.--Paragraph (2) of section 142(d) (relating to
definitions and special rules) is amended by adding at the
end the following new subparagraph:
``(C) Students.--Rules similar to the rules of 42(i)(3)(D)
shall apply for purposes of this subsection.''.
(c) Single-Room Occupancy Units.--Paragraph (2) of section
142(d) (relating to definitions and special rules), as
amended by subsection (b), is further amended by adding at
the end the following new subparagraph:
``(D) Single-room occupancy units.--A unit shall not fail
to be treated as a residential unit merely because such unit
is a single-room occupancy unit (within the meaning of
section 42).''.
(d) Effective Date.--The amendments made by this section
shall apply to determinations of the status of qualified
residential rental projects for periods beginning after the
date of the enactment of this Act, with respect to bonds
issued before, on, or after such date.
Subpart C--Reforms Related to the Low-Income Housing Credit and Tax-
Exempt Housing Bonds
SEC. 709. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS
INCOME.
(a) In General.--Paragraph (2) of section 142(d), as
amended by section 707, is further amended by adding at the
end the following new subparagraph:
``(E) Hold harmless for reductions in area median gross
income.--
``(i) In general.--Any determination of area median gross
income under subparagraph (B) with respect to any project for
any calendar year after 2008 shall not be less than the area
median gross income determined under such subparagraph with
respect to such project for the calendar year preceding the
calendar year for which such determination is made.
``(ii) Special rule for certain census changes.--In the
case of a HUD hold harmless impacted project, the area median
gross income with respect to such project for any calendar
year after 2008 (hereafter in this clause referred to as the
current calendar year) shall be the greater of the amount
determined without regard to this clause or the sum of--
``(I) the area median gross income determined under the HUD
hold harmless policy with respect to such project for
calendar year 2008, plus
``(II) any increase in the area median gross income
determined under subparagraph (B) (determined without regard
to the HUD hold harmless policy and this subparagraph) with
respect to such project for the current calendar year over
the area median gross income (as so determined) with respect
to such project for calendar year 2008.
``(iii) HUD hold harmless policy.--The term `HUD hold
harmless policy' means the regulations under which a policy
similar to the rules of clause (i) applied to prevent a
change in the method of determining area median gross income
from resulting in a reduction in the area median gross income
determined with respect to certain projects in calendar years
2007 and 2008.
``(iv) HUD hold harmless impacted project.--The term `HUD
hold harmless impacted project' means any project with
respect to which area median gross income was determined
under subparagraph (B) for calendar year 2007 or 2008 if such
determination would have been less but for the HUD hold
harmless policy.''.
(b) Effective Date.--The amendment made by this section
shall apply to determinations of area median gross income for
calendar years after 2008.
SEC. 710. EXCEPTION TO ANNUAL CURRENT INCOME DETERMINATION
REQUIREMENT WHERE DETERMINATION NOT RELEVANT.
(a) In General.--Subparagraph (A) of section 142(d)(3) is
amended by adding at the end the following new sentence:
``The preceding sentence shall not apply with respect to any
project for any year if during such year no residential unit
in the project is occupied by a new resident whose income
exceeds the applicable income limit.''.
(b) Effective Date.--The amendment made by this section
shall apply to years ending after the date of the enactment
of this Act.
PART 2--SINGLE FAMILY HOUSING
SEC. 712. FIRST-TIME HOMEBUYER CREDIT.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 is amended by redesignating section 36 as section
37 and by inserting after section 35 the following new
section:
``SEC. 36. FIRST-TIME HOMEBUYER CREDIT.
``(a) Allowance of Credit.--In the case of an individual
who is a first-time homebuyer of a principal residence in the
United States during a taxable year, there shall be allowed
as a credit against the tax imposed by this subtitle for such
taxable year an amount equal to 10 percent of the purchase
price of the residence.
``(b) Limitations.--
``(1) Dollar limitation.--
``(A) In general.--Except as otherwise provided in this
paragraph, the credit allowed under subsection (a) shall not
exceed $7,500.
``(B) Married individuals filing separately.--In the case
of a married individual filing a separate return,
subparagraph (A) shall be applied by substituting `$3,750'
for `$7,500'.
``(C) Other individuals.--If two or more individuals who
are not married purchase a principal residence, the amount of
the credit allowed under subsection (a) shall be allocated
among such individuals in such manner as the Secretary may
prescribe, except that the total amount of the credits
allowed to all such individuals shall not exceed $7,500.
``(2) Limitation based on modified adjusted gross income.--
``(A) In general.--The amount allowable as a credit under
subsection (a) (determined without regard to this paragraph)
for the taxable year shall be reduced (but not below zero) by
the amount which bears the same ratio to the amount which is
so allowable as--
``(i) the excess (if any) of--
``(I) the taxpayer's modified adjusted gross income for
such taxable year, over
``(II) $70,000 ($140,000 in the case of a joint return),
bears to
``(ii) $20,000.
``(B) Modified adjusted gross income.--For purposes of
subparagraph (A), the term `modified adjusted gross income'
means the adjusted gross income of the taxpayer for the
taxable year increased by any amount excluded from gross
income under section 911, 931, or 933.
``(c) Definitions.--For purposes of this section--
``(1) First-time homebuyer.--The term `first-time
homebuyer' means any individual if such individual (and if
married, such individual's spouse) had no present ownership
interest in a principal residence during the 3-year period
ending on the date of the purchase of the principal residence
to which this section applies.
``(2) Principal residence.--The term `principal residence'
has the same meaning as when used in section 121.
``(3) Purchase.--
``(A) In general.--The term `purchase' means any
acquisition, but only if--
``(i) the property is not acquired from a person related to
the person acquiring it, and
``(ii) the basis of the property in the hands of the person
acquiring it is not determined--
``(I) in whole or in part by reference to the adjusted
basis of such property in the hands of the person from whom
acquired, or
``(II) under section 1014(a) (relating to property acquired
from a decedent).
``(B) Construction.--A residence which is constructed by
the taxpayer shall be treated as purchased by the taxpayer on
the date the taxpayer first occupies such residence.
``(4) Purchase price.--The term `purchase price' means the
adjusted basis of the principal residence on the date such
residence is purchased.
``(5) Related persons.--A person shall be treated as
related to another person if the relationship between such
persons would result in the disallowance of losses under
section 267 or 707(b) (but, in applying section 267(b) and
(c) for purposes of this section, paragraph (4) of section
267(c) shall be treated as providing that the family of an
individual shall include only his spouse, ancestors, and
lineal descendants).
``(d) Exceptions.--No credit under subsection (a) shall be
allowed to any taxpayer for any taxable year with respect to
the purchase of a residence if--
[[Page H3275]]
``(1) a credit under section 1400C (relating to first-time
homebuyer in the District of Columbia) is allowable to the
taxpayer (or the taxpayer's spouse) for such taxable year or
any prior taxable year,
``(2) the residence is financed by the proceeds of a
qualified mortgage issue the interest on which is exempt from
tax under section 103,
``(3) the taxpayer is a nonresident alien, or
``(4) the taxpayer disposes of such residence (or such
residence ceases to be the principal residence of the
taxpayer (and, if married, the taxpayer's spouse)) before the
close of such taxable year.
``(e) Reporting.--If the Secretary requires information
reporting under section 6045 by a person described in
subsection (e)(2) thereof to verify the eligibility of
taxpayers for the credit allowable by this section, the
exception provided by section 6045(e) shall not apply.
``(f) Recapture of Credit.--
``(1) In general.--Except as otherwise provided in this
subsection, if a credit under subsection (a) is allowed to a
taxpayer, the tax imposed by this chapter shall be increased
by 6\2/3\ percent of the amount of such credit for each
taxable year in the recapture period.
``(2) Acceleration of recapture.--If a taxpayer disposes of
the principal residence with respect to which a credit was
allowed under subsection (a) (or such residence ceases to be
the principal residence of the taxpayer (and, if married, the
taxpayer's spouse)) before the end of the recapture period--
``(A) the tax imposed by this chapter for the taxable year
of such disposition or cessation, shall be increased by the
excess of the amount of the credit allowed over the amounts
of tax imposed by paragraph (1) for preceding taxable years,
and
``(B) paragraph (1) shall not apply with respect to such
credit for such taxable year or any subsequent taxable year.
``(3) Limitation based on gain.--In the case of the sale of
the principal residence to a person who is not related to the
taxpayer, the increase in tax determined under paragraph (2)
shall not exceed the amount of gain (if any) on such sale.
Solely for purposes of the preceding sentence, the adjusted
basis of such residence shall be reduced by the amount of the
credit allowed under subsection (a) to the extent not
previously recaptured under paragraph (1).
``(4) Exceptions.--
``(A) Death of taxpayer.--Paragraphs (1) and (2) shall not
apply to any taxable year ending after the date of the
taxpayer's death.
``(B) Involuntary conversion.--Paragraph (2) shall not
apply in the case of a residence which is compulsorily or
involuntarily converted (within the meaning of section
1033(a)) if the taxpayer acquires a new principal residence
during the 2-year period beginning on the date of the
disposition or cessation referred to in paragraph (2).
Paragraph (2) shall apply to such new principal residence
during the recapture period in the same manner as if such new
principal residence were the converted residence.
``(C) Transfers between spouses or incident to divorce.--In
the case of a transfer of a residence to which section
1041(a) applies--
``(i) paragraph (2) shall not apply to such transfer, and
``(ii) in the case of taxable years ending after such
transfer, paragraphs (1) and (2) shall apply to the
transferee in the same manner as if such transferee were the
transferor (and shall not apply to the transferor).
``(5) Joint returns.--In the case of a credit allowed under
subsection (a) with respect to a joint return, half of such
credit shall be treated as having been allowed to each
individual filing such return for purposes of this
subsection.
``(6) Recapture period.--For purposes of this subsection,
the term `recapture period' means the 15 taxable years
beginning with the second taxable year following the taxable
year in which the purchase of the principal residence for
which a credit is allowed under subsection (a) was made.
``(g) Application of Section.--This section shall only
apply to a principal residence purchased by the taxpayer on
or after April 9, 2008, and before April 1, 2009.''.
(b) Conforming Amendments.--
(1) Section 26(b)(2) is amended by striking ``and'' at the
end of subparagraph (U), by striking the period and inserting
``, and'' and the end of subparagraph (V), and by inserting
after subparagraph (V) the following new subparagraph:
``(W) section 36(f) (relating to recapture of homebuyer
credit).''.
(2) Section 6211(b)(4)(A) is amended by striking ``34,''
and all that follows through ``6428'' and inserting ``34, 35,
36, 53(e), and 6428''.
(3) Section 1324(b)(2) of title 31, United States Code, is
amended by inserting ``, 36,'' after ``section 35''.
(4) The table of sections for subpart C of part IV of
subchapter A of chapter 1 is amended by redesignating the
item relating to section 36 as an item relating to section 37
and by inserting before such item the following new item:
``Sec. 36. First-time homebuyer credit.''.
(c) Effective Date.--The amendments made by this section
shall apply to residences purchased on or after April 9,
2008, in taxable years ending on or after such date.
SEC. 713. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY
TAXES FOR NONITEMIZERS.
(a) In General.--Section 63(c)(1) (defining standard
deduction) is amended by striking ``and'' at the end of
subparagraph (A), by striking the period at the end of
subparagraph (B) and inserting ``, and'', and by adding at
the end the following new subparagraph:
``(C) in the case of any taxable year beginning in 2008,
the real property tax deduction.''.
(b) Definition.--Section 63(c) is amended by adding at the
end the following new paragraph:
``(7) Real property tax deduction.--For purposes of
paragraph (1), the real property tax deduction is the lesser
of--
``(A) the amount allowable as a deduction under this
chapter for State and local taxes described in section
164(a)(1), or
``(B) $350 ($700 in the case of a joint return).
Any taxes taken into account under section 62(a) shall not be
taken into account under this paragraph.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
PART 3--GENERAL PROVISIONS
SEC. 715. TEMPORARY LIBERALIZATION OF TAX-EXEMPT HOUSING BOND
RULES.
(a) Temporary Increase in Volume Cap.--
(1) In general.--Subsection (d) of section 146 is amended
by adding at the end the following new paragraph:
``(5) Increase and set aside for housing bonds for 2008.--
``(A) Increase for 2008.--In the case of calendar year
2008, the State ceiling for each State shall be increased by
an amount equal to $10,000,000,000 multiplied by a fraction--
``(i) the numerator of which is the population of such
State, and
``(ii) the denominator of which is the total population of
all States.
``(B) Set aside.--
``(i) In general.--Any amount of the State ceiling for any
State which is attributable to an increase under this
paragraph shall be allocated solely for one or more qualified
housing issues.
``(ii) Qualified housing issue.--For purposes of this
paragraph, the term `qualified housing issue' means--
``(I) an issue described in section 142(a)(7) (relating to
qualified residential rental projects), or
``(II) a qualified mortgage issue (determined by
substituting `12-month period' for `42-month period' each
place it appears in section 143(a)(2)(D)(i)).''.
(2) Carryforward of unused limitations.--Subsection (f) of
section 146 is amended by adding at the end the following new
paragraph:
``(6) Special rules for increased volume cap under
subsection (d)(5).--No amount which is attributable to the
increase under subsection (d)(5) may be used--
``(A) for any issue other than a qualified housing issue
(as defined in subsection (d)(5)), or
``(B) to issue any bond after calendar year 2010.''.
(b) Temporary Rule for Use of Qualified Mortgage Bonds
Proceeds for Subprime Refinancing Loans.--
(1) In general.--Section 143(k) (relating to other
definitions and special rules) is amended by adding at the
end the following new paragraph:
``(12) Special rules for subprime refinancings.--
``(A) In general.--Notwithstanding the requirements of
subsection (i)(1), the proceeds of a qualified mortgage issue
may be used to refinance a mortgage on a residence which was
originally financed by the mortgagor through a qualified
subprime loan.
``(B) Special rules.--In applying subparagraph (A) to any
refinancing--
``(i) subsection (a)(2)(D)(i) shall be applied by
substituting `12-month period' for `42-month period' each
place it appears,
``(ii) subsection (d) (relating to 3-year requirement)
shall not apply, and
``(iii) subsection (e) (relating to purchase price
requirement) shall be applied by using the market value of
the residence at the time of refinancing in lieu of the
acquisition cost.
``(C) Qualified subprime loan.--The term `qualified
subprime loan' means an adjustable rate single-family
residential mortgage loan made after December 31, 2001, and
before January 1, 2008, that the bond issuer determines would
be reasonably likely to cause financial hardship to the
borrower if not refinanced.
``(D) Termination.--This paragraph shall not apply to any
bonds issued after December 31, 2010.''.
(c) Effective Date.--The amendments made by this section
shall apply to bonds issued after the date of the enactment
of this Act.
SEC. 716. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON
TAX-EXEMPT HOUSING BONDS, LOW-INCOME HOUSING
TAX CREDIT, AND REHABILITATION CREDIT.
(a) Tax-Exempt Interest on Certain Housing Bonds Exempted
From Alternative Minimum Tax.--
(1) In general.--Subparagraph (C) of section 57(a)(5)
(relating to specified private activity bonds) is amended by
redesignating clauses (iii) and (iv) as clauses (iv) and (v),
respectively, and by inserting after clause (ii) the
following new clause:
``(iii) Exception for certain housing bonds.--For purposes
of clause (i), the term `private activity bond' shall not
include any bond issued after the date of the enactment of
this clause if such bond is--
[[Page H3276]]
``(I) an exempt facility bond issued as part of an issue 95
percent or more of the net proceeds of which are to be used
to provide qualified residential rental projects (as defined
in section 142(d)),
``(II) a qualified mortgage bond (as defined in section
143(a)), or
``(III) a qualified veterans' mortgage bond (as defined in
section 143(b)).
The preceding sentence shall not apply to any refunding bond
unless such preceding sentence applied to the refunded bond
(or in the case of a series of refundings, the original
bond).''.
(2) No adjustment to adjusted current earnings.--
Subparagraph (B) of section 56(g)(4) is amended by adding at
the end the following new clause:
``(iii) Tax exempt interest on certain housing bonds.--
Clause (i) shall not apply in the case of any interest on a
bond to which section 57(a)(5)(C)(iii) applies.''.
(b) Allowance of Low-Income Housing Credit Against
Alternative Minimum Tax.--Subparagraph (B) of section
38(c)(4) (relating to specified credits) is amended by
redesignating clauses (ii) through (iv) as clauses (iii)
through (v) and inserting after clause (i) the following new
clause:
``(ii) the credit determined under section 42 to the extent
attributable to buildings placed in service after December
31, 2007,''.
(c) Allowance of Rehabilitation Credit Against Alternative
Minimum Tax.--Subparagraph (B) of section 38(c)(4), as
amended by subsection (b), is amended by striking ``and'' at
the end of clause (iv), by redesignating clause (v) as clause
(vi), and by inserting after clause (iv) the following new
clause:
``(v) the credit determined under section 47 to the extent
attributable to qualified rehabilitation expenditures
properly taken into account for periods after December 31,
2007, and''.
(d) Effective Date.--
(1) Housing bonds.--The amendments made by subsection (a)
shall apply to bonds issued after the date of the enactment
of this Act.
(2) Low income housing credit.--The amendments made by
subsection (b) shall apply to credits determined under
section 42 of the Internal Revenue Code of 1986 to the extent
attributable to buildings placed in service after December
31, 2007.
(3) Rehabilitation credit.--The amendments made by
subsection (c) shall apply to credits determined under
section 47 of the Internal Revenue Code of 1986 to the extent
attributable to qualified rehabilitation expenditures
properly taken into account for periods after December 31,
2007.
SEC. 717. BONDS GUARANTEED BY FEDERAL HOME LOAN BANKS
ELIGIBLE FOR TREATMENT AS TAX-EXEMPT BONDS.
(a) In General.--Subparagraph (A) of section 149(b)(3)
(relating to exceptions for certain insurance programs) is
amended by striking ``or'' at the end of clause (ii), by
striking the period at the end of clause (iii) and inserting
``, or'' and by adding at the end the following new clause:
``(iv) any guarantee by a Federal home loan bank made in
connection with the original issuance of a bond during the
period beginning on the date of the enactment of this Act and
ending on December 31, 2010 (or a renewal or extension of a
guarantee so made).''.
(b) Safety and Soundness Requirements.--Paragraph (3) of
section 149(b) is amended by adding at the end the following
new subparagraph:
``(E) Safety and soundness requirements for federal home
loan banks.--Clause (iv) of subparagraph (A) shall not apply
to any guarantee by a Federal home loan bank unless such bank
meets safety and soundness collateral requirements for such
guarantees which are at least as stringent as such
requirements which apply under regulations applicable to such
guarantees by Federal home loan banks as in effect on April
9, 2008.''.
(c) Effective Date.--The amendments made by this section
shall apply to guarantees made after the date of the
enactment of this Act.
SEC. 718. MODIFICATION OF RULES PERTAINING TO FIRPTA
NONFOREIGN AFFIDAVITS.
(a) In General.--Subsection (b) of section 1445 (relating
to exemptions) is amended by adding at the end the following:
``(9) Alternative procedure for furnishing nonforeign
affidavit.--For purposes of paragraphs (2) and (7)--
``(A) In general.--Paragraph (2) shall be treated as
applying to a transaction if, in connection with a
disposition of a United States real property interest--
``(i) the affidavit specified in paragraph (2) is furnished
to a qualified substitute, and
``(ii) the qualified substitute furnishes a statement to
the transferee stating, under penalty of perjury, that the
qualified substitute has such affidavit in his possession.
``(B) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
this paragraph.''.
(b) Qualified Substitute.--Subsection (f) of section 1445
(relating to definitions) is amended by adding at the end the
following new paragraph:
``(6) Qualified substitute.--The term `qualified
substitute' means, with respect to a disposition of a United
States real property interest--
``(A) the person (including any attorney or title company)
responsible for closing the transaction, other than the
transferor's agent, and
``(B) the transferee's agent.''.
(c) Exemption Not To Apply if Knowledge or Notice That
Affidavit or Statement Is False.--
(1) In general.--Paragraph (7) of section 1445(b) (relating
to special rules for paragraphs (2) and (3)) is amended to
read as follows:
``(7) Special rules for paragraphs (2), (3), and (9).--
Paragraph (2), (3), or (9) (as the case may be) shall not
apply to any disposition--
``(A) if--
``(i) the transferee or qualified substitute has actual
knowledge that the affidavit referred to in such paragraph,
or the statement referred to in paragraph (9)(A)(ii), is
false, or
``(ii) the transferee or qualified substitute receives a
notice (as described in subsection (d)) from a transferor's
agent, transferee's agent, or qualified substitute that such
affidavit or statement is false, or
``(B) if the Secretary by regulations requires the
transferee or qualified substitute to furnish a copy of such
affidavit or statement to the Secretary and the transferee or
qualified substitute fails to furnish a copy of such
affidavit or statement to the Secretary at such time and in
such manner as required by such regulations.''.
(2) Liability.--
(A) Notice.--Paragraph (1) of section 1445(d) (relating to
notice of false affidavit; foreign corporations) is amended
to read as follows:
``(1) Notice of false affidavit; foreign corporations.--
If--
``(A) the transferor furnishes the transferee or qualified
substitute an affidavit described in paragraph (2) of
subsection (b) or a domestic corporation furnishes the
transferee an affidavit described in paragraph (3) of
subsection (b), and
``(B) in the case of--
``(i) any transferor's agent--
``(I) such agent has actual knowledge that such affidavit
is false, or
``(II) in the case of an affidavit described in subsection
(b)(2) furnished by a corporation, such corporation is a
foreign corporation, or
``(ii) any transferee's agent or qualified substitute, such
agent or substitute has actual knowledge that such affidavit
is false,
such agent or qualified substitute shall so notify the
transferee at such time and in such manner as the Secretary
shall require by regulations.''.
(B) Failure to furnish notice.--Paragraph (2) of section
1445(d) (relating to failure to furnish notice) is amended to
read as follows:
``(2) Failure to furnish notice.--
``(A) In general.--If any transferor's agent, transferee's
agent, or qualified substitute is required by paragraph (1)
to furnish notice, but fails to furnish such notice at such
time or times and in such manner as may be required by
regulations, such agent or substitute shall have the same
duty to deduct and withhold that the transferee would have
had if such agent or substitute had complied with paragraph
(1).
``(B) Liability limited to amount of compensation.--An
agent's or substitute's liability under subparagraph (A)
shall be limited to the amount of compensation the agent or
substitute derives from the transaction.''.
(C) Conforming amendment.--The heading for section 1445(d)
is amended by striking ``or Transferee's Agents'' and
inserting ``, Transferee's Agents, or Qualified
Substitutes''.
(d) Effective Date.--The amendments made by this section
shall apply to dispositions of United States real property
interests after the date of the enactment of this Act.
SEC. 719. MODIFICATION OF DEFINITION OF TAX-EXEMPT USE
PROPERTY FOR PURPOSES OF THE REHABILITATION
CREDIT.
(a) In General.--Subclause (I) of section 47(c)(2)(B)(v) is
amended by striking ``section 168(h)'' and inserting
``section 168(h), except that `50 percent' shall be
substituted for `35 percent' in paragraph (1)(B)(iii)
thereof''.
(b) Effective Date.--The amendments made by this section
shall apply to expenditures properly taken into account for
periods after December 31, 2007.
Subtitle B--Reforms Related to Real Estate Investment Trusts
PART 1--FOREIGN CURRENCY AND OTHER QUALIFIED ACTIVITIES
SEC. 721. REVISIONS TO REIT INCOME TESTS.
(a) Addition of Permissible Income Categories.--Section
856(c) (relating to limitations) is amended--
(1) by striking ``and'' at the end of paragraph (2)(G) and
by inserting after paragraph (2)(H) the following new
subparagraphs:
``(I) passive foreign exchange gains; and
``(J) any other item of income or gain as determined by the
Secretary;'', and
(2) by striking ``and'' at the end of paragraphs (3)(H) and
(3)(I) and by inserting after paragraph (3)(I) the following
new subparagraphs:
``(J) real estate foreign exchange gains; and
``(K) any other item of income or gain as determined by the
Secretary; and''.
(b) Rules Regarding Foreign Currency Transactions.--Section
856 (defining real estate investment trust) is amended by
adding at the end the following new subsection:
``(n) Rules Regarding Foreign Currency Transactions.--With
respect to any taxable year--
[[Page H3277]]
``(1) Real estate foreign exchange gains.--For purposes of
subsection (c)(3)(J), the term `real estate foreign exchange
gains' means--
``(A) foreign currency gains (as defined in section
988(b)(1)) which are attributable to--
``(i) any item described in subsection (c)(3) (other than
in subparagraph (J) thereof),
``(ii) the acquisition or ownership of obligations secured
by mortgages on real property or on interests in real
property (other than foreign currency gains attributable to
any item described in clause (i)), or
``(iii) becoming or being the obligor under obligations
secured by mortgages on real property or on interests in real
property (other than foreign currency gains attributable to
any item described in clause (i)),
``(B) gains described in section 987 attributable to a
qualified business unit (as defined by section 989) of the
real estate investment trust, but only if such qualified
business unit meets the requirements under--
``(i) subsection (c)(3) (without regard to subparagraph (J)
thereof) for the taxable year, and
``(ii) subsection (c)(4)(A) at the close of each quarter
that the real estate investment trust has directly or
indirectly held the qualified business unit, and
``(C) any other foreign currency gains as determined by the
Secretary.
``(2) Passive foreign exchange gains.--For purposes of
subsection (c)(2)(I), the term `passive foreign exchange
gains' means--
``(A) real estate foreign exchange gains,
``(B) foreign currency gains (as defined in section
988(b)(1)) which are not described in subparagraph (A) and
which are attributable to any item described in subsection
(c)(2) (other than in subparagraph (I) thereof), and
``(C) any other foreign currency gains as determined by the
Secretary.''.
(c) Addition to REIT Hedging Rule.--Subparagraph (G) of
section 856(c)(5) is amended to read as follows:
``(G) Treatment of certain hedging instruments.--Except to
the extent as determined by the Secretary--
``(i) any income of a real estate investment trust from a
hedging transaction (as defined in clause (ii) or (iii) of
section 1221(b)(2)(A)) which is clearly identified pursuant
to section 1221(a)(7), including gain from the sale or
disposition of such a transaction, shall not constitute gross
income under paragraphs (2) and (3) to the extent that the
transaction hedges any indebtedness incurred or to be
incurred by the trust to acquire or carry real estate assets,
and
``(ii) any income of a real estate investment trust from a
transaction entered into by the trust primarily to manage
risk of currency fluctuations with respect to any item
described in paragraph (2) or (3), including gain from the
termination of such a transaction, shall not constitute gross
income under paragraphs (2) and (3), but only if such
transaction is clearly identified as such before the close of
the day on which it was acquired, originated, or entered into
(or such other time as the Secretary may prescribe).''.
(d) Authority to Exclude Items of Income From REIT Income
Tests.--Section 856(c)(5) is amended by adding at the end the
following new subparagraph:
``(H) Secretarial authority to exclude other items of
income.--The Secretary is authorized to determine whether any
item of income or gain which does not otherwise qualify under
paragraph (2) or (3) may be considered as not constituting
gross income solely for purposes of this part.''.
SEC. 722. REVISIONS TO REIT ASSET TESTS.
(a) Clarification of Valuation Test.--The first sentence in
the matter following section 856(c)(4)(B)(iii)(III) is
amended by inserting ``(including a discrepancy caused solely
by the change in the foreign currency exchange rate used to
value a foreign asset)'' after ``such requirements''.
(b) Clarification of Permissible Asset Category.--Section
856(c)(5), as amended by section 721(d), is amended by adding
at the end the following new subparagraph:
``(I) Cash.--The term `cash' includes foreign currency if
the real estate investment trust or its qualified business
unit (as defined in section 989) uses such foreign currency
as its functional currency (as defined in section 985(b)).''.
SEC. 723. CONFORMING FOREIGN CURRENCY REVISIONS.
(a) Net Income From Foreclosure Property.--Clause (i) of
section 857(b)(4)(B) is amended to read as follows:
``(i) gain (including any foreign currency gain, as defined
in section 988(b)(1)) from the sale or other disposition of
foreclosure property described in section 1221(a)(1) and the
gross income for the taxable year derived from foreclosure
property (as defined in section 856(e)), but only to the
extent such gross income is not described in (or, in the case
of foreign currency gain, not attributable to gross income
described in) section 856(c)(3) other than subparagraph (F)
thereof, over''.
(b) Net Income From Prohibited Transactions.--Clause (i) of
section 857(b)(6)(B) is amended to read as follows:
``(i) the term `net income derived from prohibited
transactions' means the excess of the gain (including any
foreign currency gain, as defined in section 988(b)(1)) from
prohibited transactions over the deductions (including any
foreign currency loss, as defined in section 988(b)(2))
allowed by this chapter which are directly connected with
prohibited transactions;''.
PART 2--TAXABLE REIT SUBSIDIARIES
SEC. 725. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.
Section 856(c)(4)(B)(ii) is amended by striking ``20
percent'' and inserting ``25 percent''.
PART 3--DEALER SALES
SEC. 727. HOLDING PERIOD UNDER SAFE HARBOR.
Section 857(b)(6) (relating to income from prohibited
transactions) is amended--
(1) by striking ``4 years'' in subparagraphs (C)(i),
(C)(iv), and (D)(i) and inserting ``2 years'',
(2) by striking ``4-year period'' in subparagraphs (C)(ii),
(D)(ii), and (D)(iii) and inserting ``2-year period'', and
(3) by striking ``real estate asset''and all that follows
through ``if'' in the matter preceding clause (i) of
subparagraphs (C) and (D), respectively, and inserting ``real
estate asset (as defined in section 856(c)(5)(B)) and which
is described in section 1221(a)(1) if''.
SEC. 728. DETERMINING VALUE OF SALES UNDER SAFE HARBOR.
Section 857(b)(6) is amended--
(1) by striking the semicolon at the end of subparagraph
(C)(iii) and inserting ``, or (III) the fair market value of
property (other than sales of foreclosure property or sales
to which section 1033 applies) sold during the taxable year
does not exceed 10 percent of the fair market value of all of
the assets of the trust as of the beginning of the taxable
year;'', and
(2) by adding ``or'' at the end of subclause (II) of
subparagraph (D)(iv) and by adding at the end of such
subparagraph the following new subclause:
``(III) the fair market value of property (other than sales
of foreclosure property or sales to which section 1033
applies) sold during the taxable year does not exceed 10
percent of the fair market value of all of the assets of the
trust as of the beginning of the taxable year,''.
PART 4--HEALTH CARE REITS
SEC. 730. CONFORMITY FOR HEALTH CARE FACILITIES.
(a) Related Party Rentals.--Subparagraph (B) of section
856(d)(8) (relating to special rule for taxable REIT
subsidiaries) is amended to read as follows:
``(B) Exception for certain lodging facilities and health
care property.--The requirements of this subparagraph are met
with respect to an interest in real property which is a
qualified lodging facility or a qualified health care
property (as defined in subsection (e)(6)(D)(i)) leased by
the trust to a taxable REIT subsidiary of the trust if the
property is operated on behalf of such subsidiary by a person
who is an eligible independent contractor. For purposes of
this section, a taxable REIT subsidiary is not considered to
be operating or managing a qualified health care property or
qualified lodging facility solely because it directly or
indirectly possesses a license, permit or similar instrument
enabling it to do so.''.
(b) Eligible Independent Contractor.--Subparagraphs (A) and
(B) of section 856(d)(9) (relating to eligible independent
contractor) are amended to read as follows:
``(A) In general.--The term `eligible independent
contractor' means, with respect to any qualified lodging
facility or qualified health care property (as defined in
subsection (e)(6)(D)(i)), any independent contractor if, at
the time such contractor enters into a management agreement
or other similar service contract with the taxable REIT
subsidiary to operate such qualified lodging facility or
qualified health care property, such contractor (or any
related person) is actively engaged in the trade or business
of operating qualified lodging facilities or qualified health
care properties, respectively, for any person who is not a
related person with respect to the real estate investment
trust or the taxable REIT subsidiary.
``(B) Special rules.--Solely for purposes of this paragraph
and paragraph (8)(B), a person shall not fail to be treated
as an independent contractor with respect to any qualified
lodging facility or qualified health care property (as so
defined) by reason of the following:
``(i) The taxable REIT subsidiary bears the expenses for
the operation of such qualified lodging facility or qualified
health care property pursuant to the management agreement or
other similar service contract.
``(ii) The taxable REIT subsidiary receives the revenues
from the operation of such qualified lodging facility or
qualified health care property, net of expenses for such
operation and fees payable to the operator pursuant to such
agreement or contract.
``(iii) The real estate investment trust receives income
from such person with respect to another property that is
attributable to a lease of such other property to such person
that was in effect as of the later of--
``(I) January 1, 1999, or
``(II) the earliest date that any taxable REIT subsidiary
of such trust entered into a management agreement or other
similar service contract with such person with respect to
such qualified lodging facility or qualified health care
property.''.
(c) Taxable Reit Subsidiaries.--The last sentence of
section 856(l)(3) is amended--
(1) by inserting ``or a health care facility'' after ``a
lodging facility'', and
(2) by inserting ``or health care facility'' after ``such
lodging facility''.
PART 5--EFFECTIVE DATES
SEC. 732. EFFECTIVE DATES.
(a) In General.--Except as otherwise provided in this
section, the amendments made
[[Page H3278]]
by this subtitle shall apply to taxable years beginning after
the date of the enactment of this Act.
(b) REIT Income Tests.--
(1) The amendment made by section 721(a) and (b) shall
apply to gains and items of income recognized after the date
of the enactment of this Act.
(2) The amendment made by section 721(c) shall apply to
transactions entered into after the date of the enactment of
this Act.
(3) The amendment made by section 721(d) shall apply after
the date of the enactment of this Act.
(c) Conforming Foreign Currency Revisions.--
(1) The amendment made by section 723(a) shall apply to
gains recognized after the date of the enactment of this Act.
(2) The amendment made by section 723(b) shall apply to
gains and deductions recognized after the date of the
enactment of this Act.
(d) Dealer Sales.--The amendments made by part 3 shall
apply to sales made after the date of the enactment of this
Act.
Subtitle C--Revenue Provisions
SEC. 741. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES
TRANSACTIONS.
(a) In General.--
(1) Broker reporting for securities transactions.--Section
6045 (relating to returns of brokers) is amended by adding at
the end the following new subsection:
``(g) Additional Information Required in the Case of
Securities Transactions, etc.--
``(1) In general.--If a broker is otherwise required to
make a return under subsection (a) with respect to the gross
proceeds of the sale of a covered security, the broker shall
include in such return the information described in paragraph
(2).
``(2) Additional information required.--
``(A) In general.--The information required under paragraph
(1) to be shown on a return with respect to a covered
security of a customer shall include the customer's adjusted
basis in such security and whether any gain or loss with
respect to such security is long-term or short-term (within
the meaning of section 1222).
``(B) Determination of adjusted basis.--For purposes of
subparagraph (A)--
``(i) In general.--The customer's adjusted basis shall be
determined--
``(I) in the case of any security (other than any stock for
which an average basis method is permissible under section
1012), in accordance with the first-in first-out method
unless the customer notifies the broker by means of making an
adequate identification of the stock sold or transferred, and
``(II) in the case of any stock for which an average basis
method is permissible under section 1012, in accordance with
the broker's default method unless the customer notifies the
broker that he elects another acceptable method under section
1012 with respect to the account in which such stock is held.
``(ii) Exception for wash sales.--Except as otherwise
provided by the Secretary, the customer's adjusted basis
shall be determined without regard to section 1091 (relating
to loss from wash sales of stock or securities) unless the
transactions occur in the same account with respect to
identical securities.
``(3) Covered security.--For purposes of this subsection--
``(A) In general.--The term `covered security' means any
specified security acquired on or after the applicable date
if such security--
``(i) was acquired through a transaction in the account in
which such security is held, or
``(ii) was transferred to such account from an account in
which such security was a covered security, but only if the
broker received a statement under section 6045A with respect
to the transfer.
``(B) Specified security.--The term `specified security'
means--
``(i) any share of stock in a corporation,
``(ii) any note, bond, debenture, or other evidence of
indebtedness,
``(iii) any commodity, or contract or derivative with
respect to such commodity, if the Secretary determines that
adjusted basis reporting is appropriate for purposes of this
subsection, and
``(iv) any other financial instrument with respect to which
the Secretary determines that adjusted basis reporting is
appropriate for purposes of this subsection.
``(C) Applicable date.--The term `applicable date' means--
``(i) January 1, 2010, in the case of any specified
security which is stock in a corporation (other than any
stock described in clause (ii)),
``(ii) January 1, 2011, in the case of any stock for which
an average basis method is permissible under section 1012,
and
``(iii) January 1, 2012, or such later date determined by
the Secretary in the case of any other specified security.
``(4) Treatment of s corporations.--In the case of the sale
of a covered security acquired by an S corporation (other
than a financial institution) after December 31, 2011, such S
corporation shall be treated in the same manner as a
partnership for purposes of this section.
``(5) Special rules for short sales.--In the case of a
short sale, reporting under this section shall be made for
the year in which such sale is closed.''.
(2) Broker information required with respect to options.--
Section 6045, as amended by subsection (a), is amended by
adding at the end the following new subsection:
``(h) Application to Options on Securities.--
``(1) Exercise of option.--For purposes of this section, if
a covered security is acquired or disposed of pursuant to the
exercise of an option that was granted or acquired in the
same account as the covered security, the amount received
with respect to the grant or paid with respect to the
acquisition of such option shall be treated as an adjustment
to gross proceeds or as an adjustment to basis, as the case
may be.
``(2) Lapse or closing transaction.--In the case of the
lapse (or closing transaction (as defined in section
1234(b)(2)(A))) of an option on a specified security or the
exercise of a cash-settled option on a specified security,
reporting under subsections (a) and (g) with respect to such
option shall be made for the calendar year which includes the
date of such lapse, closing transaction, or exercise.
``(3) Prospective application.--Paragraphs (1) and (2)
shall not apply to any option which is granted or acquired
before January 1, 2012.
``(4) Definitions.--For purposes of this subsection, the
terms `covered security' and `specified security' shall have
the meanings given such terms in subsection (g)(3).''.
(3) Extension of period for statements sent to customers.--
(A) In general.--Subsection (b) of section 6045 is amended
by striking ``January 31'' and inserting ``February 15''.
(B) Statements related to substitute payments.--Subsection
(d) of section 6045 is amended--
(i) by striking ``at such time and'', and
(ii) by inserting after ``other item.'' the following new
sentence: ``The written statement required under the
preceding sentence shall be furnished on or before February
15 of the year following the calendar year in which the
payment was made.''.
(C) Other statements.--Subsection (b) of section 6045 is
amended by adding at the end the following: ``In the case of
a consolidated reporting statement (as defined in
regulations) with respect to any account, any statement which
would otherwise be required to be furnished on or before
January 31 of a calendar year with respect to any item
reportable to the taxpayer shall instead be required to be
furnished on or before February 15 of such calendar year if
furnished with such consolidated reporting statement.''.
(b) Determination of Basis of Certain Securities on Account
by Account or Average Basis Method.--Section 1012 (relating
to basis of property-cost) is amended--
(1) by striking ``The basis of property'' and inserting the
following:
``(a) In General.--The basis of property'',
(2) by striking ``The cost of real property'' and inserting
the following:
``(b) Special Rule for Apportioned Real Estate Taxes.--The
cost of real property'', and
(3) by adding at the end the following new subsections:
``(c) Determinations by Account.--
``(1) In general.--In the case of the sale, exchange, or
other disposition of a specified security on or after the
applicable date, the conventions prescribed by regulations
under this section shall be applied on an account by account
basis.
``(2) Application to open-end funds.--
``(A) In general.--Except as provided in subparagraph (B),
any stock in an open-end fund acquired before January 1,
2011, shall be treated as a separate account from any such
stock acquired on or after such date.
``(B) Election by open-end fund for treatment as single
account.--If an open-end fund elects to have this
subparagraph apply with respect to one or more of its
stockholders--
``(i) subparagraph (A) shall not apply with respect to any
stock in such fund held by such stockholders, and
``(ii) all stock in such fund which is held by such
stockholders shall be treated as covered securities described
in section 6045(g)(3) without regard to the date of the
acquisition of such stock.
A rule similar to the rule of the preceding sentence shall
apply with respect to a broker holding stock in an open-end
fund as a nominee.
``(3) Definitions.--For purposes of this section--
``(A) Open-end fund.--The term `open-end fund' means a
regulated investment company (as defined in section 851)
which is offering for sale or has outstanding any redeemable
security of which it is the issuer. Any stock which is traded
on an established securities exchange shall not be treated as
stock in an open-end fund.
``(B) Specified security; applicable date.--The terms
`specified security' and `applicable date' shall have the
meaning given such terms in section 6045(g).
``(d) Average Basis for Stock Acquired Pursuant to a
Dividend Reinvestment Plan.--
``(1) In general.--In the case of any stock acquired after
December 31, 2010, in connection with a dividend reinvestment
plan, the basis of such stock while held as part of such plan
shall be determined using one of the methods which may be
used for determining the basis of stock in an open-end fund.
``(2) Treatment after transfer.--In the case of the
transfer to another account of stock to which paragraph (1)
applies, such stock shall have a cost basis in such other
[[Page H3279]]
account equal to its basis in the dividend reinvestment plan
immediately before such transfer (properly adjusted for any
fees or other charges taken into account in connection with
such transfer).
``(3) Separate accounts; election for treatment as single
account.--Rules similar to the rules of subsection (c)(2)
shall apply for purposes of this subsection.
``(4) Dividend reinvestment plan.--For purposes of this
subsection--
``(A) In general.--The term `dividend reinvestment plan'
means any arrangement under which dividends on any stock are
reinvested in stock identical to the stock with respect to
which the dividends are paid.
``(B) Initial stock acquisition treated as acquired in
connection with plan.--Stock shall be treated as acquired in
connection with a dividend reinvestment plan if such stock is
acquired pursuant to such plan or if the dividends paid on
such stock are subject to such plan.''.
(c) Information by Transferors To Aid Brokers.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 is amended by inserting after section 6045 the
following new section:
``SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH
TRANSFERS OF COVERED SECURITIES TO BROKERS.
``(a) Furnishing of Information.--Every applicable person
which transfers to a broker (as defined in section
6045(c)(1)) a security which is a covered security (as
defined in section 6045(g)(3)) in the hands of such
applicable person shall furnish to such broker a written
statement in such manner and setting forth such information
as the Secretary may by regulations prescribe for purposes of
enabling such broker to meet the requirements of section
6045(g).
``(b) Applicable Person.--For purposes of subsection (a),
the term `applicable person' means--
``(1) any broker (as defined in section 6045(c)(1)), and
``(2) any other person as provided by the Secretary in
regulations.
``(c) Time for Furnishing Statement.--Except as otherwise
provided by the Secretary, any statement required by
subsection (a) shall be furnished not later than 15 days
after the date of the transfer described in such
subsection.''.
(2) Assessable penalties.--Paragraph (2) of section 6724(d)
(defining payee statement) is amended by redesignating
subparagraphs (I) through (CC) as subparagraphs (J) through
(DD), respectively, and by inserting after subparagraph (H)
the following new subparagraph:
``(I) section 6045A (relating to information required in
connection with transfers of covered securities to
brokers),''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61 is amended by
inserting after the item relating to section 6045 the
following new item:
``Sec. 6045A. Information required in connection with transfers of
covered securities to brokers.''.
(d) Additional Issuer Information To Aid Brokers.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61, as amended by subsection (b), is amended by
inserting after section 6045A the following new section:
``SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF
SPECIFIED SECURITIES.
``(a) In General.--According to the forms or regulations
prescribed by the Secretary, any issuer of a specified
security shall make a return setting forth--
``(1) a description of any organizational action which
affects the basis of such specified security of such issuer,
``(2) the quantitative effect on the basis of such
specified security resulting from such action, and
``(3) such other information as the Secretary may
prescribe.
``(b) Time for Filing Return.--Any return required by
subsection (a) shall be filed not later than the earlier of--
``(1) 45 days after the date of the action described in
subsection (a), or
``(2) January 15 of the year following the calendar year
during which such action occurred.
``(c) Statements To Be Furnished to Holders of Specified
Securities or Their Nominees.--According to the forms or
regulations prescribed by the Secretary, every person
required to make a return under subsection (a) with respect
to a specified security shall furnish to the nominee with
respect to the specified security (or certificate holder if
there is no nominee) a written statement showing--
``(1) the name, address, and phone number of the
information contact of the person required to make such
return,
``(2) the information required to be shown on such return
with respect to such security, and
``(3) such other information as the Secretary may
prescribe.
The written statement required under the preceding sentence
shall be furnished to the holder on or before January 15 of
the year following the calendar year during which the action
described in subsection (a) occurred.
``(d) Specified Security.--For purposes of this section,
the term `specified security' has the meaning given such term
by section 6045(g)(3)(B). No return shall be required under
this section with respect to actions described in subsection
(a) with respect to a specified security which occur before
the applicable date (as defined in section 6045(g)(3)(C))
with respect to such security.
``(e) Public Reporting in Lieu of Return.--The Secretary
may waive the requirements under subsections (a) and (c) with
respect to a specified security, if the person required to
make the return under subsection (a) makes publicly
available, in such form and manner as the Secretary
determines necessary to carry out the purposes of this
section--
``(1) the name, address, phone number, and email address of
the information contact of such person, and
``(2) the information described in paragraphs (1), (2), and
(3) of subsection (a).''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1) of such Code
(defining information return) is amended by redesignating
clause (iv) and each of the clauses which follow as clauses
(v) through (xxii), respectively, and by inserting after
clause (iii) the following new clause:
``(iv) section 6045B(a) (relating to returns relating to
actions affecting basis of specified securities),''.
(B) Paragraph (2) of section 6724(d) of such Code (defining
payee statement), as amended by subsection (c)(2), is amended
by redesignating subparagraphs (J) through (DD) as
subparagraphs (K) through (EE), respectively, and by
inserting after subparagraph (I) the following new
subparagraph:
``(J) subsections (c) and (e) of section 6045B (relating to
returns relating to actions affecting basis of specified
securities),''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61 of such Code, as
amended by subsection (b)(3), is amended by inserting after
the item relating to section 6045A the following new item:
``Sec. 6045B. Returns relating to actions affecting basis of specified
securities.''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on January 1, 2010.
(2) Extension of period for statements sent to customers.--
The amendments made by subsection (a)(3) shall apply to
statements required to be furnished after December 31, 2008.
SEC. 742. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF
INTEREST.
(a) In General.--Paragraphs (5)(D) and (6) of section
864(f) are each amended by striking ``December 31, 2008'' and
inserting ``December 31, 2009''.
(b) Transitional Rule.--Subsection (f) of section 864 is
amended by adding at the end the following new paragraph:
``(7) Transition.--In the case of the first taxable year to
which this subsection applies, the increase (if any) in the
amount of the interest expense allocable to sources within
the United States by reason of the application of this
subsection shall be 78 percent of the amount of such increase
determined without regard to this paragraph.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.
SEC. 743. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
(a) Repeal of Adjustment for 2012.--Subparagraph (B) of
section 401(1) of the Tax Increase Prevention and
Reconciliation Act of 2005 is amended by striking the
percentage contained therein and inserting ``100 percent''.
(b) Modification of Adjustment for 2013.--The percentage
under subparagraph (C) of section 401(1) of the Tax Increase
Prevention and Reconciliation Act of 2005 in effect on the
date of the enactment of this Act is increased by 13
percentage points.
Subtitle D--Coordination of Federal Housing Programs and Tax Incentives
for Housing
SEC. 751. SHORT TITLE.
This subtitle may be cited as the ``Housing Tax Credit
Coordination Act of 2008''.
SEC. 752. APPROVALS BY DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT.
(a) Administrative and Procedural Changes.--
(1) In general.--The Secretary of Housing and Urban
Development (in this section referred to as the
``Secretary'') shall, not later than the expiration of the 6-
month period beginning upon after the date of the enactment
of this Act, implement administrative and procedural changes
to expedite approval of multifamily housing projects under
the jurisdiction of the Department of Housing and Urban
Development that meet the requirements of the Secretary for
such approvals.
(2) Projects.--The multifamily housing projects referred to
in paragraph (1) shall include--
(A) projects for which assistance is provided by such
Department in conjunction with any low-income housing tax
credits under section 42 of the Internal Revenue Code of 1986
or tax-exempt housing bonds; and
(B) existing public housing projects and assisted housing
projects, for which approval of the Secretary is necessary
for transactions, in conjunction with any such low-income
housing tax credits or tax-exempt housing bonds, involving
the preservation or rehabilitation of the project.
(3) Changes.--The administrative and procedural changes
referred to in paragraph (1)
[[Page H3280]]
shall include all actions necessary to carry out paragraph
(1), which may include--
(A) improving the efficiency of approval procedures;
(B) simplifying approval requirements,
(C) establishing time deadlines or target deadlines for
required approvals;
(D) modifying division of approval authority between field
and national offices;
(E) improving outreach to project sponsors regarding
information that is required to be submitted for such
approvals;
(F) requesting additional funding for increasing staff, if
necessary; and
(G) any other actions which would expedite approvals.
Any such changes shall be made in a manner that provides for
full compliance with any existing requirements under law or
regulation that are designed to protect families receiving
public and assisted housing assistance, including income
targeting, rent, and fair housing provisions, and shall also
comply with requirements regarding environmental review and
protection and wages paid to laborers.
(b) Consultation.--The Secretary shall consult with the
Commissioner of the Internal Revenue Service and take such
actions as are appropriate in conjunction with such
consultation to simplify the coordination of rules,
regulations, forms, and approval requirements for multifamily
housing projects projects for which assistance is provided by
such Department in conjunction with any low-income housing
tax credits under section 42 of the Internal Revenue Code of
1986 or tax-exempt housing bonds.
(c) Recommendations.--In implementing the changes required
under this section, the Secretary shall solicit
recommendations regarding such changes from project owners
and sponsors, investors and stakeholders in housing tax
credits, State and local housing finance agencies, public
housing agencies, tenant advocates, and other stakeholders in
such projects.
(d) Report.--Not later than the expiration of the 9-month
period beginning on the date of the enactment of this Act,
the Secretary shall submit a report to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate that--
(1) identifies the actions taken by the Secretary to comply
with this section;
(2) includes information regarding any resulting
improvements in the expedited approval for multifamily
housing projects;
(3) identifies recommendations made pursuant to subsection
(c);
(4) identifies actions taken by the Secretary to implement
the provisions in the amendments made by sections 4 and 5 of
this Act; and
(5) makes recommendations for any legislative changes that
are needed to facilitate prompt approval of assistance for
such projects.
SEC. 753. PROJECT APPROVALS BY RURAL HOUSING SERVICE.
Section 515(h) of the Housing Act of 1949 (42 U.S.C. 1485)
is amended--
(1) by inserting ``(1) Condition.--'' after ``(h)''; and
(2) by adding at the end the following new paragraphs:
``(2) Actions to Expedite Project Approvals.--
``(A) In general.--The Secretary shall take actions to
facilitate timely approval of requests to transfer ownership
or control, for the purpose of rehabilitation or
preservation, of multifamily housing projects for which
assistance is provided by the Secretary of Agriculture in
conjunction with any low-income housing tax credits under
section 42 of the Internal Revenue Code of 1986 or tax-exempt
housing bonds.
``(B) Consultation.--The Secretary of Agriculture shall
consult with the Commissioner of the Internal Revenue Service
and take such actions as are appropriate in conjunction with
such consultation to simplify the coordination of rules,
regulations, forms (including applications forms for project
transfers), and approval requirements multifamily housing
projects for which assistance is provided by the Secretary of
Agriculture in conjunction with any low-income housing tax
credits under section 42 of the Internal Revenue Code of 1986
or tax-exempt housing bonds.
``(C) Existing requirements.--Any actions taken pursuant to
this paragraph shall be taken in a manner that provides for
full compliance with any existing requirements under law or
regulation that are designed to protect families receiving
Federal housing assistance, including income targeting, rent,
and fair housing provisions, and shall also comply with
requirements regarding environmental review and protection
and wages paid to laborers.
``(D) Recommendations.--In implementing the changes
required under this paragraph, the Secretary shall solicit
recommendations regarding such changes from project owners
and sponsors, investors and stakeholders in housing tax
credits, State and local housing finance agencies, tenant
advocates, and other stakeholders in such projects.''.
SEC. 754. USE OF FHA LOANS WITH HOUSING TAX CREDITS.
(a) Subsidy Layering Requirements.--Subsection (d) of
section 102 of the Department of Housing and Urban
Development Reform Act of 1989 (42 U.S.C. 3545(d)) is
amended--
(1) in the first sentence, by inserting after ``assistance
within the jurisdiction of the Department'' the following:
``, as such term is defined in subsection (m), except that
for purposes of this subsection such term shall not include
any mortgage insurance provided pursuant to title II of the
National Housing Act (12 U.S.C. 1707 et seq.)''; and
(2) in the second sentence, by inserting ``such'' before
``assistance''.
(b) Cost Certification.--Section 227 of National Housing
Act (12 U.S.C. 1715r) is amended--
(1) in the matter preceding paragraph (a) (relating to a
definition of ``new or rehabilitated multifamily housing'')--
(A) in the first sentence--
(i) by striking ``Notwithstanding'' and inserting ``Except
as provided in subsection (b) and notwithstanding''; and
(ii) by redesignating clauses (a) and (b) as clauses (A)
and (B), respectively; and
(B) by striking ``As used in this section--'';
(2) in paragraph (c) (relating to a definition of ``actual
cost'')--
(A) in clause (i), by redesignating clauses (1) and (2) as
clauses (I) and (II), respectively; and
(B) in clause (ii), by redesignating clauses (1) and (2) as
clauses (I) and (II), respectively;
(3) by redesignating paragraphs (a), (b), and (c) as
paragraphs (1), (2), and (3), respectively;
(4) by inserting before paragraph (1) (as so redesignated
by paragraph (3) of this subsection) the following:
``(b) Exemption for Certain Projects Assisted With Low-
Income Housing Tax Credit.--In the case of any mortgage
insured under any provision of this title that is executed in
connection with the construction, rehabilitation, purchase,
or refinancing of a multifamily housing project for which
equity provided through any low-income housing tax credit
pursuant to Section 42 of the Internal Revenue Code of 1986
(26 U.S.C. 42), if the Secretary determines at the time of
issuance of the firm commitment for insurance that the ratio
of the loan proceeds to the actual cost of the project is
less than 80 percent, subsection (a) of this section shall
not apply.
``(c) Definitions.--For purposes of this section, the
following definitions shall apply:''; and
(5) by inserting ``(a) Requirement.--'' after ``227.''.
(c) Other Provisions Regarding Treatment of Mortgages
Covering Tax Credit Projects.--Title II of the National
Housing Act is amended by inserting after section 227 (12
U.S.C. 1715r) the following new section:
``SEC. 228. TREATMENT OF MORTGAGES COVERING TAX CREDIT
PROJECTS.
``(a) Definition.--For purposes of this section, the term
`insured mortgage covering a tax credit project' means a
mortgage insured under any provision of this title that is
executed in connection with the construction, rehabilitation,
purchase, or refinancing of a multifamily housing project for
which equity provided through any low-income housing tax
credit pursuant to section 42 of the Internal Revenue Code of
1986 (26 U.S.C. 42).
``(b) Acceptance of Letters of Credit.--In the case of an
insured mortgage covering a tax credit project, the Secretary
may not require the escrowing of equity provided by the sale
of any low-income housing tax credits for the project
pursuant to Section 42 of the Internal Revenue Code of 1986,
or any other form of security, such as a letter of credit.
``(c) Asset Management Requirements.--In the case of an
insured mortgage covering a tax credit project for which
project the applicable tax credit allocating agency is
causing to be performed periodic inspections in compliance
with the requirements of section 42 of the Internal Revenue
Code of 1986, such project shall be exempt from requirements
imposed by the Secretary regarding periodic inspections of
the property by the mortgagee. To the extent that other
compliance monitoring is being performed with respect to such
a project by such an allocating agency pursuant to such
section 42, the Secretary shall, to the extent that the
Secretary determines such monitoring is sufficient to ensure
compliance with any requirements established by the
Secretary, accept such agency's evidence of compliance for
purposes of determining compliance with the Secretary's
requirements.
``(d) Streamlined Processing Pilot Program.--
``(1) In general.--The Secretary shall establish a pilot
program to demonstrate the effectiveness of streamlining the
review process, which shall include all applications for
mortgage insurance under any provision of this title for
mortgages executed in connection with the construction,
rehabilitation, purchase, or refinancing of a multifamily
housing project for which equity provided through any low-
income housing tax credit pursuant to section 42 of the
Internal Revenue Code of 1986. The Secretary shall issue
instructions for implementing the pilot program under this
subsection not later than the expiration of the 180-day
period beginning upon the date of the enactment of the
Housing Tax Credit Coordination Act of 2008.
``(2) Requirements.--Such pilot program shall provide for--
``(A) the Secretary to appoint designated underwriters, who
shall be responsible for reviewing such mortgage insurance
applications and making determinations regarding the
eligibility of such applications for such mortgage insurance
in lieu of the processing functions regarding such
applications that are otherwise performed by other employees
[[Page H3281]]
of the Department of Housing and Urban Development;
``(B) submission of applications for such mortgage
insurance by mortgagees who have previously been expressly
approved by the Secretary; and
``(C) determinations regarding the eligibility of such
applications for such mortgage insurance to be made by the
chief underwriter pursuant to requirements prescribed by the
Secretary, which shall include requiring submission of
reports regarding applications of proposed mortgagees by
third-party entities expressly approved by the chief
underwriter.''.
SEC. 755. OTHER HUD PROGRAMS.
(a) Section 8 Assistance.--
(1) PHA project-based assistance.--Section 8(o)(13) of the
United States Housing Act of 1937 (42 U.S.C. 1437f(o)(13)) is
amended--
(A) in subparagraph (D)(i)--
(i) by striking ``building'' and inserting ``project''; and
(ii) by adding at the end the following: ``For purposes of
this subparagraph, the term `project' means a single
building, multiple contiguous buildings, or multiple
buildings on contiguous parcels of land.'';
(B) in the first sentence of subparagraph (F), by striking
``10 years'' and inserting ``15 years'';
(C) In subparagraph (G)--
(i) by inserting after the period at the end of the first
sentence the following: ``Such contract may, at the election
of the public housing agency and the owner of the structure,
specify that such contract shall be extended for renewal
terms of up to 15 years each, if the agency makes the
determination required by this subparagraph and the owner is
in compliance with the terms of the contract.''; and
(ii) by adding at the end the following: ``A public housing
agency may agree to enter into such a contract at the time it
enters into the initial agreement for a housing assistance
payment contract or at any time thereafter that is before the
expiration of the housing assistance payment contract.'';
(D) in subparagraph (H), by inserting before the period at
the end of the first sentence the following: ``, except that
in the case of a contract unit that has been allocated low-
income housing tax credits and for which the rent limitation
pursuant to such section 42 is less than the amount that
would otherwise be permitted under this subparagraph, the
rent for such unit may, in the sole discretion of a public
housing agency, be established at the higher section 8 rent,
subject only to paragraph (10)(A)'';
(E) in subparagraph (I)(i), by inserting before the
semicolon the following: ``, except that the contract may
provide that the maximum rent permitted for a dwelling unit
shall not be less than the initial rent for the dwelling unit
under the initial housing assistance payments contract
covering the unit''; and
(F) by adding at the end the following new subparagraphs:
``(L) Use in cooperative housing and elevator buildings.--A
public housing agency may enter into a housing assistance
payments contract under this paragraph with respect to--
``(i) dwelling units in cooperative housing; and
``(ii) notwithstanding subsection (c), dwelling units in a
high-rise elevator project, including such a project that is
occupied by families with children, without review and
approval of the contract by the Secretary.
``(M) Reviews.--
``(i) Subsidy layering.--A subsidy layering review in
accordance with section 102(d) of the Department of Housing
and Urban Development Reform Act of 1989 (42 U.S.C. 3545(d))
shall not be required for assistance under this paragraph in
the case of a housing assistance payments contract for an
existing structure, or if a subsidy layering review has been
conducted by the applicable State or local agency.
``(ii) Environmental review.--A public housing agency shall
not be required to undertake any environmental review before
entering into a housing assistance payments contract under
this paragraph for an existing structure, except to the
extent such a review is otherwise required by law or
regulation.''.
(2) Voucher program rent reasonableness.--Section 8(o)(10)
of the United States Housing Act of 1937 (42 U.S.C.
1437f(o)(10)) is amended by adding at the end the following
new subparagraph;
``(F) Tax credit projects.--In the case of a dwelling unit
receiving tax credits pursuant to section 42 of the Internal
Revenue Code of 1986 or for which assistance is provided
under subtitle A of title II of the Cranston Gonzalez
National Affordable Housing Act of 1990, for which a housing
assistance contract not subject to paragraph (13) of this
subsection is established, rent reasonableness shall be
determined as otherwise provided by this paragraph, except
that--
``(i) comparison with rent for units in the private,
unassisted local market shall not be required if the rent is
equal to or less than the rent for other comparable units
receiving such tax credits or assistance in the project that
are not occupied by families assisted with tenant-based
assistance under this subsection; and
``(ii) the rent shall not be considered reasonable for
purposes of this paragraph if it exceeds the greater of--
``(I) the rents charged for other comparable units
receiving such tax credits or assistance in the project that
are not occupied by families assisted with tenant-based
assistance under this subsection; and
``(II) the payment standard established by the public
housing agency for a unit of the size involved.''.
(b) Section 202 Housing for Elderly Persons.--Subsection
(f) of section 202 of the Housing Act of 1959 (12 U.S.C.
1701q(f)) is amended--
(1) by striking ``Selection Criteria.--'' and inserting
``Initial Selection Criteria and Processing.--(1) Selection
criteria.--'';
(2) by redesignating paragraphs (1) through (7) as
subparagraphs (A) through (G), respectively; and
(3) by adding at the end the following new paragraph:
``(2) Delegated Processing.--
``(A) In issuing a capital advance under this subsection
for any project for which financing for the purposes
described in the last two sentences of subsection (b) is
provided by a combination of a capital advance under
subsection (c)(1) and sources other than this section, within
30 days of award of the capital advance, the Secretary shall
delegate review and processing of such projects to a State or
local housing agency that--
``(i) is in geographic proximity to the property;
``(ii) has demonstrated experience in and capacity for
underwriting multifamily housing loans that provide housing
and supportive services;
``(iii) may or may not be providing low-income housing tax
credits in combination with the capital advance under this
section, and
``(iv) agrees to issue a firm commitment within 12 months
of delegation.
``(B) The Secretary shall retain the authority to process
capital advances in cases in which no State or local housing
agency has applied to provide delegated processing pursuant
to this paragraph or no such agency has entered into an
agreement with the Secretary to serve as a delegated
processing agency.
``(C) An agency to which review and processing is delegated
pursuant to subparagraph (A) may assess a reasonable fee
which shall be included in the capital advance amounts and
may recommend project rental assistance amounts in excess of
those initially awarded by the Secretary. The Secretary shall
develop a schedule for reasonable fees under this
subparagraph to be paid to delegated processing agencies,
which shall take into consideration any other fees to be paid
to the agency for other funding provided to the project by
the agency, including bonds, tax credits, and other gap
funding.
``(D) Under such delegated system, the Secretary shall
retain the authority to approve rents and development costs
and to execute a capital advance within 60 days of receipt of
the commitment from the State or local agency. The Secretary
shall provide to such agency and the project sponsor, in
writing, the reasons for any reduction in capital advance
amounts or project rental assistance and such reductions
shall be subject to appeal.''.
(c) McKinney-Vento Act Homeless Assistance Under Shelter
Plus Care Program.--
(1) Term of contracts with owner or lessor.--Part I of
subtitle F of the McKinney-Vento Homeless Assistance Act is
amended--
(A) by redesignating sections 462 and 463 (42 U.S.C.
11403g, 11403h) as sections 463 and 464, respectively;
(B) by striking ``section 463'' each place such term
appears in sections 471, 476, 481, 486, and 488 (42 U.S.C.
11404, 11405, 11406, 11407, and 11407b) and inserting
``section 464''; and
(C) by inserting after section 461 (42 U.S.C. 11403f) the
following new section:
``SEC. 462. TERM OF CONTRACT WITH OWNER OR LESSOR.
``An applicant under this subtitle may enter into a
contract with the owner or lessor of a property that receives
rental assistance under this subtitle having a term of not
more than 15 years, subject to the availability of sufficient
funds provided in appropriation Acts for the purpose of
renewing expiring contracts for assistance payments. Such
contract may, at the election of the applicant and owner or
lessor, specify that such contract shall be extended for
renewal terms of not more than 15 years each, subject to the
availability of sufficient such appropriated funds.''.
(2) Project-based rental assistance contracts.--Section
478(a) of the McKinney-Vento Homeless Assistance Act (42
U.S.C. 11405a(a)) is amended by inserting before the period
at the end the following: ``; except that, in the case of any
project for which equity is provided through any low-income
housing tax credit pursuant to section 42 of the Internal
Revenue Code of 1986 (26 U.S.C. 42), if an expenditure of
such amount for each unit (including the prorated share of
such work) is required to make the structure decent, safe,
and sanitary, and the owner agrees to reach initial closing
on permanent financing from such other sources within two
years and agrees to carry out the rehabilitation with
resources other than assistance under this subtitle within 60
months of notification of grant approval, the contract shall
be for a term of 10 years (except that such period may be
extended by up to 1 year by the Secretary, which extension
shall be granted unless the Secretary determines that the
sponsor is primarily responsible for the failure to meet such
deadline)''.
[[Page H3282]]
(d) Data Collection on Tenants of Housing Tax Credit
Projects.--Title I of the United States Housing Act of 1937
(42 U.S.C. 1437 et seq.) is amended by adding at the end the
following new section:
``SEC. 36. COLLECTION OF INFORMATION ON TENANTS IN TAX CREDIT
PROJECTS.
``(a) In General.--Each State agency administering tax
credits under section 42 of the Internal Revenue Code of 1986
(26 U.S.C. 42) shall furnish to the Secretary of Housing and
Urban Development, not less than annually, information
concerning the race, ethnicity, family composition, age,
income, use of rental assistance under section 8(o) of the
United States Housing Act of 1937 or other similar
assistance, disability status, and monthly rental payments of
households residing in each property receiving such credits
through such agency. Such State agencies shall, to the extent
feasible, collect such information through existing reporting
processes and in a manner that minimizes burdens on property
owners. In the case of any household that continues to reside
in the same dwelling unit, information provided by the
household in a previous year may be used if the information
is of a category that is not subject to change or if
information for the current year is not readily available to
the owner of the property.
``(b) Standards.--The Secretary shall establish standards
and definitions for the information collected under
subsection (a), provide States with technical assistance in
establishing systems to compile and submit such information,
and, in coordination with other Federal agencies
administering housing programs, establish procedures to
minimize duplicative reporting requirements for properties
assisted under multiple housing programs.
``(c) Public Availability.--The Secretary shall, not less
than annually, compile and make publicly available the
information submitted to the Secretary pursuant to subsection
(a).
``(d) Authorization of Appropriations.--There is authorized
to be appropriated for the cost of activities required under
subsections (b) and (c) $2,500,000 for fiscal year 2009 and
$900,000 for each of fiscal years 2010 through 2013.''.
Subtitle E--Limitation on Sale, Foreclosure, or Seizure of Property
Owned by Servicemembers
SEC. 761. LIMITATION ON SALE, FORECLOSURE, OR SEIZURE OF
PROPERTY OWNED BY SERVICEMEMBERS DURING ONE-
YEAR PERIOD FOLLOWING PERIOD OF MILITARY
SERVICE.
(a) Limitation.--Section 303(c) of the Servicemembers Civil
Relief Act is amended by striking ``90 days'' and inserting
``one year''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply with respect to any sale, foreclosure, or seizure
of property on or after the date of the enactment of this
Act.
SEC. 762. PROVISION OF FINANCIAL DISCLOSURE TO SERVICEMEMBERS
WHO DEFAULT ON CERTAIN OBLIGATIONS.
(a) Provision of Disclosure Required.--Section 303 of the
Servicemembers Civil Relief Act (50 U.S.C. App. 533) is
amended by adding at the end the following new subsection:
``(e) Provision of Financial Disclosure.--In the case of a
servicemember who defaults on an obligation described in
subsection (a) for two consecutive months, the mortgagor or
loan servicer of the obligation shall provide to the
servicemember a written financial disclosure describing the
servicemember's liability with respect to the obligation for
the period during which a sale, foreclosure, or seizure of
the property is not valid under subsection (c).''.
(b) Effective Date.--Subsection (e) of section 303 of the
Servicemembers Civil Relief Act (50 U.S.C. App. 533), as
added by subsection (a), shall apply with respect to a
servicemember who defaults on an obligation on or after the
date of the enactment of this Act.
The text of House amendment No. 3 to the Senate amendments is as
follows:
At the end of the matter proposed to be inserted by the
amendment of the Senate to the text of the bill, add the
following new section:
SEC. __. RULE OF CONSTRUCTION.
(a) In General.--No provision of this Act, the Home Owners'
Loan Act, or title LXII of the Revised Statutes of the United
States (commonly referred to as the ``National Bank Act'')
may be construed as preempting the application, to any
entity, of any State law regulating the foreclosure of
residential real property in that State or the treatment of
foreclosed property.
(b) No Negative Implication.--This section shall not be
construed as affecting in any way the applicability of any
other type of State law to any Federal depository institution
(as defined in section 3(c)(4) of the Federal Deposit
Insurance Act) or to any agent or subsidiary of any such
depository institution.
The SPEAKER pro tempore. Pursuant to House Resolution 1175, debate
shall not exceed 3 hours, with 2 hours equally divided and controlled
by the chairman and ranking minority member of the Committee on
Financial Services, and 1 hour equally divided and controlled by the
chairman and ranking minority member of the Committee on Ways and
Means.
The gentleman from Massachusetts (Mr. Frank) and the gentleman from
Alabama (Mr. Bachus) each will control 1 hour; and the gentleman from
Massachusetts (Mr. Neal) and the gentleman from Louisiana (Mr. McCrery)
each will control 30 minutes.
The Chair recognizes the gentleman from Massachusetts (Mr. Neal).
Mr. NEAL of Massachusetts. Mr. Speaker, I yield myself such time as I
might consume.
Mr. Speaker, I want to begin by thanking Mr. Frank. In the 30 years
that I've known him, I've yet to meet anybody who has done a better job
of mastering the most arcane detail of complicated housing policy. In
fact, in some measure, we're here today because of the energy that he's
brought to the task at hand.
Mr. Speaker, I also rise today in support of this housing assistance
tax package which has been reported by the Ways and Means Committee. I
want to thank Chairman Rangel for his leadership on this very important
national issue.
There is little doubt that the sagging housing industry, now at
historic lows, has been a drag on our national economy. This
legislation would stimulate that industry and help families who have
been caught up in this struggling economy.
This legislation provides tax credits for first-time homebuyers, and
it boosts credits for construction of affordable housing. It allows
families to deduct property taxes who couldn't do so before.
{time} 1230
It increases mortgage revenue bonds and it allows the States to
refinance troubled subprime loans.
This assistance is targeted to those who need it most. It will also
help bring economic stability to our communities. And these provisions
are revenue neutral, I emphasize ``revenue neutral,'' using a provision
from the President's own budget to pay for much of the cost.
Mr. Speaker, this bill has been endorsed by the Home Builders, the
Realtors and State Housing Administrators. It passed with the support
of 12 Republican members of the Ways and Means Committee, including my
friend and the distinguished ranking member, Mr. McCrery. It is broadly
supported, it's bipartisan in nature, and I am proud to bring it to
this House today.
There are but two changes to our amendment. One is a package of
technical improvements from the Financial Services Committee to better
coordinate the various housing tax and HUD programs. The other is--and
I hope that everybody will listen to this suggestion--a provision
approved by the Veterans Affairs Committee to extend from 90 days to 1
year the protection against foreclosure for servicemembers returning
from active duty. I can't imagine that there is a voice in this body
who would not be supportive of that initiative, the idea that in
Afghanistan and/or in Iraq, that a servicemember who is doing all
that's asked of him or her every day would find themselves facing
mortgage foreclosure because of their military service.
As chairman of the Select Revenue Measures Subcommittee, again I
stand in strong support of the legislation that's before us today. It
includes a number of improvements to the affordable housing program.
Our subcommittee considered these provisions last summer. And at the
urging of housing officials, developers, and advocates for low-income
families, they have all been included in the Ways and Means amendment
that we consider today. I urge its adoption.
Mr. Speaker, I reserve the balance of my time.
Mr. McCRERY. Mr. Speaker, I yield myself so much time as I may
consume.
Mr. Speaker, it is with regret that I rise to urge my colleagues to
vote against the tax amendment to this bill. Let me be clear, however,
in stating that my opposition to this section is not the result of a
disagreement with my friend, Mr. Neal, or with the chairman of the
committee, Mr. Rangel. We were able to work together so that the
housing bill reported by the Ways and Means Committee enjoyed
bipartisan support.
[[Page H3283]]
And while that package contains many provisions that do make sense, I
think the House should have had the opportunity to consider at least
one alternative. Unfortunately, the procedural straitjacket imposed by
the majority for consideration of the housing bill today is something
that I simply cannot ignore. For that reason, I will be voting against
this amendment.
We all understand the severity of the housing crisis. Housing starts
declined to 680,000 in March of 2008, the lowest level since January of
1991. Since hitting a peak in early 2006, housing starts have dropped
by 62 percent. There is currently a 9\1/2\ month supply of unsold
homes, more than double the 10-year average. With those facts in mind,
it is not surprising that home prices are falling, and the contraction
in the residential real estate market is an anchor around our economy.
The Tax Code didn't get us into this mess, and there is only so much
the Tax Code can do to get us out. The package approved by the
Committee on Ways and Means contains many well-designed improvements,
including improvements to make the low-income housing tax credit more
efficient. I also think allowing those credits to be claimed against
both the regular tax and the AMT is a step in the right direction.
The language expanding the Mortgage Revenue Bond program and allowing
proceeds of the bonds to be used to refinance existing home mortgages,
as suggested by the President, is certainly worth doing. And although I
have some reservations about the design of the first-time homebuyer's
tax credit, the recapture provision, if we include it, makes it more
like a no-interest loan and not really a tax credit.
Still, I share the hope of the sponsors that this provision will help
induce some home purchases this year and stabilize the market. We
desire that because we recognize that potential homebuyers right now
are reading the headlines every day, they're waiting on the sidelines
to get to the bottom of the market. Well, as prices keep falling, more
people who might think about buying a home decide to keep waiting, and
so that creates a self-perpetuating cycle of declining home prices.
Maybe, just maybe, this tax credit could induce some of those waiting
on the sidelines to go ahead, jump in and buy a home. That's our
desire. I think it could have been better, as I say, designed as a pure
tax credit with no recapture provision, but still, I think it's better
than nothing.
I understand the concern raised by some that an artificial temporary
floor, so to speak, will not restore long-term stability to the housing
market and could even result in further price declines when the
temporary benefit lapses. But on balance, I think this provision holds
some hope of helping us to reverse this slide in housing prices, or at
least stop it for a while and give it a chance to recover.
At the same time, there are elements of this package that, frankly, I
would prefer not be in here. Given the nature of the housing crisis, I
think the House should follow the Senate's lead and waive PAYGO, for
example. I think this is an emergency. We shouldn't be responding to
this emergency situation with tax increases.
And there are specific items in here that if it were up to me might
not have made the cut. But democracy is about compromise, and the bill
produced by the Ways and Means Committee was something that I supported
and would like to vote for again here on the House floor today. But the
decision made by the majority leadership to debate this legislation as
an amendment to a Senate-passed bill deprives the House of the chance
to consider ways to improve it, even to the extent of denying the
minority a motion to recommit.
Now, I recognize that tax bills traditionally come to the floor under
restrictive rules, and I support that. But as I documented in a letter
last year to the distinguished chairwoman of the Rules Committee, in
years when Republicans were in the majority, on one tax bill after
another the Republican majority offered the Democratic minority not
only a motion to recommit, but a substitute.
Mr. Speaker, at this time, I would like to insert the text of that
letter to the chairwoman of the Rules Committee into the Congressional
Record.
House of Representatives,
Committee on Ways and Means,
Washington, DC, August 1, 2007.
Chairwoman Louise McIntosh Slaughter,
Committee on Rules, House of Representatives, The Capitol,
Washington, DC.
Ranking Member David Dreier,
Committee on Rules, House of Representatives, Longworth
Building, Washington, DC.
Dear Chairwoman Slaughter and Ranking Member Dreier: This
week the House is expected to consider H.R. 2776, the
``Renewable Energy and Energy Conservation Act of 2007.''
This will be the first tax bill, reported by the Ways and
Means Committee, to be considered under a rule in the 110th
Congress. As you are aware, the House has a long history of
supporting rules for tax bills which make in order an
amendment in the nature of a substitute. Numerous examples,
dating back to the 104th Congress, include:
1. Death Tax Repeal Permanency Act of 2005;
2. Tax Increase Prevention and Reconciliation Act of 2005;
3. Charitable Giving Act of 2003;
4. Death Tax Repeal Permanency Act of 2003;
5. Social Security Protection Act of 2003;
6. Pension Security Act of 2003;
7. Tax Administration Good Government Act;
8. A bill to extend permanently the marriage penalty relief
provided under the Economic Growth and Tax Relief
Reconciliation Act of 2001;
9. Middle-Class Alternative Minimum Tax Relief Act of 2004:
10. A bill to permanently extend the ten percent individual
income tax bracket;
11. Child Credit Preservation and Expansion Act of 2004;
12. Economic Growth and Tax Relief Act of 2001;
13. Marriage Penalty and Family Tax Relief Act of 2001;
14. Care Act of 2002;
15. Death Tax Elimination Act of 2001;
16. Economic Growth and Tax Relief Reconciliation Act of
2001;
17. Permanent Death Tax Repeal Act of 2002;
18. Job Creation and Worker Assistance Act of 2002;
19. Pension Security Act of 2002;
20. The WORK Act of 2002;
21. Retirement Savings Security Act of 2002;
22. Marriage Tax Penalty Relief Act of 2000;
23. Death Tax Elimination Act of 2000;
24. Retirement Security and Savings Act of 2000;
25. Foster Care Independence Act of 1999;
26. Financial Freedom Act of 1999;
27. Fathers Count Act of 1999;
28. Marriage Tax Relief Reconciliation Act of 2000;
29. Social Security Benefits Tax Relief Act of 2000;
30. Education Savings and School Excellence Act of 1998;
31. Taxpayer Relief Act of 1998;
32. Job Creation and Wage Enhancement Act of 1995;
33. A bill to permanently extend the deduction for the
health insurance costs of self-employed individuals, and for
other purposes;
34. Tax Fairness and Deficit Reduction Act of 1995; and,
35. Health Insurance Portability and Accountability Act of
1996.
While the usual practice has been to provide for the
consideration of an amendment in the nature of a substitute,
I recognize that there have been instances where such
consideration was not allowed under the rule. In many of
these cases, the amendment was either non-germane to the
underlying bill, was not an actual substitute amendment, or
was not compliant with the Budget Act.
I have submitted an amendment in the nature of a substitute
to H. R. 2776. According to the Joint Committee on Taxation,
the amendment complies with Clause 10 of House Rule 21,
otherwise known as the ``paygo rule.'' In addition, through
consultations with the Office of the Parliamentarian, I am
assured that the amendment is germane to H.R. 2776. To my
knowledge, it would violate no rules of the House.
I hope that the Committee will make in order my amendment
as part of the consideration of H.R. 2776. Please do not
hesitate to contact me if you have any questions.
With kindest regards, I am
Sincerely yours,
Jim McCrery,
Ranking Member.
At the same time, I recognize that it is not uncommon to resolve
differences between the House and the Senate by sending amendments back
and forth across the Capitol. That's what's being done today. But what
makes today's procedure so unusual, and to some of us so frustrating,
is that this House never had a chance to work its will on housing
legislation. This is not a housing bill that went to the Senate, was
amended, and then sent back to us. This was an energy bill for heaven's
sake. It was gutted in the Senate, replaced with housing provisions,
sent back to us, and that is what has created this unusual opportunity
for the
[[Page H3284]]
majority to deny the minority even a motion to recommit, and it's
wrong.
So Mr. Speaker, I think that action reflects poorly on this House.
It's a trampling of the rights of all of our Members, not just the
minority. And I, therefore, plan to vote against all of these
amendments and urge my colleagues to do the same until we can get a
fair hearing, a fair rule governing the debate of these very important
matters.
With that, Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I ask unanimous consent at this time to allow the
gentleman from New York (Mr. Reynolds), a member of the Ways and Means
Committee, to control the remainder of time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Louisiana?
There was no objection.
Mr. NEAL of Massachusetts. Mr. Speaker, I do offer some
acknowledgement of the constraints that we find ourselves within today
on the House floor, and I think there's some accuracy as to what Mr.
McCrery had to say. However, there is another very important point, and
that is, that the issues were vetted at the committee level and there
was ample opportunity and a full and vigorous debate ensued in the Ways
and Means Committee in which every opinion was welcomed.
With that, I would like to yield 2 minutes to the gentleman from
Michigan (Mr. Levin).
Mr. LEVIN. I rise in strong support.
There has been some bipartisanship that has motored this legislation,
and I hope it won't break down today.
The crisis in housing needs the attention and the support of
everybody. It needs much more than tea and sympathy, it needs
legislation. Recently I met with mayors and managers from the 12th
District, in Macomb County and southeast Oakland. And they all talked
about the plight of the homeowner, the plight of the communities when
houses are shut down. We have to act. And I pay tribute, all of us
should, to the Committee on Financial Services.
And let me say just a word about the tax provisions. They would
provide credit to first-time homebuyers. Essential. It would improve
access to low-income housing. Essential. It would allow families to
deduct property taxes through the standard deduction. It's a good
experiment. It should have been done earlier. And it also would allow
Federal home loan banks to help relieve pressure on credit markets.
I read the Statement of Administrative Policy that said it was risky
and it was an expansion of the purpose of the banks, and I think it's
incorrect in both respects. So I just want to close with the sense of
urgency that I think all of us feel. Mr. Bernanke said that if markets
were simply allowed to follow their own course, it could ``destabilize
communities, reduce the property values of nearby homes and lower
municipal tax revenues.''
What more do we need to impel us to act than the flight of families,
the plight of communities, and the plight of municipalities? Let's vote
on a bipartisan bill. Let's vote for this bill.
Mr. REYNOLDS. Mr. Speaker, it is now my pleasure to yield 3 minutes
to the distinguished senior member of the Republican side of Ways and
Means, Wally Herger of California.
Mr. HERGER. Mr. Speaker, I'm troubled by the housing catch-all bill
before the House of Representatives today from a commonsense, pro-
American taxpayer position.
The bill would enable the already troubled FHA to take on an
additional $300 million in distressed mortgage liabilities, loans that
have a good chance of going into default. This effectively transfers
risk from those holding bad loans to those taxpayers who made prudent
decisions in the first place.
More than nine out of 10 mortgage holders make payments on time. They
would now be on the hook for the bad mortgage debt, as will renters
saving for a first-time home and those who own their own homes
outright. This bill sends the signal that there are no real
consequences for poor lending or borrowing practices, and encourages
more of the same behavior that led us here in the first place.
Further, to offset some of the tax giveaways in the bill, the
Democrat majority proposes billions of dollars in what amounts to a
retroactive tax increase on American employers with operations in
foreign markets. What our economy really needs is tax policies that
foster greater, not less, competitiveness for the U.S. employers.
Finally, it is truly disappointing that the Democrat majority has
chosen to bring this bill up in a lock down, unamendable manner. I urge
my colleagues to reject this measure.
Mr. NEAL of Massachusetts. Mr. Speaker, I would remind the audience,
including the Members that are on the floor, that this procedure was
fully vetted in the Ways and Means Committee. It passed 35-5. That
means we picked up 12 members of the minority who supported this
legislation.
With that, I would like to yield 2 minutes to my friend, the
distinguished gentleman from New Jersey (Mr. Pascrell).
Mr. PASCRELL. Mr. Speaker, you can't have it both ways. You can't say
that this is an emergency and we've got to get something done, and then
in the other breath say let's go through the technical procedures.
They're contradictory.
This bill was vetted. And housing inventories in our communities
continue to increase and home prices continue to decline. We need to
incentivize Americans to reenter the housing market. It affects so much
of our economy. I think this amendment, this bill takes giant leaps
towards accomplishing this goal. I applaud Mr. Rangel for his efforts
and the 12 Members from the distinguished opposition who joined.
There is an array of good work here, but in particular I'm heartened
that included within is a tax benefit for most first-time homebuyers.
This is a truly meaningful incentive, and one that will pull out a
large swath of people from the sidelines and back into the market,
having a ripple effect throughout the rest of the economy. After all,
without bold action to spur housing market activity, inventories across
the country may continue to grow, placing downward pressure on home
prices and wiping out equity that so many Americans have worked so hard
to build.
{time} 1245
We don't want more homes to be in that situation. We prove nothing.
There is a place for the Federal Government, therefore, in this
terrible situation that has occurred and developed over the last year.
This bill, when passed, will allow middle class families to receive a
tax benefit that is equivalent to an interest-free loan of $7,000
towards the purchase of their first home. It will also allow existing
homeowners who claim the standard deduction to an additional standard
deduction for property taxes, up to $700 for a married couple filing
jointly.
When we first addressed this issue in the Ways and Means Committee,
the National Association of Realtors found that our legislation would
generate about 1 million sales----
The SPEAKER pro tempore. The gentleman's time has expired.
Mr. NEAL of Massachusetts. Mr. Speaker, I yield the gentleman an
additional 30 seconds.
Mr. PASCRELL. The National Association of Realtors found that our
legislation would generate about 1 million sales to first-time
homebuyers and stimulate nearly $130 billion in increased economic
activity. You tell me that that's not worth it in this economy.
Studies have shown that this will help reduce housing inventory by
900,000 homes, which will, in turn, stabilize prices.
This is a wise and necessary course to take. Because of this we also
salute Chairman Rangel's leadership. I hope all my colleagues will
enthusiastically support this proposal. It's good for America.
Mr. REYNOLDS. Mr. Speaker, I reserve the balance of my time.
Mr. NEAL of Massachusetts. Mr. Speaker, at this time I would like to
yield to the gentlewoman from Pennsylvania (Ms. Schwartz) for 2
minutes.
Ms. SCHWARTZ. Mr. Speaker, I want to thank Chairman Rangel and
Chairman Frank for acting so swiftly and wisely to stem the tide of
foreclosures and address the sagging home values that are hurting
families and communities across our Nation.
By addressing a whole range of issues, from the continuing
foreclosure
[[Page H3285]]
crisis to the new and existing homes that are sitting vacant and
further depressing the housing market, this package represents a
significant step toward stabilizing the economy and restoring consumer
confidence.
I am very proud of the portion of this package that came through the
Committee on Ways and Means, particularly a timely, targeted, and well-
designed first-time homebuyers credit; a new Federal tax deduction to
help families meet rising State property taxes; and expansion of the
ability of cities and States to raise capital for infrastructure
improvements by partnering with the Federal Home Loan Banks.
In particular, I am pleased that the package includes a provision
that I championed, along with my Republican colleague Jon Porter, which
would enable State housing finance agencies to raise capital through
tax-exempt mortgage revenue bonds and use these additional funds to
help at-risk borrowers refinance their subprime loans, access mortgages
at fair rates, and enable families to meet their financial obligations
and stay in their homes. This provision will work hand in hand with the
Federal Housing Agency reforms that have come out of Chairman Frank's
committee and will allow States to play a role in addressing the needs
of their local communities.
As Federal Reserve Chairman Ben Bernanke put it, `` . . . doing what
we can to avoid preventable foreclosures is not just in the interest of
lenders and borrowers, it is in everyone's interest.''
It is in everyone's interest that we overcome this crisis in the
housing market, that we work to stabilize the economy, and we work to
maintain and build our competitive edge in the global economy. The
proposal before us is a comprehensive approach to this challenge, and I
hope that it will be supported by all.
Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, as the debate continues from the Ways and Means portion
of the housing bill, I believe the ranking member has set very clear
remarks on where many of us find ourselves with this debate today.
Chairman Rangel and Ranking Member McCrery have a superb working
relationship, and they have set the tenor of what has been hard work on
both sides of the aisle and bipartisan compromise and consensus to
craft some good legislation that has passed this body and has become
law. And as I manage this portion for the minority and look across to
my colleague from Massachusetts, he and I also share in commonsense
solutions to strengthen America and to resolve some of the problems and
challenges that are there. And this bill is not an exception to that.
We worked at the spirit of request of both the Chair and ranking member
to reach compromise and consensus to improve the Ways and Means
jurisdiction on housing.
And I look at it with sadness in two parts. One, as a realtor who
looks at the industry, knowing across the country that we face
challenges, and the statistics that Ranking Member McCrery outlined,
680,000 fewer starts, a reduction in high percentages of what the
industry is about, seeing what the drag has been on our country's
growth. And we need to work through good, solid solutions that need a
hearing process that involve the Congress, particularly this body, in a
debate of solution.
And when we look at the entire complexity of this bill, not only as a
Ways and Means member, not only as someone who understands the housing
world, but also as a former member of the Rules Committee, I know that
the Members of this body were trampled on based on the decision of
taking an energy bill and making the housing provisions, one of the
challenges of the country today, short-circuited as an amendment to
circumvent debate, amendments, recommittals, and substitutes that would
be afforded the minority in any other instance.
And as I look at this and the frustration I heard in the ranking
member's message of what is being trampled on on rights of the minority
to make presentations, quite frankly, maybe some majority Members on
amendments, recommittal, and substitute, I find it disturbing that this
is the beginning of strong trends of kind of a less than reasonable
approach to advance legislation through this body.
And in the final thoughts, as we look at the predicament we're in on
procedural processes here and maybe the fact that we could have made
this bill even better, I must share with my colleagues that there is a
clear veto message on this legislation as it leaves the House and it
will unlikely be the solution of the land.
So with that, Mr. Speaker, I reserve the balance of my time.
Mr. NEAL of Massachusetts. Mr. Speaker, just briefly in reference to
my friend Mr. Reynolds' comments, the constraints that we are operating
on today, as he criticizes them, are entirely legitimate; but they are
institutional problems, as opposed to just the will of the majority.
I was asking a Member of the minority last evening, ``Is it possible
to be an aggrieved Member of the majority?'' In these instances I think
you can be an aggrieved Member of the majority.
But I want to emphasize a very important point: This legislation
received overwhelming support from the minority in the committee, and I
think based upon news accounts this morning that there was some
conflict in two major dailies as to whether or not the administration
would, in fact, veto this legislation, but I can't overstate enough
this simple point: There was ample opportunity for the minority to
participate in the debate at the Ways and Means Committee; and, in
fact, they succeeded in amending the legislation that has come to the
floor today, and every voice was heard.
Mr. Speaker, with that I would like to yield 3 minutes to the
distinguished gentlewoman from Nevada (Ms. Berkley).
Ms. BERKLEY. I thank the gentleman from Massachusetts for yielding.
And I would like to particularly thank Chairman Rangel and Chairman
Frank for their extraordinary efforts on behalf of the American people.
Mr. Speaker, this amendment and the overall housing package we are
considering today will help millions of Americans and significantly
improve the economic situation in my State of Nevada. In recent years
the vibrant economy and rapid growth in my district of Las Vegas
combined to make the city appear immune to economic downturn. This
foreclosure crisis has shown that this is no longer the case.
Nevada has had the highest statewide foreclosure rate for well over a
year. The surge in foreclosures has led to huge inventories of unsold
homes. This, in turn, has led to massive layoffs of the construction
industry and other housing-related fields. Nevada, which has been a
land of economic opportunity, the fastest-growing State in the Nation,
now has an unemployment rate of 5.8 percent, which is, I'm sorry to
say, well above the national average.
This amendment takes several steps that will help both current and
prospective homeowners as well as increase affordable housing
opportunities. Current homeowners will be helped by the creation of a
standard deduction for property taxes, which will lower Federal taxes
for taxpayers who don't itemize and by freeing up funds to refinance
certain subprime loans. The tax credit for first-time homebuyers
creates a great incentive to get families into properties that are
currently sitting vacant due to foreclosure or that have been sitting
on the market for long periods of time due to excess unsold inventory.
The bill also takes steps to increase affordable rental housing,
another critical need in Las Vegas.
I'm hopeful that the combined efforts of this amendment and other
provisions of the package will be to alleviate the current housing
crisis and help turn our Nation's economy around. I proudly support the
intent and the substance of this legislation. I urge adoption.
And I must say I think it's insulting to the American people when
they hear that there are Members on the other side of the aisle that
support the bill, support the intent, but are voting against it because
they didn't get a procedural motion to vote on.
Let's do what's best for the American people and stop this ridiculous
infighting that nobody out there cares about. They care about staying
in their homes. They care about protecting their families. And, quite
frankly, they don't give a hoot whether somebody has a motion to
recommit to vote on.
Mr. REYNOLDS. Mr. Speaker, I would like to yield 5 minutes to the
[[Page H3286]]
gentleman from Texas (Mr. Brady), a distinguished member of the Ways
and Means Committee and a leading expert on this issue.
Mr. BRADY of Texas. Thank you, Mr. Reynolds, for your leadership on
our economic issues here in Congress.
Mr. Speaker, a principle that is before us today is that Congress
should not be bailing out speculators, lenders, or investors who have
behaved irresponsibly.
If you bought a home that is too big for you, that you couldn't
afford from the get-go, or you were betting that property values would
go up in your region, that's tough.
If you lent money without income or means of those who were borrowing
it, or you preyed, you preyed on people who didn't know better and then
churned their loan repeatedly, that's tough. If you purchased
securities without determining if the loans underlying them were sound,
that is your problem. That is not the taxpayers', that is not your
next-door neighbor's problem.
We do have a role in Congress and it is this, to address this issue:
One, we should make sure that there is available, affordable credit for
creditworthy borrowers. We need to make sure that we prevent this from
occurring again. And we need to punish, aggressively punish, the bad
actors who have infected our entire American economy.
The proposal we have before us today is well intentioned, clearly. I
think Republicans and Democrats agree on the need to help where we can.
It is well intentioned. It is not particularly effective. I have my
doubts that it will help much at all. It is too little, too slow, too
unfocused. It is, as you would imagine, a typical Washington reaction.
For example, a provision to allow States to have more authority for
low income housing. Nothing wrong with that. In fact, we need more of
that. That housing likely, knowing the process that works here, in the
State of Texas and others, it will probably be 3 years before anyone
moves into housing of that caliber. Way too late for this problem.
The property tax deduction for seniors who don't itemize, you always
want to help people with their property taxes. But is a retired person
really going to take $350 and buy a new home or buy a foreclosed home
in their neighborhood? Not likely.
Even the tax credit for first-time homebuyers, a part that, I think,
the philosophy of which I really like. But this no-interest loan is
structured so low, $7,500, it won't allow them to buy a home. There are
not many $75,000 homes on the market. If it's only a 5 percent down
payment, there are, truthfully, not very many $150,000 homes that are
in the areas of America that actually have massive foreclosures. Those
tend to be either in the depressed areas or in the high-value States
where a lot of people did bet on rising property values.
{time} 1300
So I like the philosophy of it. I don't think it will help much.
Thankfully it won't hurt. It won't hurt. There are good things in this
bill. The FHA modernization and the reform of Fannie Mae and Freddie
Mac I think are exactly appropriate.
But if our goal is to make sure we have available credit for
creditworthy borrowers, I think this bill is a poor alternative to the
Hope Alliance, which is moving faster and more effectively today and
covering more than 90 percent of those who have mortgages and could
have problems, or has already worked with 1.4 million families who need
help moving them into new loans or moderating the loan they have today.
And they are doing that without taxpayers underwriting any potential
loss. That is, I think, the approach that works best and is already
proven to work.
I will finish with this. I have said that there is nothing patently
offensive in the amendment from Ways and Means. In fact, again, I think
it is well intentioned. But in the underlying bill by Chairman Frank,
there is something that is especially offensive.
I come from Texas. Our region was destroyed in Hurricane Rita, a
hurricane that was stronger than Hurricane Katrina. We lost 70,000
homes that were damaged or destroyed. We lost more than $1 billion of
our timber industry, our main crop. We still have 10 percent of our
families who haven't moved back to southeast Texas because they don't
have housing. Yet in Chairman Frank's underlying bill, he creates an
affordable housing fund and dedicates $500 million to Louisiana and
Mississippi to help rebuild housing in those areas. And yet for the
same hurricane, and Hurricane Rita, in the communities that actually
took in the Katrina families as they fled that hurricane, and then
those same families have their own roofs torn off in southeast Texas,
this bill says, ``Drop dead. Forget it. We are going to help those who
are on this side of the hurricane.''
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. REYNOLDS. I yield the gentleman an additional 30 seconds.
Mr. BRADY of Texas. But to those who not only took in those of
Katrina, to those communities that opened their hearts, their churches
and their homes and have their own community destroyed, this government
and this Congress is saying, ``Forget it. We are going to divide this
hurricane along State lines. You can drop dead. No help for you in
housing. No help for you in apartments. No help for you, period. None.
Zero for the victims of Hurricane Rita in Texas.''
This Congress ought to be ashamed of itself.
Mr. NEAL of Massachusetts. Mr. Speaker, I would like at this time to
yield to the gentleman from Vermont via Springfield, Massachusetts, one
of the most distinguished families in Springfield, my friend, Mr.
Welch, for 2 minutes.
Mr. WELCH of Vermont. Thank you, Mr. Chairman.
Mr. Speaker, I rise in strong support of this legislation. The
legislation does two things that are good and one thing that is very
good in its absence. The two things that are good are one, it addresses
very specifically, in a practical way, the housing crisis that has been
brought on by the subprime foreclosure debacle.
What it does is it shares the opportunity of relief and it shares the
pain of getting the relief so that we can end up at the end of the day
with several hundred thousand American families still in their homes,
lenders having been able to mitigate their loss, homeowners being able
to keep a roof over their head, and the American taxpayer not being
left on the hook.
It does it by recognizing we have to use existing institutions to
accomplish that. It does it by acknowledging that it has to be
voluntary. A lender will be in this program only when they make the
practical business decision that it is a better route than foreclosure.
A borrower is going to be able to make that same change and has to be
able to demonstrate an ability to pay at the new current appraisal
value of that property. And in the process of doing that, it means that
we use the guaranty of the taxpayer, but in all likelihood, according
to the CBO score, not the money of the taxpayer.
So it is a practical solution to a very severe problem that could
only have been brought to this House for consideration with the
extraordinary cooperation of both sides in the Ways and Means
Committee, the Financial Services Committee, and the help of high
administration officials who had significant input along the way.
And it would be very unfortunate if the procedural debates that we
are having about process, made at the leadership level, derail what is
a practical approach to solving a very serious problem. What this bill
isn't, and I congratulate the Members on both sides as well, it is not
a blame game about who caused this. That is for another day.
Mr. REYNOLDS. Mr. Speaker, it is now my privilege to yield 2 minutes
to the gentleman from Nebraska (Mr. Terry).
Mr. TERRY. Mr. Speaker, I appreciate the opportunity to come down and
speak.
Certainly in every one of our districts, the housing crunch or crisis
affects everyday people. And we have to look at the best way to resolve
this.
And I think what we have today is kind of a best-intentions type of
bill. But I don't think it's really getting to the heart of the matter.
When I have talked to several economists that specialize in the real
estate markets, all have told me that when you're looking back and
trying to remedy or bail out what has occurred, that you are really not
going to fix the problems or stimulate the housing industry.
[[Page H3287]]
So I have developed, with several of my colleagues, a bill that is
forward looking. It is straightforward. It is an up to $10,000 tax
credit for a purchaser of a home, not a foreclosed home only or a new
build only or anything like that. Just if they want to buy a new home
or a home they would be eligible.
I realize that there was at least a weak attempt to something like
that in the amendment that is before us now. We have got a $7,500 tax
credit. But when you look at the eligibility and the fact that, yes, it
is a refundable tax credit that you have to pay back, it turns out to
be rather useless in trying to stimulate the housing market. This is
really a faux or phantom tax credit. So I don't think that can be used
to help stimulate our economy or the housing market to get us out of
the housing depression here.
And one of the issues that we're talking about here today is the
devaluation of our homes because of the housing depression and that
what we're going to do is make up the difference of a home that has
been devalued that goes into--
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. REYNOLDS. I yield 1 additional minute to the gentleman from
Nebraska.
Mr. TERRY. What we are going to do is spend $300 billion to try and
get us to right size that by bailing these folks out. That's just going
to prolong the problem according to the economists.
Two points there: If that is all that we are really going to do here,
we are not going to turn the tide of the devaluation of our homes. The
only way to do that is to increase demand overall, which increasing
your tax credit will do, not the phantom one that is here.
The other way is when you look at the market and the availability of
credit, especially for lower income people, I think we are doing the
right thing here by increasing the cap or the limit on credits for low-
income housing. But there is also market-available tools that are out
there. I have had people come to my office and present these market,
nongovernment bailout programs, not programs but options, where they
use a 501(c)(3) entity where you can put the life insurance in and
cover the costs, reduce the house, and I thank you for the opportunity.
Mr. NEAL of Massachusetts. Mr. Speaker, I must tell you I swore to
myself I was going to resist what I'm about to say until I heard the
term ``bailout.'' The minute I heard the term ``bailout,'' I thought to
myself the speed with which the Federal Reserve Board and the Treasury
came to the aid of Bear Stearns in a 48-hour period. And to use that
same example of making it an analogy here is striking.
With that, I would like to reserve the balance of my time.
Mr. REYNOLDS. Mr. Speaker, first, I guess I will ask the gentleman if
he has any other speakers. I am prepared to close and yield back the
balance of my time.
With that, Mr. Speaker, I think, again, for our colleagues it is
important to understand some of what has happened that the minority
feels that their rights have been trampled in what has been a very
unusual decision on a major piece of legislation, housing. It is
certainly a significant piece of legislation because the Rules
Committee granted 3 hours of debate by various jurisdictions. So it
certainly sends a signal to all observers that this is serious. It
warrants debate. And it is now before the House.
But I want to remind my colleagues that this is not a bill that has
gone regular order. There is a Senate bill that is energy that has come
over to the House. And we have now amended it entirely with a housing
amendment. And so this is an amendment to an existing Senate bill to
circumvent all of the regular order process that the House enjoys and
has had speakers of both parties affirm this should be the action of
how we debate great issues of the day.
This body is really infamous for acronyms. So today I call this the
SSAD Amendment, or the Sorry Sick Amendment Decision. It is sad because
the bipartisan work that was done in the Ways and Means Committee
outlined by many from the Ways and Means Committee is not being worked
through a process so that bipartisanship and the ability to have the
entire body debate its work that came from committee.
It is sad that the bipartisan work was trampled in the Rules
Committee by this decision to slickly move around the mechanism of
regular order in our House. It is sad that there is no substitute. It
is sad that there is no recommittal. It is sad that what makes it a
procedure so unusual and so frustrating is the House never had a chance
to work its will on housing legislation. In fact, as I said, the
housing bill sent back to the House by the Senate was an energy bill.
When it first passed the House, it had nothing to do with housing. And
it is sad that a procedural straitjacket has been used in order to
garner the type of votes that the majority wants to put before the
House today.
Finally, it is just plain sad that the bipartisan work of the Ways
and Means Committee is joined up by the Rules Committee with the Frank
housing bill, because it has been clear that senior advisers to the
White House will recommend the President veto the work of the Ways and
Means Committee.
So as we debate one of the significant issues that many feel should
be debated in the House, it is a sad day how we have approached to do
it.
I yield back the balance of my time.
Mr. NEAL of Massachusetts. Mr. Speaker, let me see what I can do to
lift the spirits of the gentleman from New York, my friend, Mr.
Reynolds.
In fact, I think what is sad is that you are leaving us, that you're
retiring. And I was searching hard to figure out the meaning of that
acronym, based upon the fact that the Ways and Means Committee took
this legislation up, and I want to reiterate, for the fourth time
today, 12 of the 17 Republicans on the committee voted for the very
bill that they are now all saying they are going to oppose. Forgive me.
That is sad. How can you come to the floor and argue against the
proposal that you voted for in the committee when you agree with just
about every part of the bill?
{time} 1315
That's what's before us here. We have heard these arguments, and they
have all said, we support most of what's in the bill, but they are
prepared because of an institutional constraint with the Senate to vote
against the legislation that they favor.
In my home State of Massachusetts, it's sixth in the Nation in
foreclosure activity. In Springfield, the largest community in my
district, 300 homes have been foreclosed this year and over 2,000
mortgages will reset to higher interest rates by the end of next year.
In response to the worsening housing crisis, Massachusetts this month
initiated a new law that extends the foreclosure moratorium from 30 to
90 days. Other States are taking similar action, but, like
Massachusetts, they need help from Congress.
Reports seem to suggest that the housing slide won't turn around
until 2010. These tax provisions we are considering today for families
and communities will help turn it around, I hope, much sooner. It
certainly will help our economy and markets in general.
The President's housing proposals really haven't worked. It's time
for the Congress to act. We are often accused of having a short memory,
but I think all Members in this chamber remember the recent government-
backed bailout of Bear Stearns, yes, the bailout of that mom-and-pop
operation called Bear Stearns. If we can, with great urgency and
enthusiasm, come to the aid of Wall Street, we have no excuse not to
help the people who reside on Main Street.
I hope that my colleagues will support this legislation, and I ask
unanimous consent to yield the remainder of my time to the gentleman
from Massachusetts (Mr. Frank).
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Massachusetts?
There was no objection.
Mr. FRANK of Massachusetts. Mr. Speaker, I will claim the remaining
time on behalf of the Financial Services Committee.
Mr. Speaker, this is a composite package. The President some time
ago, a couple of weeks ago, urgently asked the Congress to send him
several pieces of legislation, three in particular. One is embodied in
the part of the bill that came out of the Ways and Means Committee.
[[Page H3288]]
Two, in fact, had previously passed the House from our committee, the
bill reforming the government sponsored enterprises--and that came out
of our committee and on the floor in a form that the administration
mostly liked--and the bill to modernize the FHA.
In fact, the Senate then acted on the bill to modernize the FHA. We
went into conference, we ran into some difficulty. Not a formal
conference, but a conversation. What we have done because, as we know,
the Senate is in a situation where procedurally it's often harder for
them to act, so we are acting on the basis of a Senate bill.
We are readopting today two of the pieces we already adopted, reforms
of Fannie Mae and Freddie Mac and the FHA modernization. I think it
ought to be noted that in both cases they are a recognition by the
President that the private sector needs to be able to cooperate with
public or quasi-public entities to get the job done. Those who take the
philosophy that the market alone is sufficient unto itself, and that
public sector intervention will do more harm than good clearly have
been repudiated.
The FHA is a government agency. Fannie Mae and Freddie Mac are
government creations with both public and private aspects. It is clear
that we need both of them if we are to get out of this current crisis
in mortgage lending and be able to go forward in a healthy way.
There is one new element today. That is a bill that our committee
voted on last week and the week before. We had a markup. It was
suggested to us in many ways by some of the regulators. In its
essential form it was endorsed last Monday by the Chairman of the
Federal Reserve, and we worked closely with his staff. The
administration had an objection to one major piece of an auction
mechanism. That's the longer part of the bill. What it says is that
holders of loans, not the lenders, because the lenders have
unfortunately long since been able to sell off their loans in many
cases--and that's part of the problem--if the holders of loans will
write down the amount due them in the principal, and if they get to a
point below the current value of the home, in many cases these homes
have lost value from when they were first mortgaged, and the borrower
can be reasonably expected to repay it, we will broaden the right of
the FHA to make a case-by-case determination, provide a guarantee so
that can then be financed and resold to the secondary market.
It's entirely voluntary on the part of the lender. The lender will
retain the right to foreclose. In many cases we believe that it will
pay the lender not to foreclose.
In fact, we have legislation in this package sponsored by the
gentleman from Delaware (Mr. Castle) and the gentleman from
Pennsylvania (Mr. Kanjorski) that will ensure servicers who are willing
to write down the amounts, that they will not be sued if they write
down those amounts to a reasonable level. We think that is very
helpful. Again, it's voluntary.
We do believe that knowing if you write this down to a reasonable
level, accepting your loss, you will be able then to at least get some
guarantee of that to help stabilize the situation. But people should
understand, there is not $1 of taxpayer money going to writing down
that loan. The holders of the loans have to write it down.
Secondly, the borrower can then go to the FHA if the borrower can pay
the new loan, but there is no taxpayer money that will go to help pay
off that loan. The taxpayer exposure comes in the fact that there are
FHA guarantees. If someone gets an FHA guarantee and subsequently fails
to make the payments, his or her house is forfeited to the FHA.
We will lose some money on this, we believe. The Congressional Budget
Office estimates that half a million foreclosures will be averted by
this program, that would otherwise have taken place, at a cost to the
taxpayers of $2.4 billion. That means $4,800 for every foreclosure
averted.
We are told, well, this is a bailout, and I want to follow on what my
colleague from Massachusetts said. We have seen one bailout this year
over investors and speculators. It came when the Federal Reserve,
actively urged on by the Treasury, bailed out for $30 billion
potentially--we don't know what the losses will be--but $30 billion is
at risk of what will ultimately be public money, to lenders, to
speculators and investors, people who were partners at Bear Stearns.
Now there may have been some confusion yesterday. I tried to avoid
it. I am not critical that we are doing that. I am critical of the lack
of sensible regulation that led them to be in that position. I think we
do have to examine it, and I want to examine it from the standpoint of
what we can do that will make it less likely that we will be confronted
with that kind of choice, either provide those funds or see serious
further economic debilitation.
But for the administration that engineered $30 billion of bailout for
the investors and others who did business with Bear Stearns to say that
this $2.4 billion cost according to CBO that will avert 500,000
foreclosures is unacceptable as a bailout is as intellectually and
morally and economically inconsistent a policy as we have ever seen. It
is true, and some of the Republicans have said in a letter to me in the
House, that they wanted to question this.
I would note, by the way, we talked about this, I have looked at the
letter that was sent to me. I looked again at the letter, and in no
case does it say they were opposed to it. People raised questions.
Maybe that's an easy way to kind of cover your bases, but my point is
not so much those who wrote the letter, it's the administration.
The administration says they're going to veto this bill, that it's a
bailout. It is $2.4 billion versus $30 billion at Bear Stearns.
Now, I believe that Secretary Paulson and Chairman Bernanke have been
doing the best they can in this situation. I am not critical of what
they have done. Chairman Bernanke has been consistent and thinks this
is also a reasonable thing to do.
The President, of course, appointed Secretary Paulson and Chairman
Bernanke, and for the administration that supported and facilitated the
$30 billion for Bear Stearns which went to lenders, went to investors
and some of them were speculators--to then object when it's homeowners
seems to me to be entirely the reverse of the reality of the situation.
Again, I want to stress, I was asked by 17 Republicans if the
committee would have a hearing. My answer was yes, the committee will
have a hearing after we have dealt with the current subprime crisis--
and that will be soon, that was our priority--and a hearing not simply
to say what did you do, because we cannot compel them to undo it--to
look at what they did in the Bear Stearns thing in the context of
figuring out how we are best able to diminish the likelihood that it
will recur.
But we are in a recession, and a major cause of that recession is the
subprime crisis. We do not see any alternatives to this bill to trying
to work on that.
Yes, we had Hope Now, and then we had FHA Secure. The administration
had several policies. They have been closer, in many ways, to us. The
differences are not as great as they once were.
But the fundamental here is this, foreclosures are causing, have
caused and are causing serious economic problems. Diminishing the
number of foreclosures is in the interest--not simply of those who will
avert foreclosure--but of people in the neighborhood of the cities in
which they are located and the whole economy. That's why we are going
forward with this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. NEUGEBAUER. Mr. Speaker, I claim time in opposition.
The SPEAKER pro tempore. The gentleman from Texas is recognized.
Mr. NEUGEBAUER. Mr. Speaker, I yield so much time as he may consume
to the distinguished ranking member of the House Financial Services
Committee, Mr. Bachus.
Mr. BACHUS. Mr. Speaker, I rise in strong opposition to this
Democratic omnibus housing bill, and also I rise in strong opposition
to the procedure under which it comes to the floor today under a
contorted rule, which is designed to do one thing and one thing only,
and that's allow no Republican amendments, allow no input, allow no
open debate of different provisions with any ability to modify those
provisions.
Mr. Speaker, I submit for the Record page 24 of a promise that the
Democratic majority made to the American
[[Page H3289]]
people. It's a statement of the Speaker of the House in their document
``A New Direction for America.''
Regular Order for Legislation
Bills should be developed following full hearings and open
subcommittee and committee markups, with appropriate
referrals to other committees. Members should have at least
24 hours to examine a bill prior to consideration at the
subcommittee level.
Bills should generally come to the floor under a procedure
that allows open, full, and fair debate consisting of a full
amendment process that grants the Minority the right to offer
its alternatives, including a substitute.
Members should have at least 24 hours to examine bill and
conference report text prior to floor consideration. Rules
governing floor debate must be reported before 10 p.m. for a
bill to be considered the following day.
Floor votes should be completed within 15 minutes, with the
customary 2-minute extension to accommodate Members' ability
to reach the House Chamber to cast their votes. No vote shall
be held open in order to manipulate the outcome.
House-Senate conference committees should hold regular
meetings (at least weekly) of all conference committee
Members. All duly-appointed conferees should be informed of
the schedule of conference committee activities in a timely
manner and given ample opportunity for input and debate as
decisions are made toward final bill language.
The Suspension Calendar should be restricted to non-
controversial legislation, with minority-authored legislation
scheduled in relation to the party ratio in the House.
In this document, the Democratic majority promised to the American
people in what was called a Congress working for all America, they made
this promise: ``Bills should generally come to the floor under a
procedure that allows open, full, and fair debate consisting of a full
amendment process that grants the Minority a right to offer its
alternatives, including a substitute.''
Well, that's not what we have here today. Instead, we have what we
are calling the American Housing Rescue and Foreclosure Prevention Act
of 2008, but, in fact, it started out as a bill here in the House and
passed the House as a bill to move the United States towards greater
energy independence and security. Absolutely none of that bill remains,
it's a total sham.
Through some, I suppose, back room, front room, side room, smoke-
filled room, who knows, but the Democratic leadership, we, the American
people really don't know--but at some point they decided to take every
bit of that bill out. The only thing that remains of that bill,
actually, is the resolution that brings this bill to the floor.
It refers to this bill and the resolution that brings it to the
floor. The resolution says, upon adoption of this resolution it shall
be in order to take from the Speaker's table the bill (H.R. 3221)
moving the United States towards greater energy independence and
security, developing innovative new technologies, reducing carbon
emissions, creating green jobs, increasing clean, renewable energy
production. That's all gone. But that's still in the Record. That's
still the resolution.
{time} 1330
Mr. Speaker, the procedure outlined here indeed stifles the
democratic process. It corrupts the democratic process. Despite ``A New
Direction for America,'' despite a specific promise not to do this, we
have a process that not only allows no Republican amendments, no
substitutes, it does not allow even a vote on final passage of this
entire bill. There will be no vote on final passage. There will be a
vote on each of the three amendments that go to make up this package,
but as the resolution clearly says, it is sort of self-executing, a
motion that the House concur in the Senate amendment to the title, the
so-called renewable energy bill, shall be considered as adopted. There
won't even be a vote on that. Now that is pretty innovative. That is
pretty unusual.
But above all, as strange and as contorted and convoluted as this is,
it is a corruption of the democratic process. It is a corruption of our
democratic system, and it is a sad day for this House.
It is not the Members of this House who are being denied the full
amendment process, it is Americans, those Americans we on this side of
the aisle represent. They, as are we, are being shut out of the
process.
Now, Mr. Speaker, if we had been allowed, and we were not allowed to
offer a substitute, if we had been allowed to offer an amendment, one
of our first substitutes would have contained some of the things that
the Democratic alternative has. It is a Democrat alternative, but there
is no alternative, nor was one allowed, so I am not sure that we ought
to use the word ``alternative.'' Alternative without an alternative is
maybe what we should call it.
But it has FHA reform in it. When we said we would have liked to have
offered a stand-alone amendment or offered legislation to do that, the
chairman says that has already passed the House. Certainly it has; so
did the renewable energy bill. But it didn't pass the Senate. We would
like, because there is agreement in this House, and we could have
agreed today and almost unanimously passed a FHA reform bill which all
Members of this body say will go a long ways toward solving the
problems of Americans stressed by lowering housing prices and their
mortgage obligations. We could have done that. But in the Senate there
has been no movement. We won't do that today because if we start taking
those concrete steps, it will diminish the majority's opportunity to
take what is a bad situation and adopt and create a tremendously
expensive new omnibus housing bill.
GSE reform, we would have liked to have seen that joined with FHA. It
is in this bill, and it is offered kind of as a candy or a carrot: take
the GSE reform which you want, take the FHA reform which you want and
we have all passed, and in doing that, you will have to take a new $300
billion housing program. At a time when we are running a deficit, that
makes no sense to most Americans, most of us on this side of the aisle.
Most of all what I do oppose is our inability to strike from the
overall package this new $300 billion government subsidy that I believe
is fundamentally unfair and likely to do more harm than good.
Mr. Speaker, let me explain, and in doing so I do not want to
minimize the seriousness of the distress many of our citizens are
experiencing. When we talk about distress, we sometimes focus on those
who are behind on their mortgage payments. But, Mr. Speaker, let me
assure you there are millions of other Americans who are making their
mortgage payments; but, nonetheless, they are under an equal stress or
a great stress themselves.
Last night the gentleman from Vermont said what we want to do with
this bill is we want to spread the pain from those million or 2 million
Americans who are behind on their mortgage, we want to spread that pain
to all Americans. We want to spread that pain to those 34 million
Americans who are renting their homes. We want them to take part of
that yoke upon them. We want those who are making their mortgage
payments on time, we want them to adopt some of this liability and
assume some of this liability. We want those 25 million American
families who have paid off their mortgages, many of them elderly
citizens, we want them to assume some of this pain. We want them as
taxpayers to assume some of these liabilities.
In other words, 110 million American families who are making their
mortgage payments on time, who are renting or who have paid off their
mortgages, they are being drug into this process and are being made
liable and are on the hook now for these bad loans. They have been
reading about it, and now they are going to be responsible for them.
Now they are going to have to start paying. And the vast majority of
Americans who find themselves struggling with mortgage payments,
struggling with high gas prices, struggling with high food prices, are
now going to assume responsibility for ill-advised financial decisions
and misjudgments of other people. Good and decent people who have
absolutely done nothing wrong, don't have a bad mortgage, don't have a
problem with their mortgage, are going to be trapped in this dragnet.
Now is it necessary to involve the 110 million American families that
aren't behind on their mortgages? I say, no. No. In fact, the Federal
Government has already extended almost a trillion dollars in guarantees
of liquidity. They have brought onto their books, the Federal Reserve,
almost a half a trillion dollars worth of these questionable loans and
questionable securities backing these loans. And the American people
could be on a hook for that.
That is why my companion on the Financial Services Committee and 17
of
[[Page H3290]]
us on the Republican side wrote the chairman and said we need to take a
close look. We need to urgently look at the Federal Government
extending its guarantees and assuming securities and investments that
maybe have no market value, just to pump liquidity into the market.
Now what we have agreed to in the past and we continue to agree with
and we would have liked to have said let's go further with this, is the
Hope Now program. The 1.4 million Americans, those who come closest to
making their mortgage payments, they are behind or in default but they
were close, and they had an ability to, with adjustments to their
mortgage agreements, could make those payments, 1.4 million American
families have been helped by Hope Now. And we think that more will be
helped.
The FHA Secure program, almost 180,000 families have been helped by
that program, at some Federal expense.
Before we create a massive new government program and put billions of
additional taxpayer dollars at risk, we need to think long and hard
about asking other Americans to assume this burden.
Lenders and securitizers wanted no part of government regulation or
interference when house prices were soaring, and they made
extraordinary profits. Speculators made millions of dollars. Lenders
made millions of dollars. Investors on Wall Street bought high-risk
SIVs, securitized investment vehicles, and they made millions of
dollars. Sometimes we read where the heads of those hedge funds,
private equity funds, and investment banks were paid a billion dollars
in profits. They all made a lot of money. But now that the loans that
they eagerly made are going bad, this bill offers a mechanism to off-
load their problem loans onto the American taxpayers. That is unfair.
It is wrong.
Because participation in the plan is voluntary, no investor will part
with a mortgage if they think it has a reasonable chance of performing.
The incentives are designed to ensure that the taxpayer loses.
Investors will place the worst mortgages they have into the program. In
fact, that is exactly what they are going to do. They are going to off-
load the worst of their loans. If there is any chance of people paying,
they won't put these loans into this pool. They will take those loans
where people are way behind or have no ability to pay and they will put
them into a program that will be financed by FHA-guaranteed loans. We
all know when those loans go bad, who pays. It is not the lenders, it
is not the borrowers, it is not the investors, it is not the
speculators, it is the people we all represent.
Given the substantial risk these loans present, no lender would
refinance them without the FHA guarantee. That is what was said on the
floor. They are not going to refinance these with a Federal Government
guarantee. There is a reason for that. They anticipate a default.
The result is the taxpayers of this country, 110 million American
families that acted responsibly during the run-up in housing prices
will be left to bear the cost of cleaning up after irresponsible
lenders, investors and speculators. That's just not fair.
For all of those reasons, Mr. Speaker, I oppose this housing package
and I express my disappointment that the Republican Party, the
minority, that many representatives here were shut out of the process,
denied any opportunity to address the bill's many deficiencies through
the amendment process or through the motion to recommit.
Mr. FRANK of Massachusetts. Mr. Speaker, before I yield to the
gentlewoman from Florida for 3 minutes, I would like to note the use of
the figure $300 billion is not a hopeful sign about a rational debate.
Three hundred billion is the total value of the mortgages that could be
insured. It would cost $300 billion only if nobody made any payments
ever, and when the property was taken by the Federal Government, none
of it had any value. CBO gave us a score of $2.4 billion. So we can
debate this, but I would hope we can debate it with real numbers. The
CBO score for the mortgage part is $2.4 billion. Everybody knows that
$300 billion is not remotely what is at risk.
I yield now 3 minutes to the gentlewoman from Florida (Ms. Ginny
Brown-Waite).
Ms. GINNY BROWN-WAITE of Florida. I thank the gentleman for yielding,
and I thank him for clarifying the true potential cost of this bill.
Mr. Speaker, today we have to face the fact that many Americans are
in a very tough financial position. If I have learned anything over the
past year, it is how intricate our financial and economic markets are
woven.
As members of the Financial Services Committee, we have been
presented and have debated dozens of proposals and ideas to combat this
housing crisis before us. Many of them were sound, good ideas worth
pursuing.
In the months leading up to today, going around my district I came to
several conclusions, but one is that Congress cannot accept the status
quo. I have been patient. I believe in the market working itself out,
but that just doesn't seem to be happening. At a time when our dollar
is devalued, not only is the price of petroleum products, the gas
everyone fills up with over $1.70 more than it was a year ago, we also
have very high food prices. People are finding it hard to make those
payments.
And the beauty of this, it has to be a homeowner who is being helped
out, not a speculator, not a flipper.
While Chairman Frank's proposal isn't perfect, I do think it is one
that Members should take a very close look at and compare it to what is
happening in their districts. It is a voluntary, participatory program.
No one is forced to play.
{time} 1345
This is not the silver bullet, by any means. Homeowners, lenders and
investors will make sacrifices under this.
But I'm also concerned about hearing from constituents who try to
work with their lenders, but their lenders won't call them back. I'm
tired of driving through the Fifth Congressional District and seeing
many houses vacant because of foreclosure. No one wins when a house in
the neighborhood is foreclosed, absolutely no one, because it brings
down the value of those properties.
No, Mr. Chairman, we cannot stick with the status quo. That's
sticking our policy-making heads in the sand. By providing lenders an
incentive to write down mortgages, modernizing FHA, improving GSE
oversight and including tax incentives, I believe we can help Americans
get back into the market and help the housing market to survive.
The bill isn't perfect, and certainly, neither was the process that
this bill comes to the floor. And I'm sure that Chairman Frank agrees
that the process is murky, at best. But I do believe that what we have
before us will provide relief to Americans, and I urge Members to
support it.
Mr. NEUGEBAUER. Mr. Speaker, the distinguished ranking member of the
Financial Services Committee mentioned that this is a shell. Maybe it's
a shell game. I'm not sure. But for energy bill being the underlying
bill, I think the American people wish we were on the floor today
discussing an energy future for America.
It's now my distinct pleasure to yield 5 minutes to the distinguished
ranking member of the Housing Subcommittee, Mrs. Biggert from Illinois.
Mrs. BIGGERT. I would say that all I can find in the Congressional
Budget Office cost estimate is that it's $2.7 billion and not $2.4
billion over 2008 to 2013, as far as the CBO estimate that Chairman
Frank was talking about.
You know, Congress has yet to submit a single bill to the President
that might begin to address this crisis in the housing market, and here
we are again debating controversial new housing legislation, instead of
passing common-sense housing reform that could start helping
homeowners.
And I feel like I woke up one morning, we just had a markup on the
Housing bill, and suddenly, I couldn't even find the number of it, H.R.
3221, and it suddenly was a different bill with a lot of different
provisions in it. Some were the same and some weren't. I have to say
this reminds me of the SCHIP bill that we debated, which kind of came
over here the same way from the Senate. I don't think it's going to be
the same result, but I just can't understand that process.
And I do appreciate Chairman Frank's inclusion of FHA and GSE reform,
as well as the funding for housing
[[Page H3291]]
counseling and mortgage fraud in the bill that we're considering today.
But these are much needed reforms that could increase the liquidity in
the housing market and provide consumers with an alternative to the bad
subprime loans, and help to restore consumer confidence, which is so
important.
But attaching these things to a taxpayer-funded bailout will not get
them any closer to the President's desk. And make no mistake. This is a
bailout. It would place U.S. taxpayers on the hook for the $300 billion
guarantee, but that includes the riskiest mortgage debt on the market.
And it does this by allowing speculators, borrowers who have overstated
assets, who have cheated and knew that they couldn't make the payments,
and those who invested irresponsibly, to pawn off their financial
liabilities on U.S. taxpayers. This is a liability.
And instead of serving distressed homeowners, the bill requires that
the lenders, not the homeowners, to make the decision to place the
mortgage in the program. Since the lenders are the ones that would like
to get rid of their bad loans and put those on the, be guaranteed by
the Federal Government, the taxpayers, the taxpayers will be bailing
out the banks, the investors on their most unwise lending decisions.
Even more disturbing is that the bailout is partially funded on the
backs of seniors through changes to FHA reverse mortgage program.
Mr. Speaker, we shouldn't be asking American taxpayers to pay for the
mistakes of those who over estimated their income on mortgage
applications, or scam artists that inflated appraisals and flipped
properties. Nor should they pay for homeowners who chose to live beyond
their means, using inflated home equity loans to buy a new plasma TV, a
swimming pool or a fancy car. It is not fair to those who saved and
invested responsibly.
The majority of Americans are working hard to make ends meet. Ninety-
three percent of our mortgage holders are making their payments on
time. Fifty-one out of 55 million Americans with a mortgage are making
their mortgage payments on time.
Twenty-five million Americans own their own homes and have no
mortgage. Thirty-four million Americans are prudently renting because
they aren't ready to own a home. These hardworking Americans should not
be forced to foot the bill for the bad decisions of a few who gambled
that their home values would never stop rising. They don't think that's
fair, and I don't think so either.
I understand that many of my colleagues are looking at the economic
effects of the housing bubble and saying to themselves, ``We must act,
we must do something. ``But we shouldn't do something if it's not
right. Congress can help struggling borrowers and promote economic
growth without burdening the taxpayers with inappropriate spending.
And that's why I join with Financial Services Ranking Member Bachus
to offer an alternative plan that helps homeowners in a responsible
way. It does include the FHA reform. This could solve this problem
right away. Our substitute funds housing for counseling, other reforms
to GSEs that's so important, without a so-called trust fund or slush
fund.
And there's nothing in the Democrat alternative that would prevent a
similar housing crisis like this in the future. Though improved,
disclosure lender registration higher price is standard.
The SPEAKER pro tempore. The time of the gentlewoman from Illinois
has expired.
Mr. NEUGEBAUER. I yield the gentlewoman an additional minute.
Mrs. BIGGERT. Our Republican alternative would do more than put an
expensive Band-Aid on the housing market. It begins to address the
underlying causes of the subprime mess. It will ensure that borrowers
have access to legitimate loans; that they understand the terms of
their loan, and that they are taking a loan that they can afford based
on the actual value of the house.
We need to bring transparency and integrity to the homebuying
process, and we need to expand access to credit for worthy borrowers
who genuinely want to pay off their loans, but we need to do it without
wasting taxpayers' dollars.
I think we have an alternative bill that would solve these problems.
And many were supported by both Republicans and Democrats. It's a
commonsense plan that doesn't spend money and, in fact, has been scored
by CBO to actually reduce the deficit by $25 million. Coupled with Mr.
Terry's tax credit for owner-occupied homebuyers, it will jump-start
the flailing housing market and get our economy back on track.
That's why I urge my colleagues to vote against the bill before us
today and consider the alternative, if we had the opportunity to have
an alternative.
Mr. FRANK of Massachusetts. I yield myself first 45 seconds to say
that on the scoring, $2.4 billion was the CBO score for the mortgage
part. They did say a total of $2.7 billion. The other $300 million is
attributable to an amendment offered by the gentlewoman from Illinois
on mortgage. So the gentlewoman from Illinois is correct. It is $2.7
billion. That includes the $300 million she added to the bill with her
amendment, and the $2.4 million in mortgages.
Mrs. BIGGERT. Will the gentleman yield? I thank you for putting that
$300 million.
Mr. FRANK of Massachusetts. Yes, the gentlewoman is correct.
Now I would yield to the gentleman from Ohio for a unanimous consent
request.
Request for Permission to Modify Amendment No. 3
Mr. LaTOURETTE. Mr. Speaker, I ask unanimous consent that the
amendment that I have offered with Mr. Miller of North Carolina be
modified and amended, and I will describe that--but then I know the
Clerk has to report it--just by adding 2 words, on line 7, after the
word ``foreclosure'' adding the word ``process,'' and on the next line,
after the words ``foreclosed property,'' add the word ``maintenance.''
The SPEAKER pro tempore. The Clerk will report the modification.
The Clerk read as follows:
Modification of amendment No. 3 printed in House Report
110-622:
Insert ``process'' after ``foreclosure'' and strike
``treatment'' and insert ``maintenance''.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
Mr. PRICE of Georgia. Mr. Speaker, reserving the right to object, I
appreciate my colleague on the committee for attempting to clarify an
issue which is, I think, significantly problematic.
The issue of defining foreclosure time, and length, the particulars
have always been the purview of the States. And I know that this
amendment is an attempt to try to clarify that. In fact, I think it
confounds it, and my concern about the unanimous consent request is
that it doesn't make it clear still. So I have significant concerns
about the amendment.
I'm happy to yield to my friend from Ohio for any clarification that
he might offer.
Mr. LaTOURETTE. If the gentleman would yield to me on his
reservation, I would make this observation to the gentleman and to the
House. This amendment that Mr. Miller and I crafted, obviously, one of
the things that vexes, and it doesn't matter whether it's financial
services or anything else, one of the things that continues to vex and
cause tension between the Federal Government and the States is this
whole issue of preemption.
So when Mr. Miller came to me with the original amendment, we began
to hear some concerns. And quite frankly, the concerns were are you
opening the door to a Maryland-type situation, where they can pass a
State law that says that nobody can foreclose on property for 5 years,
10 years, 15 years. And clearly, although I happen to think that that
kind of abrogation of property rights is an unconstitutional exercise
of legislative authority, I understood the concerns.
And so I will tell the gentleman on his reservation that we sought
the advice of the OCC and the OTS and received a list of things that
are already preempted. And as I think the gentleman has accurately
stated, the manner, the process in which foreclosures have happened
have always been the purview of the States. And then the boarding up of
properties or the maintenance of properties that are foreclosed.
[[Page H3292]]
And so it is my attempt through this unanimous consent request, I
think, from all Members, and I think Members on both sides of the aisle
have some concerns about this. This wasn't limited to Republican
Members. There were some Democratic members that had concerns as well.
The OCC has indicated to us that this answers that concern. It doesn't
deprive them of their authority under the National Bank Act. Some of
the banking institutions that were originally concerned about the
amendment have indicated the that this is language that they can live
with.
And just as a Republican Member of the House, I would say to the
gentleman from Georgia, under his reservation, that this is typically
the point in our debates where our distinguished chairman of the
Financial Services Committee skewers us as Republicans for being for
States' rights on some days and being against States' rights on other
days. It was my goal to make sure that States' rights were preserved on
those things that they've always had the opportunity to regulate, and
not impinge upon those, but also recognizing that not all the best
ideas in terms of how to proceed on process or maintenance necessarily
emanate from this Chamber.
I thank the gentleman for yielding on his reservation.
Mr. PRICE of Georgia. Reclaiming my time, I appreciate those comments
and I would agree. I think that all of us, many of us in the House,
many certainly on this side of the aisle, want to retain the States'
prerogative in the area of foreclosure. And I would suggest to the
gentleman that his comment about that, and the discussion that's gone
on on the unanimous consent request and the language therein, is
something that ``they can live with.''
And I would suggest, Mr. Speaker, that this probably should have been
dealt with in committee, and it might have been able to be clarified to
a much greater degree. My concern remains.
Mr. FRANK of Massachusetts. Mr. Speaker, I don't know what the
parliamentary status is. Has the gentleman objected or not?
The SPEAKER pro tempore. Does the gentleman from Georgia continue to
object?
Mr. PRICE of Georgia. Yes, unless anybody else would like time on my
reservation, I will object.
The SPEAKER pro tempore. Objection is heard.
{time} 1400
Mr. FRANK of Massachusetts. Mr. Speaker, I regret that, but sometimes
people would rather see things not improved so they can then complain
that they weren't improved. Fortunately in this case, we are not
constrained.
The gentleman from North Carolina and the gentleman from Ohio said it
had not come to our attention fully until after the committee markup.
What happened was that they came forward with this amendment, and we
heard some concerns from the Comptroller of the Currency, as the
gentleman from Ohio has said, and from bankers.
We then talked to the gentleman from Ohio and the gentleman from
North Carolina (Mr. Miller), talked to the American Bankers
Association, the Community Bankers Association, the Mortgage Bankers,
the OCC, various of the advocacy groups, the State Attorneys General,
the National Council of State Legislators, and they came to an
agreement that adding these words would make this something that would
work.
Now, the obvious thing in a constructive way would have been with the
agreement of all of the stakeholders and the conversations among
Members on both sides to be incorporated into the bill. But
constructive isn't always the order of the day.
So let me make this announcement which I have also, in anticipation
that there might be such an objection, although I had spoken to the
ranking member and he told me he thought we should go forward. It was
my understanding the gentleman from Ohio had talked to the leadership
on the Republican side. They thought it should go forward. So here is
where we are. We will vote on the Miller-LaTourette amendment. I will
guarantee to the Members that when this goes forward in any discussions
we have with the Senate, we will accept this language, the Miller-
LaTourette language, or if someone comes up with a better idea, any
other language that would be mutually agreed upon by the gentleman from
Ohio and the gentleman from North Carolina, the two bipartisan
sponsors.
So while we don't get the unanimous consent agreement, because some
people would rather there not be a resolution over an objection, let me
announce what may be a first, and I'm not always the most
technologically updated person; I don't have a lot of the devices, but
I do want to maybe be the pioneer of the virtual unanimous consent
agreement. In good faith the gentleman from North Carolina and the
gentleman from Ohio want to amend this, they were denied unanimous
consent, but I am prepared to act as if the body, and I have no
question that it would have been adopted had we had a chance to vote on
it, that it be incorporated. And as we go forward, we can guarantee
Members that this language, if this bill is included, this will be
included; and I can report that all of the stakeholders, the community
advocacy groups, the banks, and the public officials at the State and
local level believe that with the language that was worked out by the
gentleman from Ohio and the gentleman from North Carolina with the
Comptroller of the Currency, it will be fine.
So I wish we had got unanimous consent, but I want to assure Members
that in this process going forward, our failure to get real unanimous
consent, as opposed to virtual unanimous consent, will make no
difference whatsoever.
On this point, let me yield 3 minutes to the gentleman from North
Carolina to complete this conversation.
Mr. MILLER of North Carolina. Mr. Speaker, I want to add my assurance
to that of Mr. Frank, as if anyone would need that, but I think that
this clarification really does not change the intent of the statute. On
its face, going from foreclosure to foreclosure process is redundant.
Foreclosure is a process. It is a legal procedure. It is a legal
procedure by which real property given as security for the payment of a
debt is seized and sold to pay the debt. It is a legal procedure. It is
all process. So saying ``foreclosure process'' appears, on its face, to
be redundant.
However, the concern has been that States would add to the same
section of their State ordinances, their State statutes, other
provisions that have nothing to do with foreclosure procedures, that
have to do something to make other provisions; and yet there would be
the argument that all of those now are exempt, immune from any argument
of preemption. That is certainly not what we intend, and I lend my
assurance to that of Mr. Frank that I will work to make sure that the
language that Mr. LaTourette just presented be the language in the
final bill.
Mr. NEUGEBAUER. Mr. Speaker, at this time it is my pleasure to yield
3 minutes to the gentleman from Florida (Mr. Feeney).
Mr. FEENEY. Mr. Speaker, I thank my friend from Texas, and I would
say that people in my district, there are some people who are hurting
right about now as there are around the country. There are some people,
indeed, who are homeowners in very bad shape. Some, for example, were
duped or lied to by people that loaned them money. Some, a few, have
lost their jobs. Some bought homes at the high of the housing market,
say $150,000, now to find that their house is more like $120,000 or
$100,000. And we all feel very sympathetic for those people.
But I don't feel too terribly bad for speculators that went in search
of ways to get higher returns and take higher risks as an exchange, and
that's who is getting bailed out today. I also don't have complete
sympathy when it comes to using taxpayer money to reimburse people
that, for example, put zero money down. They didn't buy that home. They
bought an option to buy the home. People that bought into a 3-percent
teaser rate knowing that if the interest rate went to 7 percent, they
would never be able to stay in that home. People that used no
documentation to demonstrate that they ever had the chance to repay.
They moved into a home with an option to continue buying it. They
didn't make the type of commitment that most homeowners do
[[Page H3293]]
to put 10 or 20 or 30 percent down and to make sure that they have a
mortgage and a loan that they can pay under virtually any circumstance
except for a disaster.
Who does this bill help? Well, The Wall Street Journal made it very
clear who this bill helps. This bill is a bailout from American
taxpayers of speculators and imprudent borrowers. Less than 1 percent
of borrowers whose homes, under this bill, would be eligible when all
is said and done to be helped.
I come today to speak on behalf of the forgotten man. And that
includes some 50 percent of Americans that either own their home or are
renting. Every one of them watching today needs to know that they are
bailing out irresponsible speculators and lenders and they will pay the
price of this bill. I come here to speak for the 90-plus, 95 percent of
homeowners that are making their payments on time, that took out
responsible loans. They need to know that they are bailing out
irresponsible speculators and people that went in search of higher
profits.
Investors who take advantage of this program are basically getting a
guaranteed gift from the government: 85 percent of a loan that they
know is not likely to perform. We are bailing out people that will
cherry-pick the very worst loans in their portfolio.
Who is here speaking on behalf of the forgotten man? Who is here
speaking on behalf of 99 percent of Americans that did not behave
irresponsibly, that did not behave foolishly, that ultimately will pay
the price for this bill? Well, some of us in the minority are here
speaking on behalf of the forgotten man, which is 99 percent of
America.
And I would leave you with this: Chairman Frank and the CBO and
others can estimate how much this bill will cost these forgotten men
and women, 99 percent of Americans who were not irresponsible who will
pay the price. The answer is we don't know. We don't have a crystal
ball. If property prices around the country take off by another 50
percent and go up, there will be no cost. If they go down by 30
percent, the cost will be closer to $3 billion.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to Mr.
Kagen of Wisconsin.
Mr. KAGEN. Mr. Speaker, I rise in strong support of the Foreclosure
Prevention Act on which would address today's crisis in the housing
market and help many American families work out their financing to
avoid foreclosure, although it comes a little bit too late for the
gentleman I talked to in Green Bay an hour ago who will be losing his
home.
As we are all aware, foreclosure rates have risen, Housing prices are
declining, and too many families nationwide, including many veterans
who served us with bravery, honor, and courage in Iraq and Afghanistan
are overwhelmed with their monthly mortgage payments, many having
fallen into the trap, the adjustable-rate mortgage trap.
For these reasons, I commend Chairman Frank for graciously including
a provision I offered that would provide funding in fiscal years 2008
and 2009 for grants to be administered to the Neighborhood Reinvestment
Corporation for mortgage foreclosure and credit counseling for veterans
recently returning from active duty. The mounting mortgage
delinquencies and defaults pose a serious economic threat to our
economy, to say nothing of what it does to affected families and their
communities.
Preventing foreclosures for our veterans will benefit all
communities, and more importantly, by providing additional counseling,
resources to veterans, it will enhance their ability to make sound
financial decisions during these challenging times. Our soldiers need
our help now, and toward that end, I'm pleased that the Foreclosure
Prevention Act would also assist returning soldiers to avoid
foreclosure by lengthening the time a lender must wait before starting
the foreclosure process from 3 months to 1 year following a soldier's
return from military service.
This act is not a handout. It is a hand up. And I urge my colleagues
to support passage of this very important legislation.
Mr. NEUGEBAUER. Mr. Speaker, at this time it is my pleasure to yield
5 minutes to my colleague and friend from the great State of Texas (Mr.
Hensarling).
Mr. HENSARLING. I thank the gentleman for yielding.
I first come here somewhat amused at the lecture that some of us
received from the majority leader last evening on abuse of process. I
hear many of my colleagues on the other side of the aisle say that we
have a housing crisis and that this is one of the single most important
bills to come to this floor in this Congress. And yet here we are, as
the minority, not being allowed any amendments, not being allowed a
substitute, not being allowed a motion to recommit, not even being
allowed to have an up-or-down vote on the bill. And we're accused of an
abusive process?
But enough of that.
Let's look at the substance of this. There is a great challenge in
our housing markets. There is no doubt about it. And there are innocent
people who have suffered, and they deserve to be helped. But this is
the wrong plan.
What we need to do, Mr. Speaker, is, number one, we have to have
better disclosure so that people understand the economic obligations
they're undertaking. We need to enforce the laws that we have on the
books. Mortgage fraud has been rampant on both the borrowers' side and
on the lenders' side.
We need to prevent the automatic tax increase that has been included
in the majority's budget that's going to impose a $3,000-a-year on the
average American family tax increase phased in over the next 3 years.
We need to do something about the skyrocketing cost of gasoline and
food that has occurred on the watch of the majority. They've been in
charge of the economic policies of this country for almost 18 months.
The shrinking American paycheck is our challenge. A huge bailout of
Wall Street and borrowers, some who may be innocent victims and some
who may be guilty, is not the answer, and using taxpayers' money to do
it is simply an insult.
Number one, we ought to have the facts before we actually take on a
major piece of legislation. The American people need to know. Over half
of America rents their homes or owns their home outright. Of those who
have an active mortgage, 95 percent are making their mortgage payments
on time. You have roughly 2 percent who are in foreclosure. So now
we're being asked essentially for 98 percent of America to bail out 2
percent of America.
Now listen. On the investors' side, these are a big bunch of boys and
girls on Wall Street who made decisions about what they should invest
in. We know from the Financial Crimes Enforcement Network that mortgage
fraud has been rampant: 1,400 percent increase over the last 6 years;
42 percent increase last year alone, with the majority of the fraud
being borrowers who lied about their income, about their assets, about
their occupancy; and yet we have a bill to help them out.
Let's hear from some of the people who are being called upon to do
the bailout. I often ask people who reside in the Fifth Congressional
District of Texas that I have the honor of representing what they think
about legislation coming to the House floor. And I hear from people
like the Sadler family in Mesquite, Texas, and they write:
``Congressman, 3 years ago my husband and I faced the loss of our
home due to a decrease in the sales income. We cut our expenses as much
as possible, but it was simply no longer affordable. We made the
decision to put the home on the market before we faced foreclosure.
``I am adamantly opposed to my tax dollars going toward bailing
anyone out of a mortgage crisis. If we didn't have to give up so much
of our income to the government for taxes, we could have continued to
afford our home.''
And what is the answer of the Democrat majority? Well, to the Sadler
family in Mesquite, we're going to increase your taxes an extra $3,000
a year.
Mr. Speaker, I heard from Sergeant First Class Kenneth Adams of
Frankston, Texas. He writes:
``Congressman, the mortgage crisis Congress is trying to fix is an
insult. My house went unpainted until I could return from serving in
Iraq. I'm a Sergeant First Class in the United States
[[Page H3294]]
Army with over 20 years active and reserve service. Some day I would
like to use my VA house-buying benefits, but what a fool I was to earn
those type of benefits when all I had to do was be irresponsible,
overspend, and have the government bail me out.''
{time} 1415
That's the answer that the Democrat majority brings to the floor, and
it is an insult to 98 percent of Americans who did it right.
Mr. Speaker, we should reject this legislation.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to the
gentlewoman from Texas (Ms. Jackson-Lee).
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Mr. Speaker, in 2007, Texas ranked fourth
behind California, Florida and Illinois in pre-foreclosures. We're
reminded of Franklin Delano Roosevelt who said we have nothing to fear
but fear itself. We certainly have to face fear and to be able to
respond to this collapse in mortgages and our economic markets, by
resolve and not fear.
And so this is not a bailout. It's a helping hand. It's what Franklin
Delano Roosevelt did to restore this country, and it worked. We
survived.
And so this tells us that we can survive, providing $10 billion in
low-income tax credits for low-income homeowners and to also build
rental properties. We also give a $7,500 tax credit for first time home
buyers and a $700 tax credit for those who are paying property taxes.
And it does fix the GSEs. It does provide an opportunity to get us
out of this mortgage foreclosure hold, but it does it in the right way.
It's not scandalous. It's not illegal. It allows us to be able to have
the mortgage owner sell it back to FHA at a lower price; the lower
mortgage is then backed by FHA, and it isn't a gimmick. It's not a
flipover. Any profit made by the homeowner comes back to the government
if the property is later sold.
And we protect our disabled veterans, those who have fallen upon hard
times. They can still be in the program even if they are in bankruptcy.
Mr. Speaker, this bill responds to the homeless and the helpless.
What it does say is those who are living from hand-to-hand, who are
living in their parents' homes, who have been thrown out of their home,
who have been thrown out because they're in rental property, this is a
fix and the life and the spirit of what America is all about.
We don't believe in giving a fish. We believe in giving a fishing
rod. This is an even-handed, balanced way between the House and the
Senate to provide tax relief but also to be able to provide the
construct and the infrastructure to get our houses back together, along
with our stabilization bill that says we're going to buy back
foreclosed homes and give them to people who need them.
Is there anything wrong with America rising to be higher angels and
helping our fellow brothers and sisters?
Mr. Speaker, I rise in support of H.R. 3221, the ``American Housing
Rescue and Foreclosure Prevention Act of 2008''. This momentous
legislation would jump-start the market for mortgages by establishing a
true market value for the securities backed by these loans.
H.R. 3221 responds directly to the current housing crisis facing this
country, while providing the tools to prevent a repeat of these
problems.
This is preeminently the time to speak the truth, the whole truth,
frankly and boldly. Nor need we shrink from honestly facing conditions
in our country today. This great Nation will endure as it has endured,
will revive and will prosper. As President Franklin Delano Roosevelt
stated in 1933, ``the only thing we have to fear is fear itself--
nameless, unreasoning, unjustified terror which paralyzes needed
efforts to convert retreat into advance.'' We must do just that. We
must move forward and that is exactly what H.R. 3221 seeks to do.
This legislation will begin to repair, not bail out the economy,
restoring confidence in the markets, limiting the damage to families
and neighborhoods, and rejuvenating the communities with new affordable
housing. Ironically, we celebrate the bailouts of yesteryear, when we
believed that the power of the federal government was needed to get the
country out of the Depression.
Were the banking reform laws, emergency relief programs, work relief
programs, and agricultural programs, the Social Security Act, and
programs to aid tenant farmers and migrant workers--were these
bailouts? Many of the New Deal programs under President Roosevelt were
considered bailouts at that time. And yet, these programs brought our
country out of the Depression, rejuvenated our economy, and gave hope
as we sought to deal with the War overseas.
Texas
In 2007, Texas ranked fourth behind California, Florida, and Illinois
in pre-foreclosures. Last year, Texas held the top seat for active
foreclosures.
H.R. 3221 helps homeowners and only homeowners, not speculators or
lenders. We cannot continue to stand by as things get worse. Texas
reported 13,829 properties entering some stage of foreclosure in April,
a 16% increase from the previous month and the most foreclosure filings
reported by any state. The state documented the Nation's third highest
state combined foreclosure rate--one foreclosure filing for every 582
households.
Many homeowners in my district are worried about missing their next
house payment or their next home equity mortgage, or their interest
rate going up. These families are under stress and in constant fear of
losing their homes.
While this bill should not be the last word in housing legislation,
it is a great beginning. This bill coupled with H.R. 5818, the
Neighborhood Stabilization Act, provides a good starting point in
providing Americans with relief.
Texas and what HUD is Doing
In March, the Department of Housing and Urban Development (HUD),
announced the Texas State Program and the cities of Houston and New
Braunfels will receive a total of $234,868,077 to support community
development and produce more affordable housing. HUD's annual funding
will also provide down-payment assistance to first-time home buyers;
assist individuals and families who might otherwise be living on the
streets; and offer real housing solutions for individuals with HIV/
AIDS.
While HUD is working to help Americans, we must all do our part.
We need to pass H.R. 3221, and we need to continue to push in a
bipartisan manner, legislation that will ease gas and energy costs, the
rising costs of food, and the ever-rising cost of health care.
We are spending billions of dollars on the war in Iraq. I support our
troops but I am dismayed at how our support for a war that needs to
become less military and more diplomatic in nature, has disrupted our
ability to take care of things at home.
Conclusion
Thank you Mr. Speaker for your leadership in this area, I urge my
colleagues to support American families by supporting, H.R. 3221. I
yield back the balance of my time.
Mr. FEENEY. Mr. Speaker, I move I be able to claim Mr. Neugebauer's
time in his temporary absence.
The SPEAKER pro tempore (Mr. Ross). The gentleman is recognized.
Mr. FEENEY. Mr. Speaker, I yield 6 minutes to a champion of the
working family, Mr. Garrett from New Jersey.
Mr. GARRETT of New Jersey. I thank the gentleman.
I rise today to voice my opposition to the underlying bill, as well
as the underlying unfairness that's contained in it. But before I speak
about Title I, which does contain the opportunity to use taxpayers'
dollars to insure up to $300 billion worth of new mortgages to bail out
the Nation's banking industry and homeowners, those who made
irresponsible decisions, I want to briefly discuss other parts of the
bill.
The chairman has been routinely criticizing the administration for
failing to do anything, he says, to address the current housing
problems facing the Nation, but you know, this administration has been
calling for the last couple of years for FHA reform and new regulations
for the GSEs. However, the new Democrat majority in the House and the
Senate has been unable to pass these important measures.
You know, when you think about it, who knows how many people we could
have already helped to stay in their homes and keep out of foreclosure
if the Democrat leadership would have only forged an agreement already
and passed those previous bills.
It is unfortunate that due to the refusal of the distinguished
chairman and others in the majority to temporarily forego some of their
pet projects, such as the housing slush fund for ACORN and La Raza and
others, that these two important reforms have been held up now for the
last year-and-a-half.
And now, with this new housing omnibus bill before us, the chairman
has once again refused to compromise, I say, in good faith with the
administration or the minority side and has included such pet projects
once again.
[[Page H3295]]
And as an indication of the majority's unwillingness to substantively
compromise, the administration has issued a veto threat to this bill.
Over the last 6 months, the administration and HUD have been working
on a program, the FHA Secure. It's to try to help American families who
are in the right house but maybe not in the right mortgage to stay in
the house. And this program has recently been expanded upon and has to
date helped thousands of Americans to be able to stay in their homes.
But now our distinguished chairman and Democrat leadership are
proposing a plan that is really financially risky. It rewards
irresponsible behavior and it mandates a loosing of FHA underwriting
standards, and this is important, that would put taxpayers on the hook.
So, when the chairman put together what I say is an ill-conceived
plan, he noted originally that it would help up to 2 million
homeowners. Well, unfortunately when CBO scored the bill, they
determined it would only help 500,000, and that's the same amount they
have oft criticized the administration plan is projected to help. So
you'll excuse me if I find it a little hypocritical here that those who
believe that the administration's plan isn't going to provide adequate
help to struggling homeowners but that this new plan, which is
forecasted to help the exact same number of people, is somehow the
perfect cure-all.
Now, the bill before us for consideration goes much further than
this. This bill actually pays people to stay in their houses. It would
give every homeowner who was in trouble and participates in this
program a 10 percent equity stake in their home. Normally, depending on
the specifics of your loan, it could take you or I 3 or 4 years for a
homeowner to make enough payments for you to get a 10 percent equity
stake. Now under this bill, we're just going to give those people who
are having trouble making their payments. You know, I know things are
bad in the mortgage markets right now, but are things so bad that we
actually have to pay people to stay in the houses?
Where is the fairness in that proposal? The distinguished chairman
acknowledged during the committee consideration that maybe this bill
isn't fair in that sense. What about the person who has been patiently
sitting on the sidelines over the last several years, saving up,
waiting for these unsustainable high housing prices to come down to
reality, come down to earth? They've been paying their rent every
month, building up no equity whatsoever. What about those people? We're
now rewarding someone else who has undertaken an irresponsible loan and
bought something, frankly, they just couldn't afford.
What about the person who took out a loan 3 years ago and he's been
scraping by, struggling just to get enough money from every paycheck to
paycheck to afford their mortgage and, I say, attain their 10 percent
equity over 3 years? Now, again, with this bill, we're just giving that
equity away to people who didn't save, didn't decide they would live
within their means.
Some say the reason this provision is needed is that it will
encourage people to stay in the houses. I believe, quite frankly, the
possibility of being kicked out of your house is incentive enough to
try to stay in your house. I don't have a problem with trying to help
people, and this side of the aisle is trying to do it as well, to stay
in their homes, but I do have a problem with facilitating arrangements
in which they are given a 10 percent equity in their home with a
mortgage that is insured by the Federal Government, and that means the
American taxpayer.
Our distinguished chairman was quoted in the paper the other day,
``We have done as much as possible to respond responsibly with the
public policy.''
However, the legislation before us completely disregards borrowers'
payment histories and credit scores when considering eligibility for
this program. Borrowers could have missed the majority of their monthly
payments over the life of the loan, yet these borrowers would still be
eligible for a government-backed mortgage--and taxpayers would be on
the hook. An amendment was offered during the committee process to
rectify this and it was soundly defeated by the Democrat majority
party.
I have also heard a number of members on the other side of the aisle
mention today their concerns about the Federal Reserve bailing out Bear
Stearns to the tune of $29 billion. However, none of the members
complaining or any democrats for that matter choose to sign onto any of
three letters I and a number of my Republican colleagues sent to
Chairman Frank, Secretary Paulson, and Chairman Bernanke noting our
strong concern.
For the last 17 months that the Democrat majority has been in charge,
the Administration has been asking for a number of housing reforms from
Congress, none of which have been delivered. Now, they want to say the
Administration has idly sat by and watched as the housing turmoil has
continued to increase, while it is actually the Democrat congress that
has yet to pass significant housing reforms that could have provided
the Administration with the much needed tools to begin easing us out of
this housing downturn.
The Chairman states that this a grand compromise between the
different groups involved in the discussion, but the only compromise I
can see is the one between he and his party, the big banks who made
unsound loans, and the special interests and trial lawyers that stand
to benefit.
Mr. FRANK of Massachusetts. Mr. Speaker, first I wondered how I'd
fill 2 hours, but I could do that just responding to the inaccuracies
we've just heard. Let me pick a couple.
The gentleman from New Jersey said that the administration wanted FHA
reform and GSE reform and this Congress wouldn't get it. Well, he
misread the newspaper. Bryan Montgomery, the head of the FHA, was
quoted yesterday as saying, if Congress had done what I wanted in 2006,
this wouldn't have happened. It was the Republicans who were in power
in 2006. It was under the Republicans that GSE reform and FHA reform
were frustrated.
When we took power as the Democratic majority, last year this
Financial Services Committee and this House passed both of those in
forms very close to what the administration wanted. In fact, the holdup
on the GSE, and I know the gentleman thinks the notion of building
affordable rental housing with public help is, as he calls it, a slush
fund, and I think it's that lack of sympathy for affordable housing
that was one of the contributing factors to getting people into homes
they couldn't have owned.
But the fact is that we sent the GSE bill over to the Senate last
year with a very large majority in favor, and the Senate hasn't acted,
partly because the ranking Republican on the Senate committee hasn't
wanted to act. I know the administration has been trying to persuade
him to act.
So the notion that the affordable housing trust fund, that's slush
fund for the gentleman from New Jersey, housing for lower income
people, for elderly people, for disabled people, that's slush fund,
well, it was not that that held it up. It was the refusal apparently of
the ranking member to act on it.
So this is an example of the inaccurate descriptions you're getting.
Mr. GARRETT of New Jersey. Would the gentleman yield?
Mr. FRANK of Massachusetts. I yield.
Mr. GARRETT of New Jersey. Just for one question. With regard to your
initial comment with regard to the FHA reform and the GSE reform, my
comment saying that it hasn't been done, isn't it true that we're 17
months into the year under Democrat leadership? Have those bills passed
this House and have those bills made it to the President's desk?
Mr. FRANK of Massachusetts. No, but the gentleman very inaccurately
blamed the Democrats. He forgot, Bryan Montgomery said in 2006, the
Republicans did it.
I think one ought to be more accurate and less partisan in a
description of reality. The fact is that those were defeated under the
Republicans when he was on the committee. Then, the Democrats did pass
them.
And as to the GSE bill, he said it was the slush fund. I really like
that phrase, ``slush fund.'' That's affordable housing for people, for
lower income people. He said that's what's holding up the GSE bill.
That is not remotely true. The GSE bill was sent by us to the Senate.
They haven't taken it up. By the way, the affordable housing trust fund
was in the Senate committee version when the Republicans were in power
under the current ranking member when he was chairman. So that is just
inaccurate.
[[Page H3296]]
It is true they have been held up in the Senate as they were held up
under the Republican leadership as well. We are closer to passing them.
I am confident that they are going to get passed fairly soon. We did
finally get to some conversation on the FHA.
My objection was that the gentleman acted as if the world was created
in January of 2007 and the Democrats refused to pass the bill,
neglecting to note that the head of the FHA himself put the blame much
earlier when the Republicans were in power.
I now yield 3 minutes to the gentleman from North Carolina (Mr.
Miller).
Mr. MILLER of North Carolina. Mr. Speaker, I wish to address
specifically the amendment that Mr. LaTourette and I have offered.
Mr. Speaker, the worst of the foreclosure crisis is yet to come. Mr.
Frank just corrected incorrect factual assertions. Let me correct one
as well.
Mr. Feeney said a few minutes ago or gave the example of a 3 percent
teaser rate. Mr. Speaker, the typical initial rate for the mortgages
that are causing this problem was 8\1/2\ percent, which is already well
above the conventional prime rate.
According to The Wall Street Journal, 55 percent of the people who
got those loans qualified for prime loans. Their trust was betrayed.
And the typical adjustment after just 2 or 3 years was a 30 to 50
percent higher monthly mortgage payment. Seventy percent had prepayment
penalties so people couldn't get out and would have to pay when they
got out, when they refinanced out of a loan they could not possibly
afford and the lender never intended they would afford because they
required they come back and refinance again.
It's not surprising that 3 million homeowners with subprime loans are
expected to enter foreclosure proceedings in the next couple of years
and 2 million of them will likely lose their homes. Another 40 million
homeowners will see the value of their homes decline when other homes
in their neighborhood are foreclosed, and they will lose $200 billion
in their home property values.
Credit Suisse now estimates that there is another wave of
foreclosures coming after this one as even more exotic, innovative
mortgages go into default. Credit Suisse estimates that in the next 5
years 12.7 percent of homeowners with mortgages are expected to lose
their homes to foreclosure.
Mr. Speaker, when those families lose their home to foreclosure most
will fall out of the middle class and into poverty.
The policy failures that caused this problem, that led to this
crisis, were in Washington, but State and local government are having
to deal with the consequences.
Property rights, contracts and foreclosure proceedings are all
matters of State law, not Federal law. The laws vary from State to
State, but every State's foreclosure law includes protections for the
borrowers whose homes are being seized and sold to pay the mortgage.
{time} 1430
State laws have notice requirements. They provide reasonable time for
the families who are losing their homes to find someplace else to live
and to move; they limit the costs that they be charged to homeowners;
they allow homeowners to cure defaults in some circumstances. Many
States limit or prohibit deficiency judgments if the sale of the home
is not enough to pay off the debt, and on and on. And several States,
not surprisingly, are now considering additional laws to protect
borrowers who are losing their homes to foreclosure.
Recently, there has been some suggestion, some hint in the press and
elsewhere that if State and local governments start getting underfoot,
if they start making a nuisance of themselves, the lending industry
will argue that some of the especially annoying State laws, State
foreclosure proceedings cannot be applied to mortgage holders or
mortgage services that are affiliated with national banks or trusts.
There is no Federal foreclosure law, but they argue that State
foreclosure proceedings could be preempted by Federal laws that govern
national banks and trusts. This amendment clarifies that State laws and
local ordinances on foreclosure and foreclosed properties are not
preempted by Federal law.
Mr. NEUGEBAUER. Mr. Speaker, I yield myself 3 minutes.
Mr. Speaker, I've spent nearly three decades in the housing business.
And over those three decades the housing market has gone up and the
housing market has had its soft moments, and one of the soft moments
we're experiencing today. I liken it to the fact that the housing
market has a cold. And when you go to the doctor and you talk to the
doctor about a cold, what does he usually tell you? He says, you know,
you're going to have to let it run its course. And quite honestly, over
the years as these housing downturns have happened, that exactly what
we've had to do is let these markets run their course. And what we do
know is that when they run their course, that they come back a lot
stronger.
We have just come off an unprecedented run in housing where the rise
in home ownership has risen to record levels. And how did we do that?
Well, we did it with the marketplace.
One of the things about this bill that bothers me is that we leave
people with the understanding that if their house goes down, the
government will come in and make up the difference. We can't do that.
People buy stocks, people buy bonds, people buy other assets. They go
up, they go down. But it's not the role of the Federal Government to
create a profit opportunity for people.
One of the things that we know is that, as the ranking member, I
think, pointed out, is that we have 110 million people that are already
meeting their own housing needs. Some of them are having problems, yes,
they are, and we're sorry about that. We know about 51 million people
in America have mortgages. And a lot of those folks are taking second
jobs and doing things to make sure that they meet their rental payments
and meet their housing payments. And you look at the fact that 94, 95
percent of those people are making those payments, not only are they
making them in full, but they're making them on time.
What we can't let the Federal Government be is the piggy bank when
things don't go exactly the way we planned. I would like to go back
over my 30 years in the real estate business and wish the Federal
Government could have been my piggy bank when I bought property that
didn't go in the right direction. Some of it went down, some of it went
up. But what I do know is that it is important that the Federal
Government not get into the business of trying to manipulate markets.
Markets are very efficient. In fact, they're a lot more powerful than
the Federal Government. I know everybody here feels like they may be a
powerful person and part of a powerful government, but quite honestly,
these free markets are much more powerful than the Federal Government
and they're much more efficient and they're much better able to deliver
a housing market that the American people can sustain and count on.
And so that's one of the reasons that I rise in opposition to this
bill today is, as I look across America--and I wish you could have been
at a town hall meeting with me the other day where people weren't
asking about mortgages, Mr. Speaker, they were asking when is this
Congress going to finally do something about getting a comprehensive
energy strategy for America? When are we going to open up the ability
to drill in these other areas? And when are we going to be able to come
up with more nuclear power plants?
Mr. Speaker, the American people don't want to make their neighbor's
payment when they're having a hard time making their own.
Mr. FRANK of Massachusetts. I yield 3 minutes to a very hardworking
member of the committee, the gentleman from Georgia (Mr. Scott).
Mr. SCOTT of Georgia. You know, I'm wondering whether the Republicans
are looking at the same America I'm looking at, and that the American
people are feeling. Between 7,000 and 8,000 American families file for
foreclosure every day. While we were up here debating this bill the
last day and today over 15,000 American families have filed for
foreclosure. We have a crisis.
Now, I want to deal with three points here right quick in my 3
minutes. The
[[Page H3297]]
first one is this: I think it is wrong as wrong can be for the other
side to continually blame this crisis on the backs of the American
family.
Let me read here for a moment from this morning's Hill newspaper, and
I hope that you all will read this as well, this article by J. Morton
Davis of the Harvard Business School, an economist. He tells you what
the cause of this is and who is to blame.
Because mortgage originators themselves were not taking any of the
risk of holding this paper and were being well paid by providing
mortgages to Wall Street banks that were packaging them, they became
more aggressive, less demanding of the conditions traditionally
required upon them. The mortgage brokers and bankers introduced a whole
series of new criteria that made it easier to obtain a mortgage, they
introduced nothing down, no equity mortgage, interest-only mortgage, no
income, no job requirement as sufficient basis to receive the mortgage.
That's why we're in the condition that we're in, not on the backs of
the poor American family.
He goes on to say that ``the changes in lending practices actually
transformed what were solid, safe, secure mortgage loans into
instruments that were inferior even to the subprime mortgages. The
cause of this can be traced to the simple fact that the providers of
these mortgages did not end up holding the paper and thus were far less
concerned about the quality of the loan.'' Because nobody bothered to
look at or take issue with the enormously changed quality of these
underlying mortgages, not the Federal Reserve, they didn't look at it,
not the Securities and Exchange Commission, not the rating agencies,
not even we here in Congress, who surely should have been more
responsible and accountable, and not the many Wall Street banks that
were coining the money, just as they did. The whole world is now
suffering the pain, the outsized losses and the damage to its banking
systems and economies.
Ladies and gentlemen of this Congress, it is not the American
homeowner who is the cause of this, he is the victim, and it's our
responsibility to provide the response for it.
Now, the other point I wanted to make is I have a copy in my hands
here of the Congressional Budget Office co-assessment. Let's put to bed
once and for all, this is not $300 billion of the taxpayers' money. The
taxpayers' money that's going to this, as clearly as put out in this
estimate, is $1.7 billion just to run the program, another $300 million
for administrative support, and the counseling of $400,000. And then
Mrs. Biggert's own program for counseling of $300 million. That's $2.7
million of the taxpayers' money.
Let's do facts right. That's why we need to pass this bill, Mr.
Speaker. Let us stop fooling around and give the American people some
relief.
Mr. NEUGEBAUER. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from South Carolina, a member of the House Financial Services
Committee, Mr. Barrett.
Mr. BARRETT of South Carolina. Mr. Speaker, I rise to oppose this
bill, which I think is unhelpful for the housing market and unfair to
the American taxpayer.
Like many of my colleagues, I'm concerned that this program will only
distort housing prices, causing problems in the future by forcing the
taxpayer to foot the bill.
I have no doubt that some of the lending practices in the beginning
of the decade, Mr. Speaker, were irresponsible, and that the government
should take certain steps to help the market right itself and to
prevent these problems from recurring in the future. At the same time,
I'm a firm believer in the power of the free market, and I believe that
the housing market fundamentally reflects the laws of supply and
demand.
I'm always wary of government intervention in the markets and
concerned about unintended consequences. I fear that in our rush to
help, we are overlooking the basic realities about today's housing
market and about the cost of government spending.
I think we can all agree that government programs cost money, and
this program has the potential to cost a tremendous amount of money.
And that money comes from the taxpayer, Mr. Speaker. Because, in
reality, like the laws of supply and demand, decisions have
consequences, and money has to come from somewhere. It's not fair to
ask my constituents from South Carolina, who work hard and spend wisely
and pay, in my opinion, too much tax money, to carry the burden for
others' financial mistakes.
While I believe that people in need deserve our understanding and our
help, I trust in the ability of the free market to correct itself. And
I think Americans know how best to spend their money and should be
trusted to make their own financial decisions. I also think that
lenders have a responsibility to live with the consequences of
investments that did not quite turn out as planned.
Mr. Speaker, I offered an amendment in the Financial Services
Committee that is representative of my concerns. The amendment was not
adopted, and it was very simple. It was to strike the section of the
bill that prohibits FHA from denying borrowers entry into the new FHA
program solely on the basis of the mortgagor's current FICO or other
credit scores, or any delinquency or default by the mortgagor. In South
Carolina talk, Mr. Speaker, this amendment would have given the FHA the
opportunity to use individual pieces of information on their own that
reveal the risk of borrowers defaulting. In offering the amendment, I
wanted to allow the FHA to protect the American taxpayer by giving them
every tool available.
I understand the motivations of this section of the bill to try to
include as many people as possible in the program meant to help them.
And I understand it would be nice if we could help all of these
borrowers, but some may have very bad credit scores that reflect
irresponsible borrowing behavior. It's not fair to the American
taxpayer to insure the loans of the riskiest borrowers who may not be
able to pay their mortgages no matter what the terms of the loan.
Without a doubt, it's never easy to hear the stories of hardworking
individuals and families losing their homes, but I do not believe that
more government intervention is the solution to our problems. And we
should not allow the American taxpayers to become the insurance policy
for the financial decisions that did not turn out as planned or for
temporary market downturns. We should not punish those hardworking and
responsible American taxpayers for the mistakes of a few. For these
reasons, and others, I oppose this legislation and ask my colleagues to
do the same.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 4 minutes to the
gentleman from California (Mr. Gary G. Miller).
Mr. GARY G. MILLER of California. Mr. Speaker, I rise in support of
this bill.
A lot of people are losing their home in this country. In fact, in
California, 500 families or more lose their home every day. And that
not only hurts them, but the neighbors around them. Because of
foreclosure, their home value drops weekly.
I don't support government bailouts. I consider this bill we're
dealing with here far from a government bailout. If you look at the
situation people are in today, people are suffering from shrinking
paychecks, other things go wrong in their life. But this loan is the
most expensive FHA loan you will get.
Normally, a person can go to get an FHA loan, put 3 percent down, and
the government will basically be guaranteeing 97 percent financing.
Under this loan, the lender has to be willing to take 85 percent of
current market value. Let me explain that so it makes it understandable
to most people.
Let's say you bought a house for $580,000. The first trustee gets
$5,000, but current market value is $400,000 for that house. The people
are upside down, they can't make the payment, it is going into
foreclosure. The lender has an opportunity to allow another lender to
buy them out with an FHA loan guarantee, and they're willing to take
$340,000 for a loan they have that the market today is $400,000, and
the new loan against that house will be $360,000. Now, that sounds
really good. And we say the person is going to make a lot of money,
it's a bailout. But this is really more like a joint venture. And I
don't think CBO even scores this portion. If you sell the home the
first year, we either get 3 percent of the loan amount or 100 percent
of the profit on the home, whichever is greater. If they sell the
second year, we either get
[[Page H3298]]
3 percent, or 80 percent of the profit, whichever is greater. The third
year, 60 percent. And if you hold it for 30 years and you sell that
home, FHA gets 50 percent of the profit on that home.
Now, I don't know how most people look at it, but that's the worst
FHA loan you can get. It's not a bailout, but it's enabling a person
who's losing their home and a lender who says, well, if I foreclose it
on $400,000, I might get $380,000, $390,000. And what does that do to a
neighborhood? That home that originally sold for $580,000, now the
market value for that home in that neighborhood is now $380,000,
$390,000 or $400,000.
This is more like a refi. It doesn't impact the value of the homes in
the community. It basically helps a person get in position where they
can retain ownership of their hone. And they're not going to make a
windfall profit for it.
I would like to thank the chairman for introducing language in this
bill that I worked on for 5 years, and that's raising conforming home
limits in high-cost areas. Basically, Freddie and Fannie and FHA, in
high-cost areas, you can borrow a maximum of a $730,000 loan from them
today. The biggest problem we've had in the marketplace in recent years
is people have been forced into jumbo loans. If you look at a GSE loan,
that's Freddie and Fannie, compared to a jumbo loan today, you can
generally save about 100 basis points in interest rates. That's a huge
amount of payment a person can save each year, enable a person to be
able to put away money in the future for house payments if times get
tough and basically own their own home.
Some people have said they don't trust the Refinance Program
Oversight Board because they don't have any idea what the Board is
going to implement as far as criteria to qualify for this loan. I have
a problem believing that we can't trust the Secretary of Treasury, the
Secretary of HUD and the Chairman of the Federal Reserve Board to come
up with criteria based on income, assets, liability, payment history,
other criteria, debt-to-income ratio. If we can't trust those three
individuals to come up with a reasonable criteria under which this loan
is made, I think we're in trouble in this country.
The problem some people have is FHA exists. FHA loans are made today,
and FHA is guaranteeing, through insurance premiums, these loans. Now,
a normal FHA insured premium costs a borrower .55 percent per year,
about half a percent. Under this new program, they have to pay 1.5
percent per year to FHA to underwrite this guarantee. That's far from a
giveaway. I can't see anything in this FHA loan that's a giveaway.
I rise in strong support of this bill.
{time} 1445
Mr. NEUGEBAUER. Mr. Speaker, now it is my honor to recognize for 3
minutes the distinguished gentleman from Georgia (Mr. Price), who is
also a member of the Financial Services Committee.
Mr. PRICE of Georgia. I thank the gentleman for yielding.
There's a general sense, Mr. Speaker, that it's this bill or nothing,
and that certainly isn't true. In fact, much has been done. As has been
talked about, the FHA Secure program has created greater flexibility,
helping hundreds of thousands stay in their homes. The Hope Now program
has already helped 1.4 million individuals stay in their home, getting
borrowers and lenders together. Loan limits have been increased, FHA,
Fannie Mae, Freddie Mac. The Federal Reserve has lowered interest
rates. So the notion that the Federal Government has been unresponsive
or slow to move is disingenuous and is repeated as fact solely as an
excuse for the Democrats to continue outbidding each other on how much
taxpayer funding they can spend or bail out imprudent borrowers who
either bought too much house or lenders who were gladly willing to give
them the money. So much has been done to date.
We have also heard the chairman and others say that it's unlikely
that this will cost $300 billion, that it will only be $2.4 or $2.7
billion. Well, then why doesn't the bill say that? It doesn't, Mr.
Speaker, because the taxpayer will be on the hook for risky loans and
the number may significantly rise, and that's because this bailout plan
irresponsibly disregards borrowers' payment history and credit scores.
Borrowers could have missed the majority of their monthly payments over
the life of the loan; yet those borrowers would still be eligible for a
government-backed mortgage, and taxpayers would be on the hook.
Americans don't believe that's fair.
There has also been discussion about the voluntary nature of this
program. However, Federal Reserve Board Governor Randall Krozner said
in our committee, ``If Congress decides to move down this road, then it
should carefully consider the steps that should be taken to mitigate
moral hazard, avoid adverse selection, and ensure that the financial
interests of the taxpayer are adequately safeguarded.''
But if you listen to the chairman, this program isn't so voluntary.
At that same hearing, the chairman said, ``If we were to get this
approach adopted but we don't get much of a voluntary buy into this,
then I have to say the response will probably be more regulation than
people might like to see.''
He went on in an article quoted yesterday here in Washington to say,
``Meanwhile Chairman Frank has warned the mortgage industry that if it
doesn't support something like this plan this year, it could be in for
far more regulation next year.'' And that article went on: ``If after
this we continue to get very little participation by servicers, I can
guarantee you that the servicer industry will look very different . . .
If after everything we do in this cooperative way falls short, then you
are going to see legislation that puts some very real restrictions on
the role of servicers.''
All of a sudden, Mr. Speaker, this program doesn't sound so
voluntary. It seems to me that the chairman's comments will exacerbate
the moral hazard that the Federal Reserve Governor warned us against.
In addition to the incentives, the chairman provides in his
legislation for holders of mortgages, and they are real and enticing.
We have actual threats of harmful regulation if they don't sign up
dutifully for this program. That's not voluntary.
The SPEAKER pro tempore. The gentleman's time has expired.
Mr. NEUGEBAUER. Mr. Speaker, I yield the gentleman an additional 15
seconds.
Mr. PRICE of Georgia. I thank the gentleman.
I would suggest, Mr. Speaker, that these threats do no favors to the
American taxpayers across our country. The chairman is ensuring that we
will get full and active participation in this program, populated by
the riskiest of loans with enormous redefault rates and cost to the
American taxpayer of up to $300 billion. Mr. Speaker, that's
irresponsible and it's unwise.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 3 minutes to the
gentleman from North Carolina (Mr. Watt), member of our full committee.
Mr. WATT. Mr. Speaker, I was listening to this debate, and the only
thing I could be reminded of was a few years ago when I had a very,
very serious political campaign mounted against me and that had about
$800,000 spent on television ads telling people how terrible I was, and
at the end of the campaign, my mother finally called me and said, ``Are
you really that bad?''
I don't recognize the bill that's being described here on the floor.
Title II and title III we have overwhelmingly passed previously. Title
V was overwhelmingly passed out of the Financial Services Committee.
And all of the representations that are made about title I seem to me
to be just outrageously overstated.
Like FHA is going to assume all of this responsibility. This is a
bailout.
This is a voluntary program. FHA is not out soliciting any of these
loans. They will evaluate the credit worthiness of everyone who comes
to them.
Like this will cost $300 billion.
There's no way this program will cost $300 billion unless every
single person who gets involved in it defaults and we get nothing out
of a foreclosure or reclaiming of the property.
Like this is going to benefit speculators.
The bill explicitly says that this is limited to homeowners, not
people who have been speculators. I don't know what else we could say
on that. The language is absolutely explicit that only homeowners
qualify for this program.
[[Page H3299]]
Or maybe like the most outrageous one that I've heard today: Well,
the market will take care of this.
Well, the market is how we got here in the first place. If the market
had been taking care of this, we wouldn't be in this crisis. We
wouldn't be having the problem that we are trying to solve. And so this
notion that the market is somehow going to overnight correct itself and
we will solve this problem solely through market forces just doesn't
make a lot of sense to me. But, again, my mother started to question
after a while, after people said it over and over and over again. Maybe
my colleagues think if they say it enough, that this is terrible, they
will convince somebody.
Mr. NEUGEBAUER. Mr. Speaker, it is now my honor to introduce another
member of the Financial Services Committee, the gentleman from North
Carolina (Mr. McHenry), for 3 minutes.
Mr. McHENRY. Mr. Speaker, there are many good and decent people who
are in financial distress right now across this country. Some with
mortgages they can't afford. Some made poor financial decisions. Some
were victims of fraud. Some were simply speculators acting on their
instincts.
But the reality is that most borrowers are paying on time. They are
making their mortgages; 92 percent of borrowers are paying on time
across this country; 6 percent are late but not yet in foreclosure, and
2 percent are actually in foreclosure. This bill is directed to the 2
percent on the backs of the 98 percent. That means that 110 million
households are meeting their obligations. This legislation under
consideration today would require that those 110 million families bail
out the lenders on Wall Street. And I will tell you it's simply a case
of robbing Peter to pay Paul.
We are sending the message to financial institutions and Wall Street
investors that when those investors make poor choices and take ill-
advised risks that the Federal Government will step in and bail them
out. That's a bad decision. In fact, this is a $300 billion taxpayer
bailout that will cost the American taxpayer $5,000 for every
foreclosed loan that is dumped into the program. And make no mistake
about it. They will be dumped into the program. And it's not the
homeowners who will control this. It will be the lenders and servicers
who will decide to take advantage of this for their own personal
advantage, the servicers and the lenders.
The one thing that we know for sure is that those lenders and
servicers are only going to submit those loans that they don't believe
will pay. The American taxpayer will instead be punished. Ultimately,
the real losers are the American taxpayers who are left to guarantee
the loans that nobody else wants.
Mr. Speaker, in the past couple of months, I received several calls,
letters, conversations I have had with my constituents, talking about
the struggles that they are making in order to pay their mortgage. They
don't want to have to pay somebody else's mortgage. They are struggling
enough to make their ends meet with high gas prices, the rising cost of
health care. And I'm not advocating that we do nothing. In fact, I have
been working very hard in my district with foreclosure prevention
seminars, working with the Hope Now alliance, which has helped 1.4
million homeowners stay out of foreclosure, keep their homes.
These are the things that Congress should be doing, is helping
individuals get through this crisis. We shouldn't have a massive
bailout of lenders on Wall Street. We shouldn't bail out the servicers.
They took ill-advised risks, and as such, the losses should be carried
by them, not by my constituents who are paying on time.
Let's oppose this legislation and do what's reasonable and right for
the taxpayer.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to a very
hardworking member of the committee who contributed to this bill, the
gentleman from Florida (Mr. Mahoney).
Mr. MAHONEY of Florida. Mr. Speaker, I rise today in strong support
of the American Housing Rescue and Foreclosure Prevention Act.
I must say that I'm extremely disappointed that the President and
many of my friends on the other side of the aisle have expressed
opposition to this legislation. I think it's telling that Federal
Reserve Chairman Bernanke has expressed his support for the bill.
Mr. Speaker, the President and some of my Republican colleagues have
called this plan a bailout. Clearly, the party that claims to represent
big business doesn't understand business.
This plan requires current mortgage holders who choose to
participate, not taxpayers, to realize the loss of at least 15 percent.
And by putting homeowners in mortgages with rates and payments that we
know they can afford, we are minimizing the risk of future defaults.
And by doing so, we are injecting confidence and liquidity back into
credit markets, thereby taking an important step to ensure the economy
has the capital to begin digging ourselves out of this recession.
For anyone who calls this a bailout of risky investors, I would
invite them to come to my district and meet some of the thousands of
families who are in foreclosure. These are families with dreams and
hopes. They, like everyone in this room, were trying as best they could
to live the American Dream of homeownership. These are not frauds and
cheats. They are firefighters and teachers who were forced into the
subprime mortgage market in order to realize their dream.
The only moral hazard before us today would be our failure to act. If
we are to protect our economy, our families, and the American Dream of
homeownership, pass this amendment today.
Mr. NEUGEBAUER. Mr. Speaker, it is my honor to introduce another
distinguished member of the Financial Services Committee, the gentleman
from Illinois (Mr. Roskam), and I yield to him 3 minutes.
Mr. ROSKAM. I thank the gentleman for yielding.
Mr. Speaker, have I ever told you about my dog, Max? I don't think I
have. Let me just take a minute and tell you about Max.
Like a lot of us who are fathers of younger children, I have four
children, who approached me, Mr. Speaker, and begged me and begged me
and begged me to get them a dog. And for years I was able to avoid eye
contact and was able to keep an animal out of my house. But, finally,
in a moment of weakness, I said yes.
And a friend of mine, Mr. Speaker, realized what was happening, and
he pulled me aside and he said, ``Look, if you're going to get a dog,
realize this: You get what you pet.'' You get what you pet. So if a dog
comes in and it's disobedient and you pet that dog and give it all
kinds of affirmation, then guess what. It's going to keep being
disobedient. And not being very wise, we started to do that, and so now
we've got a slightly out-of-control dog.
Now, why do I mention Max? We're on the verge of doing that same type
of conduct exactly to people who have fundamentally made some bad
decisions. Let's take the borrowers aside, and I realize the chairman
has worked hard, but let's take the borrowers aside and just put them
in a different category because what we're going to be doing today, in
addition to helping borrowers, is really bailing out lenders. And I
don't think that's an overcharacterization. I don't think that's an
unfair way of looking at this. We are being told that lenders who were
in this, who are great advocates of the free market when they're making
money, they love the free market when they're making money, and now all
of a sudden, they are coming to the Federal taxpayer and saying this
has gotten a little bit more complicated than we thought, and now we
want the taxpayers to come in and take care of this from here out. It's
voluntary on the part of the lenders, and think about how voluntary
that would be. What a great invitation. These lenders go and they say
here's our pile of bad debt. Let's take a haircut, 85 percent of the
value, shove that off to the FHA, which is pretty ill equipped, I might
add, to take on this obligation--let's shove that off to the taxpayer,
and instead of getting our heads chopped off as lenders, we're just
going to get a haircut.
I think we can do a lot better, I think, over a period of time.
{time} 1500
There is a great willingness, Mr. Speaker, on this side of the aisle
to try and work creatively and to try and work substantively on
solutions. But I think as we reflect back on this, in the
[[Page H3300]]
chairman's own words, it is going to cost $5,000 for every defaulted
mortgage that is assumed by the FHA, times a half million. That gets us
to the $2.5 billion figure that makes many of us cringe.
And I don't think that those types of numbers should be allocated to
lenders and bailing out lenders who made bad decisions.
Mr. FRANK of Massachusetts. I yield 1 minute to the majority leader,
the gentleman from Maryland.
Mr. HOYER. I thank the gentleman for yielding.
This is not about petting dogs. This is about people who are hurting.
This is trying to reach out to people who have been savaged in many
ways by this economy and the policies that have led to an economy where
average working incomes are down $1,000 and where gasoline prices have
exploded over 200 percent from $1.46 to $3.56. I would remind you that
under the Clinton administration they went from $1.06 to $1.46, 5 cents
a year during the 8 years of the Clinton administration. They are going
up 5 cents a week during this administration.
People are stretched.
I didn't hear people come to this floor and say $30 billion for Bear
Stearns. It was outrageous, putting the taxpayers' money--Mr. Flake
says he did. Thirty billion dollars. We just talked about $2.5 billion
for literally tens of thousands, hundreds of thousands, perhaps as many
as 1 million people. There is a crisis, and they have asked us to
respond.
I want to congratulate the chairman of our committee. I want to thank
the ranking member of the committee. I want to thank all the members of
the committee for giving this their attention and trying to come up
with a solution that works. Was this a partisan, divisive solution?
Absolutely not. The Secretary of the Treasury has said that this is a
product that merits serious consideration.
For a time, I thought he was for it. I am not sure now. There seems
to be some internal division within the administration. Mr. Bernanke,
the head of the Federal Reserve, former chairman of the Council of
Economic Advisers, said that this is a good thing to do.
So, Mr. Speaker, today through this comprehensive landmark
legislation, the American Housing Rescue and Foreclosure Prevention
Act, this House is going to act not to pet dogs but to help people.
This House will take decisive action to keep hundreds of thousands of
families at risk of foreclosure in their homes and will help stabilize
the housing markets across the Nation that have been wracked by an
unprecedented drop in home values over the last 2 years.
Make no mistake: The slumping housing market has had negative,
rippling effects throughout our economy. It is not just people in
houses that are having problems, but the subprime crisis has affected
our entire country and the availability of credit. And thus it is
imperative that we take responsible, reasonable steps such as this to
strengthen our weak economy and ultimately benefit not just those who
are at risk of losing their homes, but every American.
As Federal Reserve Chairman Ben Bernanke pointed out in a speech on
Monday, Monday, just a few days ago, at Columbia University, ``High
rates of delinquency and foreclosure can have substantial spillover
effects on the housing market, the financial markets, and the broader
economy.''
And the answer is, don't pet your dog. It was bad behavior. Leave him
alone. Or punish him. What we want to do is help people do the right
thing.
He continued: ``Therefore, doing what we can to avoid preventable
foreclosures is not just in the interests of lenders and borrowers,
it's in everybody's interest.'' Those are Bernanke's words. Not
Chairman Frank's. Not mine.
Mr. Speaker, that is precisely what this legislation, the product of
hard work by Chairman Barney Frank and so many others, is designed to
do: Avoid preventable foreclosures.
There is little question that after an historic housing boom in the
first half of this decade we now are faced with a housing crisis.
Foreclosures soared to an all-time high in the last quarter of 2007.
According to Mortgage Bankers Association, more than 1.2 million
properties received foreclosure notices in 2007, up 75 percent from
2006. And 1 in 33 homeowners is projected to be in foreclosure over the
next 2 years. So much for a great economy.
This legislation, in short, will expand the FHA program so that
borrowers in danger of losing their homes can refinance into lower-
cost, government-insured mortgages that they can afford to repay.
I've heard so much talk about a family-friendly Congress. Family
values. Caring about children. What can be more family friendly than
keeping families in their homes? I think not too many things.
But to be clear, this bill will minimize taxpayer exposure. In fact,
the Congressional Budget Office estimates that the cost of putting
homeowners into affordable loans under the bill would be not $30
billion, not $20 billion, not $10 billion, but a total of $2.7 billion.
A few days in Iraq. A few days in Iraq. Not a month. A few days in
Iraq.
Contrary to the rhetoric coming from some, this bill is not a bailout
for irresponsible lenders or borrowers. Only primary residences are
eligible. Investors and lenders must take significant losses, as they
should. The owner of the old mortgage can only receive 85 percent of
the current value of the home.
And in return for an FHA guarantee on the mortgage, borrowers must
share with the government any profit from the resale of a refinanced
home. The government will only have liability if the borrower defaults
and the amount recovered in foreclosure is below the outstanding debt
still owed.
Furthermore, this legislation includes tax provisions to expand
refinancing opportunities and to spur home buying.
It increases the VA home loan limit for high-cost housing areas,
which we passed before, enabling veterans to have more homeownership
opportunities. We are having people come home from Iraq. We are going
to be talking about that. They may have lost their home because they
went to Iraq and they couldn't keep their home. This helps them get
back in a home.
And it includes FHA modernization provisions that have already passed
this House, as well as GSE reforms such as strengthening the regulation
of Fannie Mae and Freddie Mac and raising their loan limits to increase
liquidity in the mortgage market.
Chairman Frank has talked to Secretary Paulson about that. I have
talked to Secretary Paulson about that. I am sure many of you on your
side of the aisle have talked to Secretary Paulson about that. He
thinks this is absolutely essential.
I urge my colleagues on both sides of the aisle, let's mitigate the
effects of the bursting of the housing bubble. Let's prevent hundreds
of thousands, and perhaps up to 1 million people, from foreclosure and
allow American families to stay in their homes through this responsible
legislation.
Let's stabilize our housing market and help millions and millions of
homeowners who are not at risk of foreclosure, but whose neighbors are
at risk for foreclosure, and if they are foreclosed upon, will see
their home values deteriorate. So the assistance is not just to those
at risk of foreclosure, but to all those who are in communities where
homes are at risk.
Let's pass this comprehensive, bipartisan legislation today and work
to get it to the President's desk without delay. I am hopeful that the
President will see fit to sign it. Vote ``yes.'' Vote ``yes'' on the
American Housing Rescue and Foreclosure Prevention Act of 2008. Vote
``yes'' for the families of America.
Mr. HENSARLING. I yield myself 30 seconds.
As the distinguished majority leader said, this is about people
hurting. He should know. Since his Democrat majority came into office
almost 18 months ago, we know that we have a $3,000 per family tax
increase that has been approved, gasoline at almost $4 a gallon, milk
over $4 a gallon. Yes. This is about people hurting, particularly the
98 percent that rent, that have paid off their mortgages and whose
mortgages are current.
And if this bill is only going to cost the taxpayers $2.7 billion,
why do we see $300 billion written in the bill?
With that, I am happy to yield 2 minutes to the gentleman from
Arizona, Jeff Flake.
Mr. FLAKE. I thank the gentleman for yielding.
[[Page H3301]]
The gentleman from Massachusetts knows the respect I have for his
knowledge of free market economics. He often scolds us on this side of
the aisle when our rhetoric doesn't match our actions. And he is often
justified in doing so. I have heard him quote Adam Smith and Milton
Friedman with the best of them.
That is why I was baffled to see this bill come to the floor from his
committee, a bill that violates the same principles that he has
chastened us for not recognizing. He was right then. And he is
inconsistent and wrong today.
This bill has ``moral hazard'' written all over it. We know that a
party insulated from risk behaves differently than a party that is
fully exposed to risk. The truth is here we are insulating home buyers
and home owners from risk. And we will simply prolong the housing
crisis by doing so.
Let's be real here. The purpose of this legislation is to insulate
political parties from risk. That is what we are doing here. If we felt
such a need to intervene here, we ought to remember what we did last
September when I believe, if I remember right, we encouraged FHA to
give no-money-down loans. Why is it that we think that we are so
prescient here about what is going to happen?
We can't outguess the market. We shouldn't try to. We simply will
delay the bottom and delay and increase the dislocations that will
occur when its politicians decide to allocate resources and capital
rather than the markets.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself 30 seconds to
respond to the gentleman from Texas.
He says, why isn't the $2.7 written into the bill? It is, in effect,
because it is subject to appropriation, and no money will be spent
until that is provided. The $300 billion is the number of mortgages
that could be insured, up to that. We needed to put that number there
before CBO could tell us how much it would cost. And written into this
bill before it becomes law and becomes operational will be that $2.7
billion figure. That is the way the process works. You get a CBO score,
and then you pay for it.
I now yield 2 minutes to the gentlewoman from Illinois, a very
diligent member of our committee.
Ms. BEAN. Mr. Speaker, I rise to engage in a colloquy with the
chairman of the Committee on Financial Services.
Mr. Chairman, section 505 of title V of this legislation contains
language pertaining to the treatment of disabled veterans in the
bankruptcy code.
Every Member of the House supports ensuring that no disabled veteran
is discriminated against for obtaining federally supported housing
loans or subsidies.
Mr. Chairman, can you clarify for me why this provision was included
in the bill, and why we need to protect disabled veterans from
discrimination in this legislation?
Mr. FRANK of Massachusetts. If the gentlewoman will yield, I know
sometimes conspiracy theories rattle around this place. The reason we
put in the legislation to protect disabled veterans who had bankruptcy
from being excluded from this program is to protect veterans, disabled
veterans who have been in bankruptcy from being in this program. There
were people who suggested that the sensitivity people would have in
bankruptcy could be a problem. Now I will point out, by the way, that
thanks to some very good amendments by the gentleman from Georgia (Mr.
Marshall) who has dealt with this problem in a more general way, and he
is a bankruptcy expert--from the law side not the subject side. But we
thought with disabled veterans, we know this engenders prejudice when
people see in some cases people are disabled. So it was there for that
reason, to protect people, to make sure that we, the Federal
Government, would not, in any way, be discriminating against them and
maybe therefore set a good example for everybody else.
Ms. BEAN. Mr. Chairman, there have been reports suggesting that this
provision could be used as a placeholder for a broader expansion of the
Federal bankruptcy laws. Can you clarify that this language will not be
expanded in conference to include a broader re-write of the Nation's
bankruptcy laws or to be used in conference for any other redrafting of
language encompassed under title 11 of the U.S. Code other than this
specific provision?
Mr. FRANK of Massachusetts. If the gentlewoman will yield, absolutely
I can guaranty that. I should be clear. I am cosponsor of the bill that
would have provided a bankruptcy avenue for primary residences. That is
a separate issue as far as I am concerned. No, this particular
provision will not be a vehicle for that.
The SPEAKER pro tempore. The time of the gentlewoman from Illinois
has expired.
Mr. FRANK of Massachusetts. I yield the gentlewoman 30 additional
seconds.
{time} 1515
I guarantee this provision will only be what it is. If anybody wants
to move elsewhere, I might support that. But entirely separate from
this, this will not be a vehicle.
In fact, I think it would be dishonorable for anyone. We have had too
many examples of people trying to use veterans, and particularly
disabled veterans, as a political stick to achieve other objectives. I
would find that to be an absolutely outrageous procedure, and I can
guarantee you it will not happen.
Ms. BEAN. I thank the chairman for the clarification. I would also
like to commend your leadership on producing a balanced bipartisan bill
and allowing me to work with you during the committee markup.
The SPEAKER pro tempore. The time of the gentlewoman from Illinois
has again expired.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield the gentlelady from
Illinois an additional 30 seconds.
Ms. BEAN. Contrary to the earlier comments from our colleague in
Texas, I want to specifically acknowledge the inclusion of my amendment
to disallow participation in this program to anyone who had misstated
their incomes on their original loan or been convicted of mortgage
fraud.
On the whole, this legislation will help stabilize the housing market
and economy while not creating any uncertainty in legal contracts by
reducing risks to lenders who keep qualified borrowers in their homes
instead of foreclosing.
Mr. HENSARLING. Mr. Speaker, may I inquire how much time is remaining
on each side.
The SPEAKER pro tempore. The gentleman from Texas has 6\1/2\ minutes
remaining. The gentleman from Massachusetts has 26\1/2\ minutes
remaining.
Mr. HENSARLING. Mr. Speaker, I wish to reserve the balance of my
time.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to the
gentleman from Georgia (Mr. Marshall).
Mr. MARSHALL. Thank you, Mr. Chairman.
Mr. Speaker, I had originally planned to talk about something else
altogether, but it's the nature of the debate that causes me to simply
say I do view this as a bailout of sorts, but it's not a bailout for
the borrowers, it's not a bailout for the lenders.
If you understand the bill, you understand that actually the deals
that the borrowers get are not particularly good. The deals that the
lenders get are not particularly good.
This is intended, if it works, as a bailout generally for all those
innocent homeowners and taxpayers who have been dragged into this mess
in part, because of our failure to regulate previously, in part because
of the incompetence, virtually, the pitiful performance the of the
rating agencies.
As a result, an awful lot of people, and our economy, are being hurt.
I view, this personally, as a bailout for the economy, with an
incidental effect of avoiding foreclosures in individual cases--and
that's nice. It's nice to help people out--but I am not voting for this
thing because it's helping individuals out and happens to help a few
lenders out. It's not a bailout for those folks. In my view it's a
bailout for the entire economy and all of these people that have been
dragged into it.
Mr. HENSARLING. Mr. Speaker, I reserve the balance of my time.
Mr. FRANK of Massachusetts. I yield 3 minutes to the gentleman from
Texas (Mr. Al Green), a very active member of our committee.
Mr. AL GREEN of Texas. I thank the chairman for the time, and I thank
the chairman for his tireless efforts to bring this to the floor. I
question this moral hazard argument.
I question it because I have to ask myself, where was the moral
hazard
[[Page H3302]]
when we bailed out Penn Central? Penn Central got more than laissez
faire. Penn Central got more than market forces. Penn Central got $7
billion in a bailout.
Where was the moral hazard when we bailed out Lockheed Martin, $250
million? Franklin National Bank, $1.7 billion bailout. For the good of
the country, we bailed out Chrysler at the tune of $1.5 billion;
Continental Illinois, $4.5 billion; Farm Credit System, $4.5 billion;
First Republic Bank, $1 billion. Major airlines got $5 billion, the
steel companies got $7 billion.
Where was the argument about Bear Stearns that was never brought to
the floor? I have heard about a letter that has been circulated. Why
didn't you bring the argument to the floor? Let's talk about the Bear
facts, the Bear Stearns facts. Bear Stearns got $29 billion in a
bailout and a $13 billion loan.
So if you really talk about the Bear facts, the Bear Stearns facts,
you are talking about $42 billion. We live in a world where it is not
enough for things to be right, they must look right.
It doesn't look right for this country to continually bail out major
corporations. When the American people, little people as we sometimes
call them here--they are big in my heart--but the little person needs
some help, we don't find it within our hearts and our power to help
them.
We have the ability to make a difference in the lives of people
today. This is why I am encouraging my colleagues to vote for this
bill.
Mr. HENSARLING. Mr. Speaker, I continue to reserve.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to the
gentleman who helped put this bill together, the gentleman from
California (Mr. McNerney).
Mr. McNERNEY. Mr. Speaker, I represent Stockton, California, which
unfortunately has the highest foreclosure rates in the country. Many
families in northern California have lost their homes and the
foreclosures have lead to personal hardships, community instability and
national economic risk.
When my constituents asked me what Congress was doing to fix the
economy, I told them we are pushing to create family-wage jobs and put
money back in people's pockets. Today we are building on these efforts
by considering legislation that will provide fiscally responsible
options for families struggling to stay in their homes.
Last December I hosted a workshop for foreclosures in Stockton with
my colleague, Dennis Cardoza, to provide housing counseling to local
families. While we expected the turnout to be high, participants
started lining up 2 hours early and, ultimately, more than 500 people
showed up.
I heard heart-breaking stories from my constituents, and this is just
one single illustration of why today's legislation is so important. One
of the biggest challenges facing the housing market is in the high-cost
States, like California, that housing programs have not kept pace with
the times. Unrealistically low limits for Fannie Mae, Freddie Mac and
FHA mean people living in the high-cost States have not fully benefited
from these programs.
The economic stimulus package, temporary loan limit increase to
$730,000, raising the loan limit, injects liquidity into the mortgage
market to provide access to credit and opens new opportunities for
refinancing.
However, since these increases are only temporary, it is clear that
making them permanent will have beneficial effects for the housing
market. I introduced the Homeowner Opportunity Act to permanently raise
the loan limits, and I am pleased that today's legislation includes my
bill.
I want to thank Chairman Frank for all of his support and assistance.
This change will benefit my constituents and the entire country.
Mr. NEUGEBAUER. Mr. Speaker, I continue to reserve.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to a very
active member of the committee, the gentleman from Colorado (Mr.
Perlmutter).
Mr. PERLMUTTER. I just want to thank you and the committee for
bringing a very focused piece of legislation to the House floor.
Mr. Speaker, to my friends from Texas, who have heard stories that
this is a bailout, this is no bailout. This is about Strasbourg,
Colorado, where there have been foreclosures around a neighborhood, and
one person trying to sell their property can no longer do that because
the value of their house is less than their mortgage. They are
innocent. They didn't deserve this.
Secondly in Edgewater, Colorado, where the lender, the appraiser and
the building owner got into cahoots, and a young couple buys a
condominium, and now the properties around them are foreclosed. They
are going to lose this property. They need assistance. They are
innocent. They deserve some help from this government.
Same thing in Commerce City, Colorado. I heard all of these stories
last night on a telephone town hall meeting while we were debating the
Neighborhood Stabilization Act. That's what this bill is about. It's
about the community as a whole.
Mr. Marshall from Georgia understands what this bill is about. It's
about looking after our neighborhoods and protecting our neighborhoods
and averting 500,000 foreclosures across this country.
Our neighborhoods, our cities, our towns are going to pay for this if
the Federal Government doesn't assist in some fashion. This is a
nationwide problem. The Nation has to stand up. We have to deal with
this. This bill does it in so many ways, and I just appreciated coming
to the floor.
Vote ``yes'' on this bill.
Mr. NEUGEBAUER. Mr. Speaker, I continue to reserve my time.
Mr. FRANK of Massachusetts. Mr. Speaker, I now yield 2 minutes to the
chairwoman of the Housing Subcommittee, who makes her second appearance
today, having carried through passage of a very important bill earlier
today, the gentlewoman from California (Ms. Waters).
Ms. WATERS. I would first like to thank our chairman, Barney Frank,
for the leadership that he has provided on dealing with a serious
problem in America. I would like to thank the Members once more for the
support that they gave me on the Neighborhood Stabilization Act that we
passed today. That, coupled with what is being done now, will go a long
way to providing real assistance to our cities, to our counties, to our
States and to our citizens.
I know that it has been said over and over again today that people
are suffering, that there are people who got into these loans that did
not understand what a no-doc loan, a no interest rate loan was, an ARM
that was going to reset within 6 months, 1 year or 2 years, and that
the mortgage would double, triple or quadruple.
They are innocent, hardworking Americans out there every day who
simply want to live the American Dream. Many of them were steered into
these loans because there was this big, big housing bubble.
We had these local initiators of loans through our banks and our
mortgage brokers who discovered that they could package them, they
could securitize them, they would be invested in Wall Street, and the
Wall Street people invested mightily in them, and now the services have
them all. The only thing that the services can do is foreclose on these
properties.
Well, we can do something about it. I don't know why we have to argue
and fight about whether or not we can help the American people. They
sent us here to look after their best interests.
I don't understand why anybody can call this a bailout when, in fact,
nobody has said anything about the bailout of the almost $30 billion
for Bear Stearns. If we can help Wall Street, we certainly can help the
people who vote for us every day and who sent us here.
We help people all over this Nation in different ways. Some people
are confronted with a hurricane, or a flood or an earthquake. American
citizens expect us to be there for the citizens when we are needed in
different ways. This is a different way.
I ask everyone to support the bill.
Mr. NEUGEBAUER. Mr. Speaker, it's my honor now to yield 2 minutes to
the gentlewoman from Virginia (Mrs. Drake), who has an extensive amount
of experience in the housing industry and brings great expertise to
this process.
Mrs. DRAKE. Mr. Speaker, housing is a very complex issue. We are
talking about a person's home, real people with a real problem. Prior
to Congress I was a realtor for over 20 years.
[[Page H3303]]
I have worked with many families to help them realize their dream of
homeownership. I have served as chairman of the Virginia Housing Study
Commission. I have seen good markets and bad and many changes to the
mortgage industry. I have struggled with how to define and protect
against predatory lending practices. I have seen interest rates and
loan products that seem too good to be true.
Unfortunately, we have seen they were too good to be true. There are
many components of this bill, which I think are excellent. Enacting
those reforms now would have a huge impact on the housing market and be
helpful to American families.
My concerns with today's package include the establishment of a new,
affordable housing fund and a $300 billion Federal loan guarantee
program. A lender with troubled loans could contact those homeowners,
offer a federally backed loan and refinance at a loss.
But now he has moved that loan from a complete loss to 85 percent
current value that will be guaranteed by the Federal Government. He now
has no reason to work with that borrower. Neighbor A bought at the
height of the market. He struggles but pays. Neighbor B negotiates 85
percent of current value, a huge impact on the value of surrounding
properties.
This is a voluntary program. Can't we develop incentives for the
private sector and not obligate the American taxpayers with $300
billion in loan guarantees? There are several things that are currently
making a difference. The FHA Secure loan program, HOPE NOW, an alliance
to prevent foreclosure through outreach to delinquent borrowers. Fannie
Mae is currently working on a streamlined short-sale program to allow
the sale of properties that are overmortgaged.
{time} 1530
The fact is, one out of two people never contact their lender for
help. Both the administration and the private sector need to explain
what is available. Neither has done a good job.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to the
gentleman from Pennsylvania (Mr. Sestak).
Mr. SESTAK. Mr. Speaker, much has been said about how we got into
this situation, although someone said it best, I thought: too little
oversight, too much greed, too little understanding.
But there are several things we do understand. There is no single
cause for why we got into this housing crisis, so there is no single
solution.
But second, we must act now. This March, there was a 57 percent
increase in the number of defaults than the previous March a year ago.
And of all of the adjustable rate mortgages that will be reset this
year to a higher interest rate, 80 percent are the subprime category.
Those subprime categories are at a delinquency twice that of a fixed
rate. In short, even before the interest rates go up, we have so many
people who are already in trouble with their loans.
Third, and most importantly, this is not just about the homeowner or
the mortgage lender, this is about all of us. What we have seen is not
just harming the housing and manufacturing industries, it has seeped
over into the bond market for municipal bonds and even for education to
where, because of the exposure of bond insurers, we cannot have bonds
that are being given in these categories. So, therefore, I think very
highly of this bill.
I think this bill is done in the right way. It is providing relief to
actual, real people, those living in homes, not speculators. Second, it
steps over and it doesn't give any bailout to lenders. It says you must
write down your loans and you must pay into a reserve fund and do
closing costs.
Most importantly, it has the government reaping the rewards when the
houses inevitably go back up in value. I think this is great for the
economy.
Mr. Speaker, I would ask one thing to consider as we go forward. I am
taken by incentivizing people to come forward. And as someone on the
other side said, incentivizing them even by being exposed to more risk.
The CBO said that out of the 2.8 million foreclosures expected to occur
if nothing happens between now and 2013, about 500,000 loans will be
refinanced.
CBO believes that many original and secondary lenders will be
reluctant to participate.
This is a problem that must be addressed. To be most effective, I
believe that there must be greater incentives for the original lien
holders--who take the haircut up front--to have the option to share in
some portion of potential profits on resale.
For those lenders willing to take a bigger piece of the risk upfront
(beyond the 85 percent of current market value limit in the bill),
there should be added incentive to participate in the upside potential.
Overall, I support this bill because it addresses many of the issues
that need to be solved quickly. But I believe that more needs to be
done to provide proper incentives to ensure that lenders, who will play
a critical role in the economic and housing recovery, will fully
participate, and I am prepared to work with the Chairman and House
leadership for an appropriate resolution.
Mr. NEUGEBAUER. Mr. Speaker, I continue to reserve.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to the
gentleman from Texas (Mr. Hinojosa).
Mr. HINOJOSA. Mr. Speaker, I rise today in strong support of the
underlying bill, H.R. 3221, the American Housing Rescue and Foreclosure
Prevention Act of 2008, and in particular H.R. 5830, the FHA Housing
Stabilization and Homeownership Retention Act of 2008, which is part of
this housing rescue package.
I am proud to be a cosponsor of H.R. 5830. I believe that it is a
well-balanced measure that will go a long way towards turning around
the housing crisis and address the issues that have resulted in a
nationwide economic crisis.
Mr. Speaker, I am especially pleased with title II of the bill which
establishes a long-needed Office of Housing Counseling within the
Department of Housing and Urban Development. I commend Chairman Frank
and Ranking Member Waters for including it in their bill.
I sincerely appreciate the fact that community-based organizations
with expertise in the field of housing counseling will be given a voice
in the development of such policies. I am pleased that the bill
provides for the building of capacity to provide housing counseling
services in areas that lack sufficient services such as large parts of
my district in the Rio Grande Valley and in rural America in general.
Moreover, I applaud Chairman Frank and Congresswoman Waters for
including in the bill the authorization of $3 million for public
service announcements as part of the act's national public service
multimedia campaign. This campaign will help persons facing mortgage
foreclosure, elderly persons, persons who face language barriers, and
low-income persons.
I want to take this opportunity to thank them for increasing the
availability, affordability, and quality of housing in rural America.
And I believe this bill will do more of the same.
Mr. Speaker, I believe the product Chairman Frank and Congresswoman
Waters have brought to the floor will result in more homeowners
remaining in their homes and help stabilize the housing market. I
strongly urge my colleagues to vote in favor of this bill.
Mr. NEUGEBAUER. Mr. Speaker, may I inquire as to the time remaining.
The SPEAKER pro tempore. The gentleman from Texas has 4\1/2\ minutes
remaining. The gentleman from Massachusetts has 13\1/2\ minutes.
Mr. NEUGEBAUER. Mr. Speaker, I continue to reserve.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to the
gentleman from Oregon (Mr. Wu).
Mr. WU. Mr. Speaker, last year 1.5 million American households
entered foreclosure, and this year the number of American families in
danger of losing their homes could be as high as 2 million. These
foreclosures could reduce overall economic activity by $166 billion
this year as the effects of the mortgage crisis spill over into other
sectors of the economy.
In my State of Oregon, the foreclosure rate among subprime borrowers
increased by 28 percent in the fourth quarter of 2007. Over 5,000
Oregon families are currently in foreclosure, more than half of whom
hold subprime mortgages.
But this debate is not about facts and statistics. If it were, it
would be over by now. By requiring that the holders of debt take a
haircut down to 85 percent of current market value, we are
[[Page H3304]]
sharing the pain. By requiring that people who are working in order to
be eligible for this program are paying at least 35 percent of their
income in order to be eligible, we are exercising responsibility.
What this debate is really about is a matter of values. The values
being expounded on the other side of this debate are absolutely
astounding, and nothing illustrates it better than a movie I love,
``It's a Wonderful Life.'' George Bailey was the hero of that movie,
and he was dealing with a hard-hearted old man named Mr. Potter. Mr.
Potter said to George Bailey as he was trying to save American
households, ``Have you put any real pressure on these people to pay
their mortgages?''
And George Bailey relied, ``Times are bad, Mr. Potter. A lot of these
people are out of work.''
``Then foreclose.''
George Bailey answers, ``I can't do that. These families have
children.''
``Not my children,'' said Mr. Potter.
Well, what we hear from the other side is: not my children, these
folks are irresponsible, throw them out.
We clearly have the upper hand in this debate.
Mr. NEUGEBAUER. Mr. Speaker, I continue to reserve.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1 minute to the
gentlewoman from California (Ms. Lee).
Ms. LEE. Mr. Speaker, let me thank Chairman Frank and Chairwoman
Waters for bringing this badly needed legislation to the floor today.
Millions of families in America are seeing their dream of homeownership
turning into a nightmare. Foreclosure rates have reached crisis levels.
In California and in many parts of my district, too many families are
facing devastation, and entire neighborhoods are on the brink of
collapse.
Homeownership has been the primary means that most Americans have to
accumulate any kind of wealth, to send their kids to college, to start
a small business, or to do whatever they want to do to be part of the
American dream.
I want to thank Chairman Frank for including language in this
legislation which I introduced with Senator McCaskill to address the
Reverse Mortgage Proceeds Protection Act which protects seniors from
losing their homes.
We are beginning to see some of the same abuses in the advertising
and high-pressure sales of reverse mortgages as we saw in the subprime
mortgage crisis. These provisions will ensure that vulnerable seniors
are fully informed of hidden costs and pitfalls of reverse mortgages
before they sign.
Mr. NEUGEBAUER. Mr. Speaker, it is my honor to introduce the
gentlewoman from Tennessee (Mrs. Blackburn) who is also on the
Committee on Financial Services, and I yield 2 minutes to her.
Mrs. BLACKBURN. Mr. Speaker, I heard from one of my constituents who
said they felt like this bill was not really about rescuing homeowners,
they felt like it was another attempt at wealth redistribution. They
felt that the risk and the costs that are borne and should be borne by
irresponsible lenders, investors, and borrowers are going to end up
being transferred to the Federal Government and thereby to the American
taxpayer once again. And this time, it is to the tune of $300 billion.
What the bill does is the good actors, the 92 percent of all mortgage
holders who are paying their mortgage on time, they are going to end up
being liable for the irresponsible actions of lenders and speculators.
The way my constituencies see it, this is a risky business. This
Congress should not send a message that it is acceptable to give up on
an obligation because you're going to have a government buyout or a
bailout and you are going to be able to cut your personal losses.
Last week I did a seminar in my district. I worked with some
government and private sector initiatives such as Hope Now, working to
help homeowners weather the storm, to get the information to them that
they needed.
Mr. Speaker, that is what we should be doing, educating homeowners on
the options at their disposal, as opposed to passing measures that
reward recklessness and provide a safety net for irresponsibility.
Congress does not need to bail out the housing market, it needs to
encourage a kick start. I hope that my colleagues will join me and that
together we will vote this bill down.
Mr. FRANK of Massachusetts. I yield 2 minutes to another very active
member of our committee who has been very active on the loan issue, the
gentleman from California (Mr. Sherman).
Mr. SHERMAN. Mr. Speaker, the facts are these: Homeowners have signed
mortgages where they can't afford to make the payments, especially as
they are adjusted upwards. We need to write-down the principal amount
to something that these good homeowners can afford. But we are told
``don't bail out the lenders.''
There are two ways to write-down the principal amount of a loan: an
involuntary way through the bankruptcy court, and we had a bill before
this House which authorized the bankruptcy court in very limited
circumstances, very tailored, to write-down the balance of the loan.
Don't bail out the lender, just tell the lender they have to take less.
That bill is not going to pass. It is opposed by Republicans in the
Senate.
The second way is a voluntary way. You make a fair offer to the
lender that, if they will write-down the principal amount, then they
will get a guarantee of that lesser amount from the government--so at
least they will get paid something. Now we are told to vote against
this bill because it bails out lenders.
Some are giving hypocrisy a bad name.
If you are going to help homeowners, you have to write-down the
balance of the loan. And people come to this floor and they say well,
we can't do it the voluntary way, and we can't do it the involuntary
way; but just as soon as we find some other way, they will be happy to
bail out homeowners.
The fact is they have voted against using the bankruptcy court to
write- down the principal amount and not give the lenders anything. And
now they are saying when we make a fair offer to the lenders to do the
same thing, we are bailing out the lenders.
I have a lot of ``respect'' for anybody who can come to this floor
and just say they don't want to help these homeowners at all. That's an
honest position. But to say you are against the voluntary and
involuntary, that's wrong.
Mr. FRANK of Massachusetts. I have one request for a unanimous
consent, and then I'm going to close, so I would yield to the
gentlewoman from New York for a UC.
(Mrs. MALONEY of New York asked and was given permission to revise
and extend her remarks.)
Mrs. MALONEY of New York. I thank the gentleman for yielding to me
and for his extraordinary leadership on this extremely important
housing stimulus package. It is good for the country and good for my
constituents in New York City. I strongly support it.
Mr. Speaker, I rise in strong support for this Housing Stimulus
Package.
It is good for our country and it is good for my constituents in New
York.
We all know we are facing a housing crisis.
Foreclosures are at record highs, wages are stagnant and the markets
continue to be volatile.
This housing package will help restore order and provide the roadmap
forward.
In addition to the $300 billion voluntary program that would permit
FHA to provide up to $300 billion in new guarantees to help refinance
at-risk borrowers into viable mortgages, we are doing a number of
things to help the mortgage market.
We are making permanent the current FHA and GSE loan limits we passed
as part of our first stimulus package.
Without this limit, the FHA limit in New York City would drop from
$729,750 to $362,000 and the Fannie Mae/Freddie Mac limit would drop
from $729,000 to $417,000.
This bill modernizes the reverse mortgage provision administered by
FHA, allowing co-ops to be included for the first time.
We are preserving affordable FHA-insured foreclosed multifamily
projects. Including language important to New York City.
This bill includes an amendment I offered that will provide for
higher loan limits on homes that include a licensed child care
facility.
This bill is needed. It helps our communities and I urge its
adoption.
Mr. FRANK of Massachusetts. I intend to close with our remaining time
as our last speaker.
Mr. NEUGEBAUER. Mr. Speaker, I rise in strong opposition to this
bill. I
[[Page H3305]]
think we have had a good discussion here today. Unfortunately, it was a
discussion only and there was not opportunity for our side, or really
any other Members to participate in this process of offering amendments
that could have most likely made this a better piece of legislation.
There are several reasons I oppose this bill. Number one is the
flawed process. In my tenure in Congress, I have never had a major
piece of legislation like this where I am not even going to get an
opportunity to cast my vote. I know people who are watching this
process are wondering, you mean we have been talking all day about this
important piece of legislation that the other side says is very
important to the American people, yet their Member of Congress is not
going to get a vote on this process. It is a flawed process.
We brought an energy bill over, stripped all of the energy provisions
out of it, and we are putting housing into an energy bill. I still
don't understand the mechanics of that, and maybe someone later on can
explain that to me.
This is also about not saddling the American people who are already
struggling to make their own house payments, to make their own rental
payments, to pay the highest gasoline prices in the history of this
country, and the highest electricity costs and natural gas costs, it is
about saddling them now with the payments for their neighbor.
What the 110 million people who are doing the best they can and want
the United States Congress to do is to leave them alone and really
start addressing the major issues that are important to the American
people.
{time} 1545
It's about not rewarding bad behavior. We have some lenders, and we
have some borrowers that went out and bet that the housing market was
going to go up. It didn't go up, and, in fact, unfortunately, in some
places, it went down. And now people are faced with a negative equity
or a smaller equity in their home. And we are sympathetic to that.
As I said earlier, I've been in the real estate business for a very
long time. I've seen the markets go up. I've seen the markets go down.
And sometimes it causes a situation where people don't have as much
equity.
But what you have to understand is a lot of people went into this
process with no equity. And now this bill says, you know what? We've
got a deal for you, because now we're going to help create equity in
your house by putting your neighbors at risk.
This is a bad bill. I encourage Members to vote against this bill.
I'm sorry. We can't vote against it. Vote against the amendments.
Mr. FRANK of Massachusetts. How much time is there remaining, Mr.
Speaker?
The SPEAKER pro tempore (Mr. Jackson of Illinois). The gentleman from
Massachusetts has 8\1/2\ minutes remaining.
Mr. FRANK of Massachusetts. Mr. Speaker, I understand the complaints
about the process. Remember, though, that several of the bills being
reenacted today have already been fully debated and amended on the
floor. There is one that was not subject to the normal--and I'm a
general defender of the normal--process. It's the FHA rescue bill.
And I will say, in this case, I think it is fair to ask Members to
vote for it up or down. It is a very interrelated piece of legislation.
It tries to balance cost and incentive. It would be easy to put it out
of whack. And in this one case I think it is fair to say you can vote
it up or you can vote it down. Members will have a chance to vote on
it. While it's in the form of an amendment, if that amendment is
defeated, it dies.
I also want to address the issue of the amendment offered by the
gentleman from North Carolina and the gentleman from Ohio regarding
preemption, because there may be some confusion.
I personally spoke, today, with representatives of the banking
organizations, the American Bankers Association, the Independent
Community Bankers, and the Mortgage Bankers. They took the position
that if we were able to adopt the language offered by the gentleman
from Ohio, they would find this a bill that they would accept and would
not seek to defeat.
Because of an objection, we weren't able to do this, so technically,
yes, they had previously said they were opposed to it in that form.
They have also said, after we outlined the procedure that was followed
by the gentleman from Ohio (Mr. LaTourette), the gentleman from North
Carolina (Mr. Miller) and myself, that it is now acceptable; that is,
while we were blocked by an objection from adopting the actual
language, the language that was agreed to by them, by the Attorneys
General, by the State bank supervisors, by advocacy groups, will be the
language that's in the bill. So let there be no doubt about that. There
is no substantive objection to what will happen.
Now, let me talk about the bill. I guess I want to, not damn my bill
today with faint praise, but support it. It comes from the economists.
Now, the gentleman from Arizona (Mr. Flake), for whom I have a great
deal of respect, a man of very high intellectual integrity, he chided
me because I have taken a free market position, but not here. And I'll
respond this way.
I have opposed systemic interventions in the market. I think it is
generally unwise for us to enact legislation which, in an ongoing way,
displaces the market. But that's not what we do here. There is a part
of the reality of the market that is called market failure. People have
won Nobel Prizes, Joe Stiglitz, for work about market failure. Clearly
there has been market failure with regard to mortgages. The market
failure was the breaking of the lender-borrower relationship and the
substitution of securitization without appropriate countervailing
incentives.
This bill today is no ongoing intervention in the market. It is time
limited, and limited in specifics to a subset of mortgages. It seeks to
undo, to some extent, to mitigate a market failure. It will leave the
market, I believe, stronger going forward.
So I accept the gentleman from Arizona's reminding me that I should
stay true to free market principles. This bill is true to free market
principles.
And let me quote one of the leading advocates of free market
principles in the English-speaking world, the Economist, called to my
attention by the staff of the Financial Services Committee, which has
done enormously good work in substantively putting this bill together,
and in listening to me talk about it in various ways. And I appreciate
both aspects of that.
Here's what the Economist said: ``The plan is hardly a bailout,''
talking about this bill. This is a current Economist. ``Lenders would
have to write down their loans to 85 percent of the current value of a
house.'' By the way, under FHA Security Administration's plan, they can
get a 100 percent loan put in. They can get somebody who's defaulted
and get them a 100 percent loan. We require an 85 percent writedown to
the value.
``Borrowers would pay a fee for the insurance and give up a share of
any later price rise to the government.'' By the way, they would also
be barred for 5 years from taking out a second mortgage. So the
borrowers under this, if there was an increase in equity, would have to
share much of it with the Government, and the earlier in the process in
which they sold out, the more the Government would get. That's not the
bailout that people have described.
People worry about moral hazard. I would assure people, no borrower
who goes through this process will say at the end of it, ``Boy, that
was fun. Where do I buy a ticket to get back on Space Mountain?'' They
will be deterred.
But we're not relying solely on this. Two-thirds plus of this House,
many of my Republican colleagues didn't do it, but many of my
Republican colleagues did. We voted for a bill to regulate subprime
mortgages going forward. We're not simply relying on people's bad
experience. We have put some restrictions on that.
I believe this is pro-market. The markets now are in trouble because
a lot of people who were very smart bought things they shouldn't have
bought, including subprime mortgages. And having bought things they
shouldn't have bought, they now don't want to buy things they should
buy.
We all know the little story about the child who touches the hot
stove,
[[Page H3306]]
and having touched a hot stove and being burned, won't go near the
stove. We have investors today who, having touched the hot stove, are
staying away from the refrigerator, the sink and the shower because
they have been so badly burned.
If we do not adopt appropriate responses to this market failure, we
will not cure it, and the lag in investments will continue.
We are working through the market here. It is voluntary that a lender
says we're going to cut it down. People say, well, they'll dump all
their bad loans. Have the Republicans who say that, because many
Republicans are with us, so little confidence in the FHA?
Nothing in this bill coerces the FHA to accept a single loan that it
finds unlikely to be repaid. And CBO accepts that, because they say of
500,000 loans that they expect to be accepted, the failure rate will
be, average out to $4,800 per loan. Do you really think if the loan
failed it would only cost us $4,800?
That figure, that $2.4 billion is CBO saying that there won't be many
failures because of the criteria that are in this bill.
And people have said, what about the people who paid their mortgages?
Well, if they live in a neighborhood where there is foreclosure,
they're getting hurt. If they live in a city where the property tax
revenues are going down, they're getting hurt. And if they live in
America, they are in the midst of a recession in which we are losing
jobs when we should be gaining them, in which real wages have been
pulled down, and the single biggest cause of this recession is the
subprime crisis and its reverberations.
This is a rare case of a microeconomic factor causing a macroeconomic
problem. And the market got us into this. And we don't say junk the
market. And I know people who have said, oh, the market's way too
smart. And people have said to me, you know, some smart people don't
agree with this proposal. Well, I agree with that.
But I also have to note that no dumb people got America into this
problem. You had to be really smart to understand collateralized debt
obligation derivatives. And the problem is that we need to restrain
some of their instincts and let the market function again. And it
simply will not happen if you simply let it go.
Here's what we say. And, by the way, I supported Hope Now when it
came out. But Hope Now had a flaw. It was based on the notion--Members
don't even pay attention to this--it was based on the notion that the
problem was when the mortgage reset to a higher rate under adjustable
rate mortgages, that would be the problem. That hasn't been the
problem.
The problem has been people who owe more than the loan is worth. Some
of them were irresponsible in the first place. Some of them made the
mistake that almost everybody else made of not foreseeing the depth of
the drop in house prices. So Hope Now has been overtaken by events.
We here are responding to reality in a way that is pro-market and
minimizes the outlay. I hope the bill is passed.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 1175, the previous question is ordered.
The question of adoption of the motion is divided among the three
House amendments.
The first portion of the divided question is: Will the House concur
in the amendment of the Senate with House amendment No. 1 printed in
House Report 110-622?
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. NEUGEBAUER. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule
XX, this 15-minute vote on concurring in the Senate amendment with
amendment No. 1 will be followed by 5-minute votes on concurring in the
Senate amendment with amendment No. 2, concurring in the Senate
amendment with amendment No. 3, adopting the motion to instruct offered
by Mr. Flake, and adopting the motion to instruct offered by Mr.
Cantor.
The vote was taken by electronic device, and there were--yeas 266,
nays 154, not voting 13, as follows:
[Roll No. 301]
YEAS--266
Abercrombie
Ackerman
Allen
Altmire
Andrews
Arcuri
Baca
Baird
Baldwin
Barrow
Bean
Becerra
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Boren
Boswell
Boucher
Boyd (FL)
Boyda (KS)
Brady (PA)
Braley (IA)
Brown, Corrine
Brown-Waite, Ginny
Buchanan
Butterfield
Capito
Capps
Capuano
Cardoza
Carnahan
Carney
Carson
Castle
Castor
Cazayoux
Chandler
Clarke
Clay
Cleaver
Clyburn
Conyers
Cooper
Costa
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
DeFazio
DeGette
Delahunt
DeLauro
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Dingell
Doggett
Donnelly
Doyle
Edwards
Ehlers
Ellison
Ellsworth
Emanuel
Engel
English (PA)
Eshoo
Etheridge
Farr
Fattah
Filner
Foster
Frank (MA)
Gerlach
Giffords
Gilchrest
Gillibrand
Gonzalez
Gordon
Graves
Green, Al
Green, Gene
Grijalva
Hall (NY)
Hall (TX)
Hare
Harman
Hastings (FL)
Hayes
Heller
Herseth Sandlin
Higgins
Hill
Hinchey
Hinojosa
Hirono
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (GA)
Johnson, E. B.
Jones (NC)
Jones (OH)
Kagen
Kanjorski
Kaptur
Keller
Kennedy
Kildee
Kilpatrick
Kind
King (NY)
Kirk
Klein (FL)
Knollenberg
Kucinich
LaHood
Lampson
Langevin
Larson (CT)
LaTourette
Lee
Levin
Lewis (GA)
Lipinski
Loebsack
Lofgren, Zoe
Lowey
Lynch
Mahoney (FL)
Maloney (NY)
Markey
Marshall
Matheson
Matsui
McCarthy (NY)
McCollum (MN)
McCotter
McDermott
McGovern
McHugh
McIntyre
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (NC)
Miller, Gary
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Moran (VA)
Murphy (CT)
Murphy, Patrick
Murphy, Tim
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Perlmutter
Peterson (MN)
Pomeroy
Porter
Price (NC)
Pryce (OH)
Rahall
Ramstad
Rangel
Reichert
Rodriguez
Rogers (MI)
Ros-Lehtinen
Ross
Rothman
Roybal-Allard
Ruppersberger
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schwartz
Scott (GA)
Scott (VA)
Serrano
Sestak
Shays
Shea-Porter
Sherman
Shuler
Sires
Skelton
Slaughter
Smith (NJ)
Smith (WA)
Snyder
Solis
Souder
Space
Speier
Spratt
Stark
Stupak
Sutton
Tauscher
Taylor
Thompson (CA)
Thompson (MS)
Tierney
Towns
Tsongas
Turner
Udall (CO)
Udall (NM)
Upton
Van Hollen
Velazquez
Visclosky
Walsh (NY)
Walz (MN)
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Wexler
Wilson (OH)
Woolsey
Wu
Wynn
Yarmuth
Young (FL)
NAYS--154
Akin
Alexander
Bachmann
Bachus
Barrett (SC)
Bartlett (MD)
Barton (TX)
Biggert
Bilbray
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehner
Bonner
Bono Mack
Boozman
Boustany
Brady (TX)
Broun (GA)
Brown (SC)
Burgess
Burton (IN)
Buyer
Calvert
Camp (MI)
Cannon
Cantor
Carter
Chabot
Coble
Cole (OK)
Conaway
Crenshaw
Cubin
Culberson
Davis (KY)
Davis, David
Davis, Tom
Deal (GA)
Doolittle
Drake
Dreier
Duncan
Emerson
Everett
Fallin
Feeney
Ferguson
Flake
Forbes
Fortenberry
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gingrey
Gohmert
Goode
Goodlatte
Granger
Hastings (WA)
Hensarling
Herger
Hobson
Hoekstra
Hulshof
Hunter
Inglis (SC)
Issa
Johnson (IL)
Johnson, Sam
Jordan
King (IA)
Kingston
Kline (MN)
Kuhl (NY)
Lamborn
Latham
Latta
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas
Lungren, Daniel E.
Mack
Manzullo
Marchant
McCarthy (CA)
McCaul (TX)
McCrery
McHenry
McKeon
McMorris Rodgers
Mica
Miller (FL)
Miller (MI)
Moran (KS)
Myrick
Neugebauer
Nunes
Paul
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Price (GA)
Putnam
Radanovich
Regula
Rehberg
Rogers (AL)
Rogers (KY)
Rohrabacher
Roskam
Royce
Ryan (WI)
Sali
Saxton
Scalise
Schmidt
Sensenbrenner
Sessions
Shadegg
Shimkus
Shuster
Simpson
Smith (NE)
Smith (TX)
Stearns
Sullivan
Terry
Thornberry
Tiahrt
Tiberi
Walberg
Walden (OR)
Wamp
Weldon (FL)
Weller
Westmoreland
Whitfield (KY)
Wilson (NM)
Wilson (SC)
Wittman (VA)
Wolf
Young (AK)
[[Page H3307]]
NOT VOTING--13
Aderholt
Campbell (CA)
Cohen
Gutierrez
Larsen (WA)
Musgrave
Renzi
Reyes
Reynolds
Richardson
Rush
Tancredo
Tanner
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (during the vote). Let me advise Members that
there are approximately 2 minutes remaining in this vote.
{time} 1619
Messrs. TURNER, WALSH of New York and HALL of Texas changed their
vote from ``nay'' to ``yea.''
So the first portion of the divided question was adopted.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
The SPEAKER pro tempore. The Chair will now put the question on the
second portion of the divided question.
The question is: Will the House concur in the amendment of the Senate
with House amendment No. 2 printed in House Report 110-622?
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded Vote
Mr. RANGEL. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. This is a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 322,
noes 94, not voting 17, as follows:
[Roll No. 302]
AYES--322
Abercrombie
Ackerman
Allen
Altmire
Andrews
Arcuri
Baca
Baird
Baldwin
Barrow
Barton (TX)
Bean
Becerra
Berkley
Berman
Berry
Bilbray
Bilirakis
Bishop (GA)
Bishop (NY)
Blumenauer
Bono Mack
Boozman
Boren
Boswell
Boucher
Boyd (FL)
Boyda (KS)
Brady (PA)
Braley (IA)
Brown, Corrine
Brown-Waite, Ginny
Buchanan
Burgess
Burton (IN)
Butterfield
Camp (MI)
Capito
Capps
Capuano
Cardoza
Carnahan
Carney
Carson
Castle
Castor
Cazayoux
Chabot
Chandler
Clarke
Clay
Cleaver
Clyburn
Conyers
Cooper
Costa
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, David
Davis, Lincoln
Davis, Tom
Deal (GA)
DeFazio
DeGette
Delahunt
DeLauro
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Dingell
Doggett
Donnelly
Doyle
Drake
Dreier
Duncan
Edwards
Ehlers
Ellison
Ellsworth
Emanuel
Emerson
Engel
English (PA)
Eshoo
Etheridge
Farr
Fattah
Filner
Forbes
Fortenberry
Fossella
Foster
Frank (MA)
Gerlach
Giffords
Gilchrest
Gillibrand
Gonzalez
Goode
Goodlatte
Gordon
Graves
Green, Al
Green, Gene
Grijalva
Hall (NY)
Hall (TX)
Hare
Harman
Hastings (FL)
Hayes
Heller
Herseth Sandlin
Higgins
Hill
Hinchey
Hinojosa
Hirono
Hodes
Hoekstra
Holden
Holt
Honda
Hooley
Hoyer
Hulshof
Hunter
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (GA)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Jones (OH)
Kagen
Kanjorski
Kaptur
Keller
Kennedy
Kildee
Kilpatrick
Kind
King (NY)
Kingston
Klein (FL)
Knollenberg
Kucinich
LaHood
Lampson
Langevin
Larson (CT)
Latham
LaTourette
Lee
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Linder
Lipinski
LoBiondo
Loebsack
Lofgren, Zoe
Lowey
Lynch
Mahoney (FL)
Maloney (NY)
Markey
Marshall
Matheson
Matsui
McCarthy (CA)
McCarthy (NY)
McCollum (MN)
McCotter
McDermott
McGovern
McHugh
McIntyre
McKeon
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (MI)
Miller (NC)
Miller, Gary
Miller, George
Mitchell
Mollohan
Moore (KS)
Moran (KS)
Moran (VA)
Murphy (CT)
Murphy, Patrick
Murphy, Tim
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Perlmutter
Peterson (MN)
Peterson (PA)
Petri
Pickering
Platts
Pomeroy
Porter
Price (NC)
Rahall
Ramstad
Rangel
Regula
Rehberg
Reichert
Reyes
Rodriguez
Rogers (MI)
Ros-Lehtinen
Roskam
Ross
Rothman
Roybal-Allard
Ruppersberger
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schwartz
Scott (GA)
Scott (VA)
Serrano
Sestak
Shays
Shea-Porter
Sherman
Shimkus
Shuler
Shuster
Simpson
Sires
Skelton
Slaughter
Smith (NJ)
Smith (WA)
Snyder
Solis
Souder
Space
Speier
Spratt
Stark
Stupak
Sutton
Tauscher
Taylor
Terry
Thompson (CA)
Thompson (MS)
Tiahrt
Tierney
Towns
Tsongas
Turner
Udall (CO)
Udall (NM)
Upton
Van Hollen
Velazquez
Visclosky
Walberg
Walsh (NY)
Walz (MN)
Wamp
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Weldon (FL)
Weller
Westmoreland
Wexler
Whitfield (KY)
Wilson (NM)
Wilson (OH)
Wilson (SC)
Wittman (VA)
Wolf
Woolsey
Wu
Wynn
Yarmuth
Young (AK)
Young (FL)
NOES--94
Akin
Alexander
Bachmann
Bachus
Barrett (SC)
Bartlett (MD)
Biggert
Bishop (UT)
Blackburn
Blunt
Boehner
Bonner
Boustany
Brady (TX)
Broun (GA)
Brown (SC)
Buyer
Calvert
Cantor
Carter
Coble
Cole (OK)
Conaway
Crenshaw
Cubin
Culberson
Davis (KY)
Doolittle
Everett
Fallin
Feeney
Ferguson
Flake
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gingrey
Gohmert
Granger
Hastings (WA)
Hensarling
Herger
Hobson
Inglis (SC)
Issa
Johnson (IL)
Jordan
King (IA)
Kirk
Kline (MN)
Kuhl (NY)
Lamborn
Latta
Lucas
Lungren, Daniel E.
Mack
Manzullo
Marchant
McCaul (TX)
McCrery
McHenry
Mica
Miller (FL)
Myrick
Neugebauer
Paul
Pearce
Pence
Pitts
Poe
Price (GA)
Pryce (OH)
Putnam
Radanovich
Rogers (AL)
Rogers (KY)
Rohrabacher
Royce
Ryan (WI)
Sali
Saxton
Scalise
Schmidt
Sensenbrenner
Sessions
Shadegg
Smith (NE)
Smith (TX)
Stearns
Sullivan
Thornberry
Tiberi
NOT VOTING--17
Aderholt
Campbell (CA)
Cannon
Cohen
Gutierrez
Larsen (WA)
McMorris Rodgers
Moore (WI)
Musgrave
Nunes
Renzi
Reynolds
Richardson
Rush
Tancredo
Tanner
Walden (OR)
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (during the vote). There are 2 minutes
remaining in this vote.
{time} 1627
Mr. SHAYS changed his vote from ``no'' to ``aye.''
So the second portion of the divided question was adopted.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
The SPEAKER pro tempore. The Chair will now put the question on the
third portion of the divided question.
The question is: Will the House concur in the amendment of the Senate
with House amendment No. 3 printed in House Report 110-622?
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded Vote
Mr. PRICE of Georgia. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. This will be a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 256,
noes 160, not voting 17, as follows:
[Roll No. 303]
AYES--256
Abercrombie
Ackerman
Allen
Andrews
Arcuri
Baca
Baird
Baldwin
Barrow
Bartlett (MD)
Bean
Becerra
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Bishop (UT)
Blumenauer
Boren
Boswell
Boucher
Boyd (FL)
Boyda (KS)
Brady (PA)
Braley (IA)
Brown, Corrine
Brown-Waite, Ginny
Butterfield
Capps
Capuano
Cardoza
Carnahan
Carney
Carson
Castle
Castor
Cazayoux
Chandler
Clarke
Clay
Cleaver
Cole (OK)
Conyers
Cooper
Costa
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
DeFazio
DeGette
Delahunt
DeLauro
Dent
Dicks
Dingell
Doggett
Donnelly
Doolittle
Doyle
Edwards
Ehlers
Ellison
Ellsworth
Emanuel
Engel
Eshoo
Etheridge
Fallin
Farr
Fattah
Filner
Fortenberry
Foster
Frank (MA)
Gerlach
Giffords
Gilchrest
Gillibrand
Gonzalez
Gordon
Green, Al
Green, Gene
Grijalva
Hall (NY)
Hare
Harman
Hastings (FL)
Hayes
Herseth Sandlin
Higgins
Hill
Hinchey
Hinojosa
Hirono
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (GA)
Johnson (IL)
Johnson, E. B.
Jones (OH)
Kagen
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kind
King (NY)
Klein (FL)
Kucinich
Lampson
Langevin
Larson (CT)
LaTourette
Lee
Levin
[[Page H3308]]
Lewis (GA)
Lipinski
LoBiondo
Loebsack
Lofgren, Zoe
Lowey
Lucas
Lynch
Mahoney (FL)
Maloney (NY)
Markey
Marshall
Matheson
Matsui
McCarthy (NY)
McCollum (MN)
McDermott
McGovern
McHugh
McIntyre
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (MI)
Miller (NC)
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Moran (VA)
Murphy (CT)
Murphy, Patrick
Murphy, Tim
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Paul
Payne
Perlmutter
Peterson (MN)
Peterson (PA)
Platts
Pomeroy
Porter
Price (NC)
Rahall
Rangel
Reyes
Rodriguez
Ros-Lehtinen
Ross
Rothman
Roybal-Allard
Ruppersberger
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schwartz
Scott (GA)
Scott (VA)
Serrano
Sestak
Shays
Shea-Porter
Sherman
Shuler
Sires
Skelton
Slaughter
Smith (NJ)
Smith (WA)
Snyder
Solis
Space
Speier
Spratt
Stark
Stupak
Sutton
Tauscher
Taylor
Thompson (CA)
Thompson (MS)
Tierney
Towns
Tsongas
Turner
Udall (CO)
Udall (NM)
Upton
Van Hollen
Velazquez
Visclosky
Walsh (NY)
Walz (MN)
Wasserman Schultz
Watson
Watt
Waxman
Weiner
Welch (VT)
Wexler
Wilson (OH)
Woolsey
Wu
Wynn
Yarmuth
NOES--160
Akin
Alexander
Altmire
Bachmann
Bachus
Barrett (SC)
Barton (TX)
Biggert
Bilbray
Bilirakis
Blackburn
Blunt
Boehner
Bonner
Bono Mack
Boozman
Boustany
Brady (TX)
Broun (GA)
Brown (SC)
Buchanan
Burgess
Burton (IN)
Buyer
Calvert
Camp (MI)
Cantor
Capito
Carter
Chabot
Coble
Conaway
Crenshaw
Cubin
Culberson
Davis (KY)
Davis, David
Davis, Tom
Deal (GA)
Diaz-Balart, L.
Diaz-Balart, M.
Drake
Dreier
Duncan
Emerson
English (PA)
Everett
Feeney
Ferguson
Flake
Forbes
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gingrey
Gohmert
Goode
Goodlatte
Granger
Graves
Hall (TX)
Hastings (WA)
Heller
Hensarling
Herger
Hobson
Hoekstra
Hulshof
Hunter
Inglis (SC)
Issa
Johnson, Sam
Jones (NC)
Jordan
Keller
King (IA)
Kingston
Kirk
Kline (MN)
Knollenberg
Kuhl (NY)
LaHood
Lamborn
Latham
Latta
Lewis (CA)
Lewis (KY)
Linder
Lungren, Daniel E.
Mack
Manzullo
Marchant
McCarthy (CA)
McCaul (TX)
McCotter
McCrery
McHenry
McKeon
McMorris Rodgers
Mica
Miller (FL)
Miller, Gary
Moran (KS)
Myrick
Neugebauer
Pearce
Pence
Petri
Pickering
Pitts
Poe
Price (GA)
Pryce (OH)
Putnam
Radanovich
Ramstad
Regula
Rehberg
Reichert
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Roskam
Royce
Ryan (WI)
Sali
Saxton
Scalise
Schmidt
Sensenbrenner
Sessions
Shadegg
Shimkus
Shuster
Simpson
Smith (NE)
Smith (TX)
Souder
Stearns
Sullivan
Terry
Thornberry
Tiahrt
Tiberi
Walberg
Wamp
Weldon (FL)
Weller
Westmoreland
Whitfield (KY)
Wilson (NM)
Wilson (SC)
Wittman (VA)
Wolf
Young (AK)
Young (FL)
NOT VOTING--17
Aderholt
Campbell (CA)
Cannon
Clyburn
Cohen
Gutierrez
Larsen (WA)
Musgrave
Nunes
Renzi
Reynolds
Richardson
Rush
Tancredo
Tanner
Walden (OR)
Waters
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (during the vote). Members are advised there
is 1 minute remaining in this vote.
{time} 1633
So the third portion of the divided question is adopted.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
The SPEAKER pro tempore. Pursuant to section 2 of House Resolution
1175, the motion that the House concur in the Senate amendment to the
title is adopted.
____________________