[Congressional Record (Bound Edition), Volume 153 (2007), Part 18]
[House]
[Pages 24526-24563]
[From the U.S. Government Publishing Office, www.gpo.gov]




              EXPANDING AMERICAN HOMEOWNERSHIP ACT OF 2007

  The SPEAKER pro tempore. Pursuant to House Resolution 650 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the state of the Union for the consideration of the bill, H.R. 1852.

                              {time}  1147


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the state of the Union for the consideration of the bill 
(H.R. 1852) to modernize and update the National Housing Act and enable 
the Federal Housing Administration to use risk-based pricing to more 
effectively reach underserved borrowers, and for other purposes, with 
Mrs. Jones of Ohio in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered read the 
first time.
  The gentlewoman from California (Ms. Waters) and the gentlewoman from 
Illinois (Mrs. Biggert) each will control 30 minutes.
  The Chair recognizes the gentlewoman from California.
  Ms. WATERS. Madam Chairman, I yield myself such time as I may 
consume.
  I rise in support of H.R. 1852, the Expanded American Homeownership 
Act of 2007. As you know, I introduced H.R. 1852 on March 29, 2007, and 
I want to take this time to thank Chairman Frank for his original 
cosponsorship. I also want to acknowledge each of my colleagues both on 
the Committee on Financial Services and in the House who have joined 
with me to see that this important legislation passes the House.
  It has been a little over 4 months since the Committee on Financial 
Services considered this measure to revitalize the Federal Housing 
Administration, or FHA. On May 3, 2007, the Expanding American 
Homeownership Act passed the Committee on Financial Services by a vote 
of 45-19.
  The ensuing period has only made the need to enact H.R. 1852 clearer. 
We are all aware of the turmoil in the mortgage markets with the 
dramatic rise in foreclosures. Some predict as many as 2 million 
mortgage loan defaults by year's end. Equally troubling is the widening 
impact that the mortgage crisis is having within the domestic and 
global economy. We still don't know the full scope of that impact, but 
it is clear that we must take prudent steps to address the underlying 
issues in the housing markets.
  H.R. 1852 is a necessary step in that direction. To be clear, this 
legislation will not by itself resolve the crisis. Indeed, later this 
week the Committee on Financial Services will hold a hearing to discuss 
the major players in government and the markets' other strategies to 
address this multi-faceted problem.
  Revitalizing FHA, however, is an essential element of a comprehensive 
strategy. FHA is a federally insured loan program that for over 60 
years has been a reliable source of affordable fixed-rate mortgage 
loans, especially for first-time home buyers.
  At the end of funding year 2006, FHA had $338.6 billion of insurance 
in force on about 3.9 million loans. From 1934 through the end of 
funding year 2006, FHA had insured about $33.9 million home loans at a 
mortgage volume of about $1.9 trillion.
  Once the preeminent provider of mortgage insurance to low- and 
moderate-income home buyers, FHA has seen a precipitous drop in its 
market share in recent years. In 1991, FHA loans accounted for about 11 
percent of the market. By 2004, that share had dropped to about 3 
percent.
  Borrowers have increasingly turned to the private subprime market for 
loans, many of which contained adjustable rates that are now resetting, 
or will do so in the near future. In the absence of significant 
appreciation in the values of their homes, many of these borrowers will 
be unable to refinance to ensure affordable monthly payments into the 
future.
  H.R. 1852 will enable FHA to serve more subprime borrowers at 
affordable rates and terms, recapture borrowers that have turned to 
problematic subprime loans in recent years, and offer refinancing loan 
opportunities to borrowers struggling to meet their mortgage payments 
in the midst of the current home price and mortgage market turbulence.
  Specifically, this bill would authorize zero and lower down payment 
loans for borrowers that can afford mortgage payments but lack the cash 
for required down payment, a major reason that many low-income 
borrowers turn to private subprime markets rather than FHA-insured 
loans. It will increase loan limits to make FHA relevant in high-cost 
markets, direct FHA to provide mortgage loans to high-risk, but 
qualified, buyers; it will enhance the FHA reverse mortgage loan 
program, promote the sale of foreclosed FHA rental housing, loans to 
localities so that affordable housing can be maintained in local 
communities, authorize up to $300 million a year for the next 5 fiscal 
years from the bill's excess profits for an affordable housing fund 
instead of returning such funds to the general treasury.
  Notably, H.R. 1852 also includes a number of important changes to the 
FHA bill that passed the House last year. First, it eliminates the fee 
increases from last year's bill for borrowers that continue to make a 
down payment, scaling back the maximum upfront fee from 3 percent to 
2.5, and the maximum annual fee from 2 percent to .55 percent.
  These reductions would reduce FHA closing costs premiums for a 
hypothetical family buying a $300,000 home by $2,250, and annual fees 
over a 5-year period by over $20,000 compared to last year's bill.
  This bill also includes a provision authorizing loan limit increases 
for FHA rental housing loans in high-cost areas where current FHA loans 
do not keep pace with local construction costs. In this way we are 
ensuring that FHA contributes to the full range of affordable housing 
stock we so desperately need in this country, from homeownership to 
rental housing.
  In that vein, H.R. 1852 also differs from H.R. 1752 in a final, 
absolutely critical respect. This bill recognizes the full scope of the 
affordable housing crisis facing the Nation by targeting up to $300 
million annually for the next 5 years to an affordable housing fund for 
grants to provide affordable rental housing and homeownership 
opportunities for low-income families.
  This measure is clearly needed. We can thank Barney Frank for all of 
the work and all of the attention and time that he put into making sure 
that this was a part of this bill. Simply put, this country faces an 
affordable housing crisis of epic proportions. According to Harvard 
University's State of the Nation's Housing in 2007 report, 17 million 
renters and homeowners are paying more than half their incomes in 
housing costs. There just isn't enough affordable housing stock to go 
around.
  With that, and in closing, I have said for many years that there is 
an affordable housing crisis in America. In recent months that crisis 
has exploded beyond the poorest renters and homeowners, to threaten the 
domestic economy. H.R. 1852 is a necessary step, though not in itself a 
sufficient one, in walking us back from the brink and the direction of 
meeting the housing needs of all Americans.
  Madam Chairman, I reserve the balance of my time.
  Mrs. BIGGERT. Madam Chairman, I yield to the gentleman from Alabama 
(Mr. Bachus), the ranking member of the Financial Services Committee, 
for 7 minutes.

[[Page 24527]]


  Mr. BACHUS. Madam Chairman, the Federal Housing Administration, which 
we today call FHA, was created in 1934; and it is a very important 
source of support for first-time home buyers and for low- and middle-
income borrowers. FHA provides mortgage insurance that protects lenders 
against losses when homeowners default on their mortgage obligations, 
as many of them are doing today. It also allows the lenders to offer 
their customers, American homeowners, low interest rates and low 
closing costs.
  Since its inception, the FHA has insured nearly 35 million loans. 
That makes it the largest insurer of mortgages in the world. FHA's 
share of the mortgage market, however, has been steadily declining in 
recent years, falling from almost 20 percent 10 years ago, of the total 
mortgage market in America, to 5 percent today.
  This sharp drop in FHA's market share resulted largely from the 
growing popularity of subprime mortgages, as more borrowers opted for 
loans featuring zero down payments and introductory teaser rates far 
lower than what was available from FHA.
  The difficulties we are experiencing today by many subprime borrowers 
is as their initial low interest rates reset at a much higher level, it 
offers FHA an opportunity to reestablish its standing in the 
marketplace as a safe, low-cost alternative for American homeowners. It 
is also another reason that we should be here today reforming FHA, to 
ensure that that happens.
  For that to happen, Congress does need to pass the reforms that we 
are considering today. I want to say that right upfront. There are 
important reforms in this bill. These same reforms were contained in 
legislation that Ranking Member Biggert of the Housing Committee and 
myself and others in a bipartisan way introduced in the 109th Congress. 
In fact, that legislation, Comprehensive FHA Reform, and that is in 
this bill today, and is very good provisions, passed with over 400 
votes on the House floor, only to die in the Senate. I am sorry that 
happened.
  Earlier this year, Congresswoman Biggert and I reintroduced 
legislation identical to that legislation. However, and I am sorry to 
say that rather than embracing last year's bipartisan approach, the 
majority has chosen to go in a different direction. I think they do 
that from honest philosophical reasons. We disagree with those reasons.
  They have included provisions which we believe will divert surpluses 
generated by the FHA program to a new affordable housing fund 
established in separate legislation which this House and our committee 
passed earlier this year.
  While a strong bipartisan consensus exists regarding the need for FHA 
reform, the reforms in this bill, the majority is insistent on linking 
the enactment of these reforms to the creation of yet a new multi-
billion dollar housing fund has caused many of us on this side of the 
aisle to hesitate from strongly supporting this legislation.

                              {time}  1200

  I admit, most of our Members are in a quandary. We like the reforms 
in this bill. We know that those reforms will go a long way towards 
addressing the crisis that we face today, the Affordable Housing Fund. 
And we realize at the same time that there is legitimate purpose behind 
Chairman Frank's Affordable Housing Fund, and one of those is to offer 
affordable low income rental property for Americans. And we understand 
that he honestly believes, and we have an honest disagreement as to the 
need for this.
  We simply believe that a better approach is to dedicate the FHA 
surplus to shoring up the financial solvency of the FHA mortgage 
program, which was only recently removed from GAO's list of government 
programs at high risk for waste, fraud and abuse.
  A portion of that surplus could also be returned to beneficiaries of 
the program. Who are they? They are the many people who have taken out 
FHA-insured reverse mortgages, many of them senior citizens, and we 
could do that in the form of lower insurance premiums for all Americans 
who have FHA mortgages.
  Madam Chairman, the key reforms included in this legislation, 
lowering down payment requirements, increasing loan limits and 
mortgages that FHA is authorized to ensure, giving FHA more pricing 
flexibility, command broad consensus among Republicans, Democrats, the 
Bush administration, consumer groups and the industry, the realtors, 
the home builders and others. Indeed, in announcing several of these 
initiatives last month designed to contain the damage caused by the 
problem in subprime, President Bush stressed the critical role that FHA 
can play in assisting homeowners facing sharply higher mortgage 
payments and possibly foreclosure in reaffirming the administration's 
support for the FHA modernization legislation and many of the 
provisions contained in this bill.
  However, the administration, as have many on our side of the aisle, 
also is strongly opposed to using FHA surplus as seed money for an 
untested, unrelated government housing program, one that is estimated 
to cost $3 billion or more.
  Thus, by insisting that this bill carry that controversial provision, 
we feel like the majority is delaying, if not jeopardizing, the 
enforcement of important reforms that we need now to provide a lifeline 
for seeking to refinance out of high cost subprime loans.
  Madam Chairman, accordingly, I urge my colleagues to support 
Republicans' amendments to strike the extraneous Affordable Housing 
Fund provisions opposed by the administration and allow us to move 
forward quickly with badly needed and long overdue reforms in the FHA 
program. If we are not successful in those amendments, many of the 
Members will vote for this underlying legislation, some will not. But, 
again, I want to acknowledge the sincerity and the good faith that the 
majority has worked throughout this process with the minority; and, 
Chairman Waters and Chairman Frank, we very much appreciate that. We 
appreciate the many fine provisions in this bill.
  Ms. WATERS. I yield to the chairman as much time as he may consume.
  Mr. FRANK of Massachusetts. I thank the gentlewoman, the Chair of the 
Housing Subcommittee who has worked so hard all year on a number of 
very important pieces of legislation. And I appreciate the kind words 
of the ranking member. I congratulate him on the newest addition to his 
extended family. And he correctly says, there is a lot in this bill 
that we agree with; there are some things that we disagree.
  Now, the ranking member of the subcommittee, the gentlewoman from 
Illinois, the ranking member of the full committee. I should note, the 
gentlewoman from Illinois is no longer the ranking member of this 
subcommittee, she was recently moved, but she was during the pendency 
of this bill. They noted that last year a bill passed the House by 400 
to a handful on the FHA, and that is true. And the reason is, that is 
the difference between us and them.
  Last year, when they were in the majority, they came out with a bill 
that had some things in it that we liked, a couple things that we 
didn't like, so we were reasonable and conciliatory and voted for it. 
And now we are in the majority. And it is an odd argument to say that 
the bill that they passed when they were in the majority, having 
defeated some of our amendments, somehow now, because we were 
conciliatory last year and supported it, we are obligated to do the 
same thing.
  The principle of deja vu all over again is not to be found in 
Jefferson's Manual. It is not binding. We built on what we agreed to 
last year and we added some things. Let me talk about where we 
disagree.
  Oddly, the administration insists that when we do mortgage insurance 
for lower income people, we agree, that going forward, and even in fact 
in helping in the current crisis, FHA mortgage insurance should be 
available for people with weaker credit who are in the subprime 
category, now, if they can refinance at a steady rate in the future so 
they can go there in the first place.
  But what the administration says is this: If you are a woman making 
$48,000 a year and your credit isn't great for a

[[Page 24528]]

variety of reasons and you get mortgage insurance from the FHA, this 
administration and the approach of my Republican colleagues is to 
charge her more than any Member of this House would be charged for the 
same mortgage insurance, because what they say is, we will extend it to 
people with weaker credit, but we will charge them more, because people 
with weaker credit are likely to default. It is true people with weaker 
credit are likelier to default, but should everybody be penalized 
financially because some people with weaker credit will default?
  What we say is, if you are in that higher risk category and you go 
forward and make your payments on time, you should be refunded that 
money after 5 years automatically, 3 years at the discretion of HUD.
  So I reject the notion that we should make the person in the lower 
credit category who conscientiously makes her payments be the one who 
has to bear the cost of a loan loss rate that is higher for people like 
her. That is not her fault.
  Secondly, we have in here tougher restrictions than last year on the 
ability of HUD to raise FHA rates. Members will note, the FHA has been 
making a surplus recently, and the administration likes that and they 
can use that to put into the general budget so Housing and the FHA 
subsidize the rest of the budget. And a couple of times on a fully 
bipartisan basis, through the appropriators and through our committee, 
we have written to HUD saying, no, don't do that. Don't raise FHA fees 
when you are already making a profit.
  This bill, in fact, reduces the ability of HUD to raise fees unless 
they can document that they are going to go in the red, and that is one 
of the differences. If you vote for a substitute, you will be voting 
for a weaker set of restrictions on HUD's ability to raise FHA fees. 
That is why the home builders and the realtors have generally been 
supportive of the approach that we are taking, because we don't want 
HUD to have the freedom to raise the fees just to make a surplus for 
the rest of the government and make homeowners do that initial surplus.
  In addition, by the way, we take the cap off home equity mortgages, 
and that is what generates the money. We don't generate the money for 
the affordable housing fund here by raising fees on mortgage insurance 
in general; in fact, we restrict HUD's ability to do that. We do take 
the cap off mortgage insurance. So what we are saying is, there will be 
more home equity mortgages granted. And, in fact, we put a restriction 
on the fee that can be charged by those who originate them. Not in the 
minority's substitute, I believe. And we say that extra money that 
comes not from raising anybody's fees but increasing the volume is what 
we can use for affordable housing. We also say that you should raise 
the limit.
  Now, the administration had been opposed to it and they are parading 
it some but I believe not enough. We now have a situation in which the 
market is telling us that they will not do mortgages if they go above 
the FHA-GSE limit. And what this bill does is, A, to raise the limit 
based on the regional variation in house prices, but, in addition, says 
to the Secretary of HUD: If the market freezes up as it now does, you 
have discretion, the discretion of the Secretary of HUD, to do a 
temporary increase in the limits. And I think that is a reasonable 
approach.
  Finally, the Affordable Housing Trust Fund. Be very clear. Look at 
the bill. Not a penny can go to the Affordable Housing Trust Fund under 
the legislation before us today until the Secretary of HUD certifies 
that the FHA fund is fully solvent. That is, there is no way under this 
bill that a penny can go to the Affordable Housing Trust Fund if it 
would in any way cause an increase in FHA mortgage insurance or in any 
way jeopardize the fund.
  The question is, if there is a surplus generated by the mortgage 
insurance rates, and remember, we are saying to HUD you can't charge as 
much as you want to. So at the lower rate we impose and with the 
increase in the volume of home equity mortgages that generates a 
surplus, does it go into the Treasury to do as they wish or can we set 
it aside for an affordable housing program? And for the first time, 
because you do not have now a lot, there are a lot of HUD programs, but 
there aren't any now that help build family affordable housing. We have 
some for the elderly; HUD tries to cut it. We have some for the 
disabled; HUD tries to cut it. We do not have a general program for 
helping to build affordable family housing, and that is what this bill 
would do. But only if by raising revenue. And, by the way, when we 
increased it, there was an odd statement in which they said don't raise 
the upper limit, have the program be focused on the lower income 
people. They are not competitive.
  In fact, raising the upper limit makes money for the FHA. CBO has 
told us that when you raise the limit, that is a profit for FHA. In 
fact, raising the limit at the top is one of the reasons why we can 
avoid charging the people with weaker credit more, which the FHA wants 
to do, because we recycle some of that profit that they will make from 
right in the upper end into helping offset the higher loan loss rate 
from people at the lower end.
  So the notion that in any way we are deteriorating our ability to 
help the moderate people is just nonsense. It is literal nonsense. 
Because raising the upper limit, all it does is provide more funds 
which can be used, because the alternative, and again this is in the 
Bush administration's approach: Yes, we will extend credit to people 
with weaker credit, but we will charge those individuals more than 
somebody who is richer even if that individual is making the payment. I 
don't think that is appropriate for the Federal Government.
  There has been a lot of bipartisan cooperation on this bill. There 
were a couple amendments offered. One amendment is jointly offered by 
myself and the gentleman from California (Mr. Miller). There are 
amendments offered by the gentleman from Ohio (Mr. Tiberi) which we 
think is a good idea. Mr. Miller has another one dealing with down 
payment assistance. Mr. Tiberi's deals with the question of counseling. 
We are supportive of those. There is a great deal of bipartisanship 
here.
  The realtors and home builders, two of the private sector groups 
strongly committed to helping with homeownership and home building, 
support this bill and support our versions of it. All the consumer 
groups, the people who advocate for low income housing do. I hope that 
the bill is adopted. There are some amendments that would kill it. I 
will say there is an amendment to strike the funds for the Affordable 
Housing Fund. Members might want to check. A virtually identical 
amendment was offered during the appropriations bill to prohibit any 
FHA money from going there. It was defeated by 2-1. It was a very large 
vote on this side, obviously, but a significant vote on the other side. 
We have debated all these issues. I hope by the end of the day we will 
send the FHA bill through.
  And let me just close by saying I welcome what the administration 
did. We are moving closer. I hope by the end of today we will have sent 
this bill to the Senate, along with the GSE bill. And I have spoken to 
Secretary Paulson and I have spoken with Members of the Senate. If the 
Senate will then take up the GSE bills and the FHA bills, I know there 
are differences, we want a signature on both bills. We will have a 
genuine three-sided conference; ourselves, both parties; the Senate, 
both parties; the Secretary of Treasury, the Secretary of HUD. And I 
believe if the Senate will act well before Thanksgiving, we can have a 
good package in which the GSEs and FHA are made sounder and more solid 
and better able to serve the people.
  Mrs. BIGGERT. Madam Chairman, I yield 45 seconds to Ranking Member 
Bachus.
  Mr. BACHUS. Madam Chairman, I would like to thank the chairman of the 
full committee. And I want to make it perfectly clear that this was a 
grandson, not a son or daughter who was born to Linda and I. So when 
you said proud addition, I just didn't want a rumor back home that we 
had had a child.

[[Page 24529]]

  But I also want to acknowledge what you said. There are many 
important reforms in this bill. In fact, from last year's bill, much of 
what the chairman has said, I think we have worked together, groups 
have worked together, and as a result of the subprime crisis we have 
got an even better bill, and I acknowledge all that. There are many 
good things about this bill, and I commend him for his knowledge of the 
subject and his fine work. Thank you.
  Ms. WATERS. Madam Chairman, may I inquire as to how much time we have 
left?
  The CHAIRMAN. Ms. Waters has 13\1/2\ minutes, and Mrs. Biggert 21\1/
2\ minutes.
  Ms. WATERS. Madam Chairman, I yield 2 minutes to the gentleman from 
Texas (Mr. Green).
  Mr. AL GREEN of Texas. I want to thank you and the chairman of the 
full committee for this brilliant and well thought-out legislation. I 
absolutely support it. I am convinced that this bill, had it been in 
place, would have helped many borrowers to avoid the subprime market 
and many of those who also went into the predatory lending areas, 
because it would provide reasonable rates without prepayment penalties.
  But this bill also has the Affordable Housing Fund, and I support it 
wholeheartedly. There is no question that there is a need to build, 
preserve, and renovate, rehabilitate affordable housing in this 
country. This bill gives us the means by which it can be done.
  I also would like to point out that the bill has an amendment that we 
introduced to deal with the mortgage brokers.

                              {time}  1215

  This bill requires mortgage brokers and correspondent lenders to 
safeguard and account for a borrower's money. It is actually codified 
into law. It would require them to follow reasonable and lawful 
instructions of the borrower and to act with reasonable skill, care, 
and diligence in handling the money of borrowers and the business of 
borrowers. It allows the Secretary of HUD to deny a violator the 
privilege of originating loans. It's a good amendment. I beg that my 
colleagues would support it.
  Finally, I want to talk about the alternative credit amendment that 
was added that we introduced, which is a pilot program to establish an 
automated process using alternative credit such as rent, utilities, 
phone bills.
  Many persons are credit worthy, but they don't have the traditional 
credit necessary to purchase a home. This bill will establish an 
alternative system so that they too may enter the marketplace and 
purchase a home.
  After 4 years, the GAO is to give Congress a report on the bill. I 
support all of what is in this bill, and I beg that my colleagues do so 
as well.
  Again, I commend the Chair and the ranking members for what they have 
done as well.
  Mrs. BIGGERT. Madam Chairman, I yield myself 5 minutes.
  Madam Chairman, I'd like to start out on a positive note, but I guess 
I must say that I'm disappointed about the bill, the way it is as we're 
considering it today.
  While the bill has improved since its introduction, I had hoped that 
we could take up the same bipartisan FHA Modernization Bill, H.R. 5121, 
that passed House last year. And since we've been talking about it, I 
might say it was cosponsored by 54 Republicans and 51 Democrats and one 
Independent, so it was a good bill and a bipartisan compromise that was 
agreed to by Chairman Waters, Chairman Frank, and then Chairman Mike 
Oxley.
  And given the overwhelming vote, and the exact number was 415-7 for 
last year's bill, I had hoped that we could take it up and move it 
quickly to the floor. But instead we have two bills this year. We have 
the bill, H.R. 1752, which I introduced, which was identical to last 
year's bipartisan bill, and we have Chairman Waters' bill. And so I 
think we're today considering a new bill with new provisions that are 
not bipartisan, and I think it has delayed the FHA modernization and 
will serve fewer borrowers than last year's bill. But it's an important 
bill.
  There are some key differences between these bills. There is one that 
has caused the greatest concern for me and many of my colleagues, and 
that is the inclusion of a provision in H.R. 1852 that creates a 
funding placeholder and siphons off FHA funds to a brand-new government 
trust fund. And it's admirable, affordable housing. We all want 
affordable housing in all forms, whether it's section 8, whether it's 
public housing, whether it's FHA modernization. But I think that taking 
the funds out of FHA and using them for a purpose unrelated to its core 
mission of the FHA would threaten the solvency of the FHA fund and its 
ability to pay off the insurance claims. And we are reaching a crisis 
there, where we are going to have to have some credit influx into the 
FHA fund. So we'll hear more discussion on that during the 
consideration of Mr. Hensarling's amendment during this debate.
  So it's my hope that we can work together to address Members' 
concerns through the amendment process so that a modernized FHA bill 
can help assist more low- and moderate-income Americans in buying and 
keeping their homes.
  I'd like to just briefly talk about and thank Chairman Waters for 
offering a specific provision in this manager's amendment. The 
chairwoman's original draft only permitted first-time home buyers to 
participate in new low- and no down payment loan programs. But the 
amendment under consideration corrects that and mirrors the provision 
in the FHA modernization bill that allows any FHA qualified borrower to 
participate in the new FHA low and no down payment loan program. So 
clearly, the FHA has a role to play in the solution to this country's 
rising foreclosure rate.
  And as I think I said on April 19, during our first committee hearing 
on this, this bill, one of the most important things that Congress can 
do, as we search for ways to help those that have been harmed by the 
subprime market, is to give FHA the tools it needs to be a viable 
alternative for the first-time and low-income borrowers.
  And then I'd like to address an issue that Chairman Frank did bring 
up, and even though he's not on the floor. But the legislation that I 
have included another bipartisan agreement last year, and that was the 
automatic reduction of annual premiums in FHA to no more than 55 basis 
points for loans that remain active after 5 years. And automatic 
premium reductions can be a good thing. They can reduce refinancing and 
perhaps some defaults and foreclosures as well.
  In contrast, I think that the Franks-Waters bill requires the refund 
of excess upfront premiums charged to higher-risk borrowers, those with 
FICO scores under 560. So I'm concerned that this provision would have 
the unintended consequences of limiting the number of borrowers that 
could be served by the FHA program because it requires initial premiums 
to be even higher. And I think that the refund provision would also be 
very difficult to implement.
  This is an insurance program. And when you have car insurance, you 
don't get a refund if you don't have an accident. You might have your 
rate lowered, which is what was in the former bill. So I think that 
that is an issue that he talked about that I wanted to clarify.
  Madam Chairman, I reserve the balance of my time.
  Ms. WATERS. Madam Chairman, I yield myself 30 seconds to make sure 
that my colleague on the opposite side of the aisle, Mrs. Biggert, whom 
I've worked with so closely and enjoy working with so much, is clear on 
the fact that the housing trust fund does not take money from FHA. And 
I think Mr. Frank made it very clear before he left that HUD would have 
to certify that it is solvent before any of that money goes into the 
trust fund. I think that's very important.
  Madam Chairman, I yield 2\1/2\ minutes to the gentleman from Texas 
(Mr. Hinojosa).
  Mr. HINOJOSA. Madam Chairman, I rise in strong support of H.R. 1852, 
the Expanding American Homeownership Act of 2007, introduced by 
Congresswoman Maxine Waters, who has worked so hard on this 
legislation.

[[Page 24530]]

  I want to commend my good friend from California for introducing such 
an important piece of legislation and for helping me and the 
Congressional Rural Housing Coalition find ways to provide housing for 
all Americans, including those in rural America. She has found numerous 
ways to improve the availability, affordability and quality of housing; 
and this legislation advances that cause.
  Madam Chairman, this legislation, H.R. 1852, will modernize and 
update the National Housing Act and enable the Federal Housing 
Administration to use risk-based pricing to more effectively reach 
underserved borrowers. It will also provide a safe alternative for 
potential home buyers with less than perfect credit, thus helping them 
avoid the pitfalls of certain subprime lending and, hopefully, reduce a 
large portion of predatory lending.
  This legislation is very important to working families. Hundreds of 
thousands of American families are concerned about losing their homes 
as their mortgage payments increase because of subprime loans with 
adjustable interest rates. With strong efforts to assist them, up to 
the 40 percent of families with subprime loans could qualify for more 
affordable fixed-rate loans so they can keep their homes.
  As co-chair and co-founder of the Financial and Economic Literacy 
Caucus, I am particularly pleased that the legislation contains a 
housing counseling provision. It is a long time coming.
  I want to express my sincere appreciation to Chairwoman Maxine Waters 
for introducing such important legislation.
  Madam Chairman, I submit for the Record letters from the American 
Bankers Association and the National Association of Home Builders in 
support of H.R. 1852.
  For these reasons, I strongly urge my colleagues to vote ``yes.''

                                               September 18, 2007.
     To: Members of the U.S. House of Representatives.
     From: Floyd Stoner, Executive Director, Congressional 
         Relations & Public Policy, ABA.
     Re Support for H.R. 1852, the Expanding American 
         Homeownership Act of 2007.

       I am writing to you on behalf of the members of the 
     American Bankers Association (ABA) to express our support for 
     H.R. 1852, the Expanding American Homeownership Act of 2007, 
     scheduled for House consideration today. This legislation 
     reforming the Federal Housing Administration (FHA) will make 
     the FHA a strong, relevant tool to help banks and other 
     lenders to bring homeownership to more Americans for years to 
     come. These reforms are more necessary now than ever, as FHA 
     can play an important role in addressing current problems in 
     the mortgage markets.
       The FHA was created in 1934 to serve as an innovator in the 
     mortgage market. Since then, FHA, in a public/private 
     partnership with banks and others in the lending community, 
     has assisted nearly 35 million Americans become homeowners. 
     Unfortunately, statutory limitations and lack of flexibility 
     caused FHA to become less relevant to the industry. The 
     legislation before the House of Representatives makes 
     necessary changes to improve the efficiency of the FHA, 
     increase the nation's homeownership rate, increase 
     competition in the lending market, and provide borrowers with 
     a much needed option in the current tight credit market.
       Specifically, ABA supports provisions that: (1) simplify 
     the downpayment process and offer borrowers flexible 
     downpayment options; (2) extend the mortgage term of an FHA 
     insured loan to 40 years; (3) increase the FHA loan limits; 
     and (4) modernize the Home Equity Conversion Mortgage 
     Program. These changes will again make the FHA an important 
     partner with the private market and will help to ensure that 
     more borrowers are able to benefit from FHA insurance.
       We urge you to support this reform of FHA to better serve 
     homebuyers by supporting H.R. 1852 when it comes to the House 
     floor.
                                  ____

                                              National Association


                                             of Home Builders,

                               Washington, DC, September 17, 2007.
     Hon. Nancy Pelosi,
     Speaker, House of Representatives,
     The Capitol, Washington, DC.
       Dear Speaker Pelosi: On behalf of the 235,000 members of 
     the National Association of Home Builders (NAHB), I am 
     writing to express the building industry's support for H.R. 
     1852, the Expanding American Homeownership Act of 2007. NAHB 
     urges you to support this bill, which modernizes the Federal 
     Housing Administration (FHA), when it comes to the House 
     floor next week. Because of the importance of this issue to 
     our industry, we are designating the vote on passage of H.R. 
     1852 as a KEY VOTE.
       NAHB also supports the Frank/Miller/Cardoza amendment that 
     will further enable home buyers the ability to purchase an 
     FHA-insured home in many high-cost areas. Currently, the FHA 
     loan limit is too low to enable many deserving home buyer to 
     purchase a home in high-cost areas.
       Since its creation in 1934, and for much of its existence, 
     the FHA has been viewed as a housing finance innovator by 
     insuring millions of mortgage loans, which have made it 
     possible for America's families to achieve homeownership. 
     FHA's single family mortgage insurance programs have served 
     home buyers in all parts of the country during all types of 
     economic conditions. Moreover, FHA has done this without any 
     cost to America's taxpayers.
       Unfortunately, over the past two decades, the popularity 
     and relevance of FHA's single family mortgage insurance 
     programs have waned as FHA's programs have failed to keep 
     pace with competing conventional mortgage loan programs. 
     Faced with a deepening constriction in the availability and 
     affordability of housing credit, Congress now has the 
     opportunity to modernize the FHA and enable it to play a key 
     role in stabilizing the mortgage markets, while offering 
     borrowers a safe and fair mortgage alternative. Recently, 
     President Bush outlined a plan to help American homeowners 
     weather the current difficulties in mortgage markets, which 
     included asking Congress to send him an FHA reform bill as 
     soon as possible.
       To address the problems in today's housing finance market, 
     I urge your support for H.R. 1852 on the House floor this 
     week. Again, NAHB will KEY VOTE the vote on passage of H.R. 
     1852. Thank you for considering the views of the home 
     building industry.
           Sincerely,
                                                Joseph M. Stanton,
                                                   Chief Lobbyist.

  Mrs. BIGGERT. Madam Chairman, I would just like to thank the 
gentleman from Texas (Mr. Hinojosa) for all his hard work on our 
Financial Literacy and Education Caucus. I really enjoy working with 
him, and the counseling really fits right into the purview of financial 
literacy, so again I thank the gentleman.
  Madam Chairman, I yield 5 minutes to my friend, the gentleman from 
California (Mr. Gary G. Miller).
  Mr. GARY G. MILLER of California. Madam Chairman, I rise in strong 
support of this bill. I'd like to commend Chairman Barney Frank and 
Ranking Member Bachus and Subcommittee Chairman Maxine Waters and 
Ranking Member Judy Biggert for their hard work. This has been a long 
time coming.
  If you watch what the Federal Reserve is doing today, they're 
injecting short-term dollars into the marketplace trying to stabilize 
the marketplace. But what the marketplace and housing needs today is 
long-term dollars and revenues to ensure that people can own a home and 
get a long-term loan and pay that back.
  When I talk to brokers and lenders in my district, it is clear that 
the FHA program as currently structured has not kept pace. In the past, 
moderate-income home buyers who could not qualify for conventional 
loans because of high loan to value ratios or high payment to income 
ratios could still achieve the dream of homeownership through the FHA 
program.
  Today, the FHA program is no longer a useful product to home buyers. 
Instead, working families are faced with a situation where they are 
either unable to own a home, or they're forced to resort to a risky 
loan product that might make their ability to keep the home difficult.
  With all this occurring in the subprime market, FHA reform is more 
critical today than ever. The need for this legislation is immediate.
  Many times exotic products such as interest-only loans, negative 
amortizations are the only options available to working families to 
achieve homeownership. This is because the FHA program became virtually 
irrelevant for many home buyers.
  Not only can the bill before us today provide a viable alternative 
for families seeking to purchase a home, but it can also help families 
facing uncertainty about being able to keep their current home.
  The bottom line is to make the FHA program a viable mortgage option, 
we must ensure that the program's products are available across the 
country and they meet the needs of borrowers. This includes not only 
eliminating the geographic barriers to utilization of the program in 
high-cost areas, but also facilitating the purchase of entry-level 
homes, including condos and manufactured housing.

[[Page 24531]]

  These forms of housing are an affordable option for entry-level home 
buyers, and they should be included under this program if we truly want 
to help families climb the first rung on the ladder of homeownership.
  In addition to reforming what can be purchased under the program, we 
must also improve the competitiveness of the FHA product among the 
mortgage options available. In other words, we must address the 
problems in FHA programs that cause it not to be utilized when it is an 
available mortgage product for the potential home buyer.
  The answer is that the program in flexibility and burdensome 
processes have left many in the industry hesitant or, in the case of 
mortgage brokers, unable to offer FHA products.
  The legislation before us today includes a number of reforms to make 
the FHA program relevant in today's marketplace. For example, today's 
mortgage brokers originate the majority of mortgage loans and, 
therefore, provide HUD with the most available and efficient 
distribution channel to bring the FHA loan products to the marketplace.
  While mortgage brokers originate the majority of loans, many are not 
able to offer FHA products because of the cost-prohibitive and time-
consuming financial audit and net worth requirements. This effectively 
leaves subprime loan products as the only option for many borrowers who 
would otherwise qualify for an FHA.
  Now, let me say the subprime market is extremely beneficial and it 
needs to be relevant. But today you have many predators in that 
marketplace that are making loans to people that they know they cannot 
repay. The bill before us today includes language to replace FHA's net 
worth and audit requirement with a surety bond to allow more mortgage 
brokers to offer FHA products. This will ensure that the home buyers 
are given the option of a FHA product when they seek the services of a 
mortgage broker.
  I would like to say a word about the affordable housing fund included 
in this bill. While I opposed a similar fund when it was attached to 
the GSE reform bill, I want my colleagues to know that I support this 
fund because an amendment I offered at the markup was accepted by 
Chairman Frank to essentially say, and these are arguments that have 
been made against this, that the HUD must ensure that FHA insurance 
premiums are, one, as low as possible; two, that the insurance fund is 
solvent; and, three, that any FHA needs are met before excess dollars 
are sent to the housing fund. Virtually it says that FHA has the 
dollars, they will use the dollars, and when it's not needed, then 
those dollars will be forwarded to the fund.

                              {time}  1230

  After that I firmly believe that the FHA funds should be dedicated to 
housing. We do this for the highway fund when we charge a gas tax. 
Those taxes are dedicated to repairing our roads and highways in this 
country. We should do this with the FHA too. The FHA money we are 
talking about is money that currently is going to the treasury.
  Now more than ever Congress must pass FHA legislation so that we can 
remove the impediments to the utilization of the FHA and ensure that it 
once again helps working families across the country so that they have 
an opportunity to achieve and maintain homeownership. This is an 
important reform that will help many families avoid foreclosures.
  Most of the people, and I would say, all the organizations in the 
industry who are looking to help people who are in trouble today 
support this bill. They also support the GSE reform bill that we put 
forward because it does one thing: It provides long-term stability and 
liquidity to the marketplace. The goal of this bill is to ease the 
burdensome problems people are facing today. They are looking at losing 
their homes. We are saying let's provide long-term liquidity and help 
them maintain their homes.
  Ms. WATERS. Madam Chairman, I yield 2 minutes to the gentlewoman from 
New York (Mrs. Maloney), Financial Institutions and Consumer Credit 
Subcommittee Chair.
  Mrs. MALONEY of New York. Madam Chairman, I thank the gentlewoman for 
her extraordinary leadership, really creative leadership, along with 
Barney Frank and others.
  I rise in support of the bill, which will revitalize the FHA and will 
ultimately assist low- and modern-income families seeking the American 
Dream of homeownership and providing much-needed stability and 
liquidity in the markets with the subprime crisis.
  I thank the gentlewoman for accepting an amendment that I authored 
that would expand affordable and available daycare by giving an 
incentive to build or include licensed child care facilities in FHA-
insured properties.
  This bill does many things that are very important. It builds on the 
President's recent announcement that FHA will work with homeowners who 
are having a difficult time paying their mortgage due to a reset in 
this interest rate. This will help with the subprime crisis by, number 
one, increasing the loan limits in high-cost areas of the country like 
New York City where FHA has been driven from the market, forcing many 
borrowers to turn to high-cost financing. It will, secondly, authorize 
zero down and lower down payment FHA loans for home buyers who could 
not otherwise make these payments. It directs FHA to underwrite to 
borrowers with higher credit risks than FHA currently serves. And it 
permanently eliminates the current statutory volume cap on FHA reverse 
mortgage loans to permit this program to meet the growing needs of home 
equity-rich, cash-poor senior citizens and, very importantly, 
reinvesting the increased profits created into an affordable housing 
fund.
  With all the great things in this bill, I am concerned that we may be 
loosening the reins a bit too much by allowing mortgage brokers to 
bypass the current audit and net worth requirements and instead posting 
a surety bond to participate in FHA. I have been very concerned with 
the role the largely unregulated mortgage broker industry has played in 
the current subprime mortgage crisis.
  I do support this bill, and I hope we can work to ensure the safety 
and soundness of FHA and we are expanding affordable and available 
housing. And congratulations to Chairman Waters.
  Mrs. BIGGERT. Madam Chairman, at this time I would like to yield 3 
minutes to the gentlewoman from West Virginia (Mrs. Capito), who is now 
going to assume the role as the ranking member of the Housing 
Subcommittee.
  Mrs. CAPITO. Madam Chairman, I would like to first thank my good 
friend the gentlewoman from Illinois for yielding to me and also for 
her leadership as the ranking member on the Housing Subcommittee. She 
has left big shoes for me to fill, but I know she is not going to be 
too far away on the committee, so I can lean on her for help.
  I also look forward to working with Chairwoman Waters on this 
committee. I know we will work well together as you all have set up a 
great pattern of bipartisanship on the Housing Subcommittee. So thank 
you very much for your leadership.
  The legislation we are considering today is an important step towards 
stabilizing a housing market that has been in a steady decline over 
this past year. While many of us were working in our districts over the 
recess period, our financial systems were experiencing a bit of a 
credit crunch, due in part to the problems in the subprime housing 
markets.
  Many of the problems we are facing in the housing market are due to 
individuals with credit challenges and inexperienced first-time home 
buyers utilizing very complex and creative financing tools to allow 
them to purchase a home which they would otherwise not be able to do.
  Homeownership is something that we all aspire to, and I am proud to 
say that my State of West Virginia has some of the highest 
homeownership in the country, over 70 percent, because with 
homeownership comes solid community involvement, comes better economic 
health, and also better socialization and education levels.

[[Page 24532]]

  The use of interest-only and adjustable-rate mortgages is now causing 
problems as these mortgages is now resetting at much higher rates, 
frequently unaffordable rates causing an increase in foreclosures.
  The reforms to the FHA will help provide stability in the housing 
market by providing greater assistance to new and riskier home buyers. 
Some of the reforms I would like to highlight are the extension of the 
maximum length for an FHA loan from 35 to 40 years; directing the FHA 
to serve high-risk home buyers while lowering upfront fees for high-
risk buyers; allowing for a zero down payment for first-time home 
buyers, and I'm hearing today also for those who are FHA qualified; and 
authorizing an increase in FHA loan limits for both rural and urban 
areas.
  The final component is especially important because in many areas the 
current loan limits are outpriced by many larger metropolitan areas. 
These expanded limits will help many buyers access stable and secure 
loans so they can achieve the goal of homeownership.
  Each of these reforms has bipartisan support, and we must continue to 
work together in order to provide much-needed assistance to our 
struggling homeowners.
  Again, I would like to thank Chairwoman Waters and Ranking Member 
Biggert for their hard work on this critical legislation.
  Ms. WATERS. Madam Chairman, I yield 2 minutes to the gentleman from 
Minnesota (Mr. Ellison), who is focused on predatory lending.
  Mr. ELLISON. Madam Chairman, I would like to thank Chairwoman Waters 
and Chairman Frank for bringing this bill to the floor today before the 
body.
  H.R. 1852 makes significant improvements to the current Federal 
Housing Administration policy at a time that is crucial to American 
working families and to our Nation's economy. It comes before us at a 
time when the unstable housing market has brought disruption to our 
economy, world financial markets, but, most importantly, in our 
neighborhoods. By expanding the availability of FHA loans and using the 
new revenue to create an Affordable Housing Trust Fund, we are helping 
to make the dream of homeownership not just an illusion but a real 
possibility. Once again, I want to thank the sponsors of this 
legislation and urge support of the bill.
  I would also like to point out that the mortgage foreclosure crisis 
in America continues to get worse. Mortgage foreclosures are now at a 
level previously seen only at the height of the Great Depression, and 
it is only predicted to get worse going into the fall and winter. In 
August, foreclosures nationwide were up 115 percent from 2006. 
Hopefully, this important piece of legislation will help make the 
American Dream of homeownership not just an illusion but a real 
possibility.
  Mrs. BIGGERT. Madam Chairman, I have no further requests for time, 
and I reserve the balance of my time.
  Ms. WATERS. Madam Chairman, I yield 1\1/2\ minutes to the gentlewoman 
from California, Ms. Barbara Lee.
  Ms. LEE. Madam Chairman, I rise today in strong support of the 
Expanding American Homeownership Act of 2007. I want to thank Chairman 
Frank and Chairwoman Waters for their leadership and their commitment 
to revitalize the FHA and provide critical assistance to those who have 
been affected by this crisis, which is, unfortunately, reverberating 
across our country and the entire world.
  Many hardworking Americans that may otherwise not have been able to 
qualify for a loan were lured into a fantasy universe of low rates and 
even lower payments by unscrupulous lenders. However, reality has 
kicked in, and those most affected are the elderly, single parents, and 
members of minority populations.
  This bill is a critical first step to help those who have been caught 
up in this nightmare. For instance, current FHA rules prevent the FHA 
from making loans beyond the local median home price. This bill will 
increase loan limits to make FHA relevant in those areas. This is a 
crucial fix which will provide assistance in high markets like mine in 
California in the Ninth Congressional District in Northern California.
  This bill also increases funding for housing counseling, which helps 
to ensure that those who achieve the American Dream of owning a home 
can keep it. With a good job and good credit, this bill will allow, for 
instance, those who want to deal with down-payment assistance to 
qualify for a loan by providing that down-payment assistance. It 
addresses authorizing a zero or lower down payment on loans for 
borrowers.
  I want to thank Congresswoman Waters and Mr. Frank for making housing 
an important national priority.
  Mrs. BIGGERT. Madam Chairman, I reserve the balance of my time.
  Ms. WATERS. Madam Chairman, I yield 1\1/2\ minutes to the gentleman 
from Maryland, Congressman Cummings.
  Mr. CUMMINGS. Madam Chairman, I want to thank Ms. Waters for this 
absolutely brilliant legislation, very comprehensive, and I also want 
to thank Chairman Barney Frank.
  Madam Chairman, later today the Fed is expected to lower interest 
rates for the first time in 4 years to protect the economy in hopes of 
making homes less expensive for people to finance certain credit card 
debt and for homeowners to take out popular home equity lines of 
credit, which often are used to pay for education, home improvements, 
or medical bills.
  The Fed's actions today will have a positive impact on homeownership, 
as will our consideration of H.R. 1852. This legislation will allow FHA 
to carry out its function of assisting creditworthy, low-income and 
credit-risk citizens in becoming homeowners. Most importantly, the FHA 
will be able to steer these people away from the predatory practices of 
the subprime mortgage industry.
  Some of the most important features of H.R. 1852 include raising the 
program's loan limit to $417,000; providing refinancing opportunities 
to borrowers struggling to meet their mortgage payments; authorizing 
zero and lower down-payment loans for qualified borrowers; and 
enhancing FHA's reverse mortgage program to help seniors pay for health 
and other expenses, by removing the loan cap to avoid program shutdowns 
and raising loan limits.
  Again, I applaud Chairman Waters for her outstanding leadership in 
this area, and I urge all of my colleagues to vote in favor of the 
bill.
  Mrs. BIGGERT. Madam Chairman, I yield myself such time as I may 
consume.
  In closing, I would really like to thank Subcommittee Chairwoman 
Waters for her work on this bill. I am pleased that the FHA 
modernization bill is moving forward, and I think that the bill that we 
will vote on today is much improved from the original draft as a result 
of constructive input from Members from both sides of the aisle. It 
contains many bipartisan provisions that I support and still contains a 
few provisions that I do not support. But it is my hope that the 
provision siphoning money away from the fund will be struck and that 
true risk-based pricing will be implemented so that FHA can serve the 
maximum number of borrowers possible. But those arguments have been 
made and have been rejected by the majority, so it is my sincere hope 
that we can further improve the bill as it continues to move through 
the legislative process.
  As I understand it, the Senate Banking Committee is scheduled to mark 
up its version of FHA reform tomorrow. So unlike last year, it appears 
that FHA reform is gaining traction in the Senate, and I hope that we 
can move this bill beyond the House during this Congress and that the 
Senate and the administration will work with us to reform this 
important program.

                              {time}  1245

  I think American families deserve a 21st-century FHA program to have 
a safe and secure mortgage product as an alternative to the dangerous 
products offered by predatory lenders. Qualified American families 
looking to keep their homes and refinance their bad mortgages, many of 
which are currently in default, deserve to do so through a modernized 
FHA.

[[Page 24533]]

  Again, I look forward to our continued work. And I would like to 
thank Chairman Waters so much. You know, as I leave as ranking member 
of this subcommittee and go over to the financial institutions, I do 
with some remorse. I really have enjoyed working with the subcommittee 
chairman on this committee, and the times that we have spent. I will 
still be on the committee, but won't have the opportunity to sit 
together and make some decisions. And I really have enjoyed every 
minute of it, the trip to New Orleans and Mississippi, as well as 
working on these bills with her. So I thank you so much. I also thank 
Chairman Frank. I think he has worked so hard on this committee.
  I kind of think I will miss it because it certainly has been the most 
active committee I think in Congress this year. Never did I dream that 
we would have at least three hearings a week and two markups and all 
the things that have gone on. But I think you've made great progress in 
the housing field, and I appreciate both of you for your concern and 
your passion for housing and making sure that low-income families will 
be able to meet their American Dream.
  With that, Madam Chair, I yield back the balance of my time.
  Ms. WATERS. May I inquire as to how much time I have remaining.
  The CHAIRMAN. The gentlewoman from California has 2 minutes 
remaining.
  Ms. WATERS. Madam Chairman and Members of the House, first I would 
like to tell the subcommittee ranking member how sad I am that we're 
not going to be working as closely together on this Subcommittee on 
Housing. I have truly enjoyed working with her. And even though she 
will remain on the committee, we perhaps won't have an opportunity to 
sit together and chat and not only make decisions, but just make fun of 
some people from time to time.
  Mr. FRANK of Massachusetts. Will the gentlewoman yield?
  Ms. WATERS. I yield to the gentleman.
  Mr. FRANK of Massachusetts. I would say that I really am very proud 
that on our committee, and the gentlewoman is right, there are some 
areas of disagreement, I think we have shown how you can have 
legitimate disagreements of governmental philosophy within a framework 
of some agreement and be able to deal with them so that the 
disagreements can be reasonably debated and don't spill over and don't 
interfere.
  And the gentlewoman is right, we have been very active; but we could 
not have been active in a very constructive way if it hadn't been for 
that spirit, and I thank her for it. And obviously we will still be 
working with her, but we do want to acknowledge how helpful she was and 
how constructive in her role as the ranking minority member.
  Ms. WATERS. I would also like to thank Mr. Bachus and Mr. Miller; Mr. 
Bachus, who has been so good to work with; Mr. Miller, who is an 
expert. We have been able to talk about things, to work out 
differences, and to move forward.
  This is a very productive overall Financial Services Committee, a 
very productive Subcommittee on Housing and Community Development. With 
people working together on both sides of the aisle, we're getting 
things done.
  This may be one of the most important pieces of legislation to pass 
this House in this session. We will be able to help people with 
refinancing. We will be able to help people stay out of foreclosure. We 
will be able to revitalize FHA, that really knows and understands how 
to provide insurance for moderate- and low-income folks who are 
desperate to be homeowners. And I am just delighted that I've had an 
opportunity to play a role.
  Madam Chairman, I yield back the balance of my time.
  Mrs. BIGGERT. Madam Chairman, I ask unanimous consent to reclaim my 
time.
  The CHAIRMAN. Is there objection to the request of the gentlewoman 
from Illinois?
  There was no objection.
  Mrs. BIGGERT. In all my thanking, I forgot to thank the staff, which 
I would really like to do, the staff of the subcommittee, Cindy Chetti, 
Tallman Johnson, Nicole Austin, Robert Gordon and Jim Clinger for all 
the work that they've done on the minority side of the aisle. And also, 
to thank, on the other side of the aisle, the Democrat staff who have 
been so helpful to us: Scott Olson, Gail Lester, Jonathan Harwitz, 
Kellie Larkin, Tom Duncan and Himay Lazarga. I thank all of them for 
all the work that they've put into this bill. And also, one of our new 
members on this side, Jason Britt, one of our new members of the staff. 
Thank you so much.
  Mr. BACA. Madam Chairman, I rise to express my strong support for 
H.R. 1852, the Expanding American Homeownership Act of 2007. This bill 
updates the FHA program so it can provide better mortgage options to 
low and moderate income families and minorities. This is important 
because the FHA program has not kept up with the needs of underserved 
communities, especially those in high cost areas like California. As a 
result, many families have turned to high cost and riskier subprime 
loans.
  Because of the high number of subprime loans granted in the last few 
years--our Nation is now in a home foreclosure crisis. The Inland 
Empire has the fourth highest rate of foreclosure filings in the Nation 
and comprised the hardest hit area in California through the first half 
of 2007. According to the Neighborhood Housing Services of the Inland 
Empire, in San Bernardino County alone there were over 19,000 
foreclosure filings in the first half of 2007. The current median home 
price in San Bernardino County is only affordable for 2 out of every 10 
families.
  H.R. 1852 will raise the FHA loan limit so that these hard-working 
families get a fair chance at getting a better deal for their home. The 
reforms in H.R. 1852 will allow the FHA program to reach into these 
underserved communities to provide low and moderate-income buyers a 
better deal at a fair price.
  Again, Madam Chairman, I express my full support of this bill and 
urge my fellow colleagues to adopt its final passage.
  Ms. CASTOR. Madam Chairman, I would like to express my support of 
H.R. 1852, the Expanding American Homeownership Act.
  I would like to thank Chairwoman Waters and Chairman Frank  for their 
hard work on behalf of American families. I am proud to support their 
effort to make the dream of homeownership reachable for hard-working 
families throughout our country.
  H.R. 1852 accomplishes many goals. It will expand the capacity of the 
FHA to ultimately help more homebuyers receive better loans. Currently 
subprime borrowers are not eligible to receive FHA loans. Under H.R. 
1852, FHA loans will become available to subprime borrowers and help to 
keep them from becoming victims of predatory lending practices when 
buying their first homes.
  Families who are currently homeowners, but were placed into mortgages 
that they were unable to afford will be eligible under H.R. 1852 to 
refinance their mortgages with the FHA. This will help families to 
recover from the hardship that so many have experienced during this 
difficult period in the mortgage market.
  One of the great provisions of the Expanding American Homeownership 
Act is that it will authorize up to $300 million per year to be put 
into the Affordable Housing Trust Fund, to assist in building more 
affordable housing for working families. This fund will work alongside 
of an effort in my home state of Florida by Governor Charlie Crist to 
increase funding for initiatives to build affordable housing and to 
provide added assistance to first-time home buyers.
  In my district in the Tampa Bay area, 10,173 of my neighbors found 
that their homes fell into foreclosure within the first six months of 
this year. The Tampa Bay area is ranked 24th in home foreclosures among 
the largest 100 metropolitan areas in the country.
  On Monday, members of my community gathered to hear the story of 
Isaline Wyatte. Isaline's lender told her last month that her house was 
going to be auctioned off. Isaline was facing foreclosure. Fortunately, 
Isaline was proactive and was able to take the needed steps to finding 
assistance to restructure her loan and keep her home. Isaline's journey 
was a struggle, but with the passage of H.R. 1852, homeowners like 
Isaline will have an added place to turn before foreclosure threatens 
to leave their families without a home.
  Madam Chairman, there are thousands of children, seniors and veterans 
that are living in fear that soon they will lose their homes. This is a 
crisis and H.R. 1852 is an excellent step toward helping not only 
first-time homebuyers, but also to help homeowners in trouble to get 
back onto their feet. Families will have a

[[Page 24534]]

greater opportunity to find a home and stay in that home.
  Mrs. CHRISTENSEN. Madam Chairman, homeownership is the key to 
achieving financial independence. Yet, there is still a persistent gap 
in homeownership between minorities and non-minorities. According to 
HUD, despite increases in minorities who become homeowners, the census 
figures show that large differences in rates between minority and white 
household ownerships remain and have narrowed only slightly.
  If this gap is to be narrowed or eliminated all together, we must 
break down the barriers faced my minority families and lower and middle 
income families that make it difficult for them to obtain the American 
dream of homeownership. These barriers include but are not limited to 
lack of capital for the down payment and closing costs, lack of access 
to credit and poor credit history, lack of understanding and 
information about home buying program and continued housing 
discrimination. Not to mention, the recent mortgage crisis caused by 
sub-prime lenders and predatory lenders.
  This is why I strongly support H.R. 1852, a bill that would modernize 
the National Housing Act and enable the Federal Housing Administration 
to use risk-based pricing to more effectively reach underserved 
borrowers and make other needed changes to offer a better product. 
Increasing the FHA loan limits will allow homebuyers in high cost areas 
like the District of Columbia and my district, the US Virgin Islands, 
to benefit from the FHA advantages that users in less costly parts of 
the country enjoy. The bill would also provide FHA with the flexibility 
to offer varying down payment terms thereby eliminating the barrier of 
down payment and settlement costs for more aspiring homebuyers. Most 
importantly, H.R. 1852 would provide American homeowners with a safe 
and affordable mortgage alternatives. This is greatly needed at time 
when home buyers. Most importantly, H.R. 1852 would provide American 
homeowners with a safe and affordable mortgage alternatives. This is 
greatly needed at time when homebuyers are being lured by the 
attractive but misguided terms offered by the subprime and predatory 
lenders.
  H.R. 1852 will bring a much needed stability to the mortgage market. 
It is supported by my local realtors and the National Association of 
Realtors, as well as many other organizations. I commend Congresswoman 
Maxine Waters for her work on this bill and urge my colleagues to 
support its passage.
  Mr. SIRES. Madam Chairman, I rise in opposition to this amendment. I 
keep hearing time and time again from my constituents that they cannot 
afford a safe home for their children. I know this is a problem for 
many Americans across the country. In fact, recent research has 
indicated that in order to afford a modest two-bedroom apartment paying 
no more than 30 percent of their income for housing and working full 
time, a New Jersey family would need to earn over $20.00 an hour. Wages 
are simply not increasing fast enough to allow many families to even 
come close to this affordable housing wage.
  Families need help. That is why I am so supportive of the Affordable 
Housing Trust Fund and the revenues that H.R. 1852 will provide to the 
Fund. This fund will increase home ownership and increase mortgage 
funding in areas of chronic economic distress. By increasing the level 
of home ownership, we will then increase the supply of rental housing 
for families. And where needed, we will increase our investment in 
affordable housing infrastructure to make a safe and affordable home a 
reality for every hardworking American.
  I urge my colleagues to vote against this amendment that would strike 
the affordable housing trust fund and I urge everyone to vote in 
support of final passage the Expanding American Home Ownership Act of 
2007.
  Mrs. JONES of Ohio. Madam Chairman, I rise today in support of H.R. 
1852, the Expanding American Homeownership Act of 2007. I commend the 
chairman of the Financial Services Committee, Barney Frank and 
Congresswoman Maxine Waters, the author of this bill, for their 
leadership on this issue.
  The meltdown of the mortgage industry, predatory lending practices 
and excessive foreclosures is an opportunity for the Federal Housing 
Administration (FHA) to reassert its traditional role of meeting unmet 
mortgage market needs. H.R. 1852 is intended to increase the market 
share of mortgages insured by Federal Housing Administration (FHA), and 
to encourage greater stability in the mortgage market in coming years. 
It raises loan limits for FHA-backed loans, boosts loan limits in high-
cost areas, allows the agency to vary the premiums it charges borrowers 
based on their credit risk, modifies disclosure requirements to provide 
more information concerning mortgage choices, and allows for lower 
monthly payments for borrowers who make on-time payments for the first 
5 years of a loan. It also extends the maximum loan term on FHA single-
family loans to 40 years from 35 years.
  Predatory lending is a leading cause of foreclosures across this 
country. It compromises the opportunity to own a home and hinders 
economic stability, creating greater disparities in wealth. In my home 
State of Ohio, new foreclosure cases grew by 24 percent in 1 year. 
Cuyahoga County led the State in new cases with 13,610 new filings last 
year. This ranking has attracted national attention with Ohio's 
foreclosure rate currently at 18 percent which is higher than the 
national average of 17 percent.
  Subprime lending provides affordable mortgage credit to borrowers 
with less than perfect credit histories, but who are still 
creditworthy. Predatory lending occurs when lenders impose excessive 
rates and fees, prepayment penalties, and reset terms that can result 
in exorbitant interest rate increases. I believe that FHA could serve 
subprime borrowers at more attractive rates and provide fairer mortgage 
opportunities than predatory lenders.
  I applaud provisions in the bill that require FHA to provide 
``payment incentives'' for borrowers that make on-time payments for at 
least the first 5 years of a loan. The measure authorizes the 
department to offer these incentives to borrowers after a period of 3 
years of on-time payments.
  I am especially pleased and support provision in the bill which 
authorizes funds from FHA profits, to be used for an affordable housing 
fund. This fund is key because it would provide grants to support 
affordable rental housing and homeownership opportunities for low-
income families.
  Over the past 2 weeks, I have participated in home preservation 
workshops, where I have had an opportunity to meet with various 
organizations and lenders in my congressional district to discuss loss 
mitigation plans for homeowners that are in loans set to readjust to 
higher rates as well as those that are facing foreclosure. 
Representatives of lenders, servicers, housing counseling agencies, and 
State, county and Federal housing officials have been on site to meet 
with individuals to discuss their personal situations.
  To help stem the tide of growing foreclosures, I have reintroduced 
the Predatory Lending Practice Reduction Act, H.R. 2061. This 
legislation calls for Federal certification of mortgage brokers and 
agents and stiffer penalties for violation of Federal law. 
Additionally, it will authorize funding for Community Development 
Corporations to provide training and counseling on the home buying 
process. Not all subprime lenders are predatory, but most predatory 
loans are subprime loans. This legislation would work to weed out the 
bad actors that are responsible for equity stripping and other 
predatory practices.
  I am pleased that the Financial Services Committee brought this bill 
to House floor for a vote today. It is a great piece of legislation 
which I support wholeheartedly. I look forward to working with the 
Financial Services Committtee to advance my legislation, H.R. 2061 
which would protect borrowers from unscrupulous lending practices.
  One of the first steps toward creating wealth is homeownership and I 
want to make sure that everyone is given the opportunity to not only 
attain but retain that goal.
  Ms. WOOLSEY. Madam Chairman, I rise today in support of this bill, 
which will help hundreds of thousands of families realize the American 
Dream of homeownership. This bill helps protect those vulnerable to 
unscrupulous subprime lending, and helps those who are currently 
struggling to make their payments by refinancing their loans at a more 
affordable rate.
  It is not right for anyone to be struggling to meet his or her 
mortgage payments due to the unfair lending practices of predatory 
lenders. Putting lower-income families on the path to homeownership 
helps them become more financially solvent, and helps them have more of 
a stake in the health of their community. Homeownership leads to 
healthy families, healthy communities, and rosier financial situations 
for all.
  I also applaud the passage of an amendment introduced by Chairman 
Frank that will help more families, in my district specifically, afford 
homes. This amendment raises the Federal Housing Administration's 
single-family loan limits so that lower-income families are not barred 
from buying homes in the higher-cost markets where they may work. Why 
should a firefighter who works in my district be forced to commute a 
long way to her or his home instead of buying an affordable home near 
the fire station? This amendment will allow potential residents of 
high-price home markets to afford homes.

[[Page 24535]]

  This is a good bill that will help America's families in numerous 
ways. I thank my colleague Maxine Waters for introducing it and look 
forward to benefits it will bring to the hard-working families in my 
district.
  Mr. HINOJOSA. Madam Chairman, today the House passed H.R. 1852, the 
``Expanding American Homeownership Act of 2007.'' I am in favor of the 
bill and am submitting the following letters in support of the 
legislation for the Record: A letter from the National Association of 
Realtors; a letter from the Mortgage Bankers Association; and a letter 
from the National Association of Mortgage Brokers.

                             National Association of Realtors,

                               Washington, DC, September 14, 2007.
     House of Representatives,
     Washington, DC.
       Dear Representative: On behalf of the 1.3 million members 
     of the National Association of REALTORS, I urge you to 
     support H.R. 1852, the ``Expanding American Homeownership Act 
     of 2007'', when the bill is considered by the full House. 
     This is an important measure that will allow FHA to function 
     in the 21st century. Equally important and worthy of your 
     strongest support is an amendment to be offered by 
     Representatives Barney Frank (D-MA), Gary Miller (R-CA) and 
     Dennis Cardoza (D-CA) that is vital to improving the 
     stability of mortgage markets, a critical component of our 
     national economy.
       The Frank/Miller/Cardoza amendment would increase the 
     Federal Housing Administration (FHA) loan limits beyond the 
     language originally included in H.R. 1852. Such an increase 
     is now needed in light of the significant housing and 
     mortgage market turmoil that has severely limited the ability 
     of families to refinance a problematic existing loan or, 
     alternatively, purchase a home in a high cost market with a 
     safe and affordable mortgage.
       As you well know, many American homeowners now have 
     mortgages with payments that will soon increase dramatically, 
     putting them at risk of foreclosure. Raising the FHA loan 
     limits will provide many of these homeowners living in the 
     nation's high housing cost markets with a safe FHA loan 
     alternative. In addition, with the even more recent 
     tightening of the jumbo market, many homebuyers may not be 
     able to find a safe, affordable financing option without an 
     increase in the FHA loan limits.
       Although the underlying bill would increase the loan 
     limits, we strongly believe that the Frank/Miller/Cardoza 
     amendment is needed to effect real change. H.R. 1852 creates 
     a new loan ceiling of $417,000. Many markets are 
     significantly higher than this limit. Median home prices of 
     communities in New York, New Jersey, Connecticut, California, 
     Massachusetts, and Pennsylvania are already far above this 
     limit. The Frank/Miller/Cardoza amendment creates geographic 
     fairness by raising the loan limit to 125% of the area median 
     home price. Under the amendment working families in Newark, 
     NJ can buy a home for $512,000, and families in Los Angeles, 
     CA can buy homes for $650,000--both median price homes for 
     their area.
       FHA reform is needed now, more than ever. Please vote for 
     H.R. 1852 and the Frank/Miller/Cardoza amendment when these 
     measures come to the Floor.
           Thank you,

                                                 Pat V. Combs,

                                                   2007 President,
                                 National Association of Realtors.
                                  ____
                                  


                                 Mortgage Bankers Association,

                               Washington, DC, September 17, 2007.
     Hon. Steny H. Hoyer,
     Majority Leader, House of Representatives, Washington, DC.
     Hon. John A. Boehner,
     Republican Leader, House of Representatives, Washington, DC.
       Dear Leader Hoyer and Leader Boehner: On behalf of the 
     Mortgage Bankers Association (MBA), I am writing to express 
     our strong support for H.R. 1852, the Expanding American 
     Homeownership Act of 2007, and strongly urge Members of the 
     House of Representatives to support the legislation when it 
     comes to the House floor. At the same time, MBA is also 
     concerned about a provision that would liberalize the 
     requirements for mortgage broker participation in FHA, as 
     well as certain amendments that may be offered. Passage of a 
     strong and workable FHA bill is critical in addressing the 
     current market situation and consumer needs.
       H.R. 1852, introduced by Representative Maxine Waters, 
     passed the Committee on Financial Services by a bipartisan 
     vote of 45-19 on May 3, 2007. The legislation has been under 
     consideration for several years now, and similar legislation 
     passed the House of Representatives in 2006 by a vote of 415-
     7.
       The Expanding American Homeownership Act of 2007 would 
     achieve several key public policy goals. The bill will make 
     it easier for first-time homebuyers and lower-income 
     Americans to purchase a home by modernizing the Federal 
     Housing Administration (FHA) and giving it the ability to 
     offer viable products in today's changing mortgage market. 
     The bill ensures investment in FHA's personnel and 
     technology, bringing this important mortgage insurer into the 
     21st century.
       The bill would increase FHA's loan limits, allowing FHA-
     insured lending in states and communities where today's 
     housing prices make FHA mortgage products unavailable to 
     borrowers. The bill also gives FHA's management additional 
     flexibility to offer new mortgage products without getting 
     Congress' blessing each time. Since FHA's programs actually 
     generate more funds for the U.S. Treasury than it pays out in 
     claims and administrative costs, the bill would establish 
     that a portion of the excess funds be put aside for new 
     affordable housing production through an affordable housing 
     trust fund, which we support.
       Since this bill last passed the House in 2006, we have seen 
     significant disruptions in the nation's housing market. In 
     particular, many homeowners are finding themselves in 
     distress, unable to pay their adjustable rate mortgages after 
     interest rates have steadily increased and home values have 
     declined in some areas. FHA can be an important tool to help 
     these consumers get out of financial trouble. If this bill 
     should become law, many more borrowers will be able to use 
     FHA's products to avoid foreclosure.
       A significant area of concern we continue to have with this 
     legislation deals with how mortgage brokers will qualify to 
     sell FHA-insured products. Under current guidelines, all 
     mortgage brokers and loan correspondents must submit audited 
     financial statements that are in accordance with the 
     Government Accountability Office's Government Auditing 
     Standards. HUD program managers, in turn, use these audits to 
     determine if these entities use internal controls to provide 
     reasonable assurance that FHA requirements are followed, 
     expend federal funds properly with supporting documentation 
     and meet fair housing and nondiscrimination requirements. At 
     a time of rising defaults, it is critical to both FHA and its 
     customers that adequate supervisory processes remain in 
     place. In Committee, MBA opposed the bill's provisions that 
     would eliminate this important audit requirement and thereby 
     weaken the FHA's safety and soundness. We hope to continue to 
     work with the Committee and the House on this issue as the 
     bill moves through the legislative process.
       We understand that a series of amendments to the 
     legislation may be made in order. We believe that it would be 
     unwise to require counseling for borrowers as provided for in 
     an amendment filed by Representative Patrick Tiberi. First, 
     it is expensive, and for many homebuyers, completely 
     unnecessary. Second, many real estate agents and mortgage 
     brokers will push homebuyers away from an FHA product if a 
     home purchase could fall through because the potential buyer 
     has to wait several weeks or more to arrange a counseling 
     session. Counseling should be targeted to those who need it, 
     and we believe the bill, as written, strikes the right 
     balance in giving the HUD Secretary significant tools to help 
     consumers get the counseling they need. The point of this 
     bill is to empower FHA to make its products more useful to 
     the market and borrowers. Mandating counseling would have the 
     opposite effect.
       Another possible amendment, expected to be offered by 
     Financial Services Chairman Barney Frank, Representative Gary 
     Miller and Representative Dennis Cardoza, would increase the 
     FHA loan limit to a level above the GSE conforming loan limit 
     in certain high-cost areas. We believe that FHA should 
     continue to focus on helping low- and moderate-income 
     borrowers purchase or refinance housing. Without further 
     study on the impacts of such a change, we do not believe it 
     would be wise to allow FHA loan limits to exceed GSE 
     conforming loan limits.
       Finally, an amendment may be proposed that would allow 
     qualified downpayment assistance programs to continue if 
     certain conditions are met. Downpayment assistance programs 
     are an important part of the FHA program, but some changes 
     are needed to avoid continued abuses. We believe that the 
     changes made by Representative Gary Miller's amendment would 
     mark a significant improvement in how these programs operate.
       Thank you for the opportunity to share our views on this 
     legislation. We urge Members of the House of Representatives 
     to support this important legislation.
           Sincerely,
                                             John M. Robbins, CMB,
                                                     MBA Chairman.
                                  ____
                                  
                                           National Association of


                                             Mortgage Brokers,

                                               September 17, 2007.
       Dear Representative: On Tuesday, the United States House of 
     Representatives will vote on H.R. 1852, the ``Expanding 
     American Homeownership Act of 2007'' introduced by Rep. 
     Maxine Waters (D-CA) and House Financial Services Committee 
     Chairman Barney Frank (D-MA). On behalf of the National 
     Association of Mortgage Brokers (NAMB), its 49 state 
     affiliates, 25,000 members/member companies, and hundreds of 
     thousands of mortgage brokers, I respectfully urge you to 
     support passage of this much-needed legislation to help the 
     millions of Americans who are in need of safe and affordable 
     mortgage products.
       The need to reform and enhance the Federal Housing 
     Administration (FHA) is critical so that it can respond 
     adequately to the

[[Page 24536]]

     needs of consumers and the market today. H.R. 1852 includes 
     provisions that will:
       Strengthen the FHA program by raising FHA mortgage limits 
     nationwide in all communities, but especially in high-cost 
     areas where consumers are most often in need of affordable 
     mortgage financing options;
       Allow FHA to offer flexible down payment terms and simplify 
     the down payment process to aid homebuyers in overcoming a 
     significant barrier to homeownership;
       Allow FHA to price loans according to a borrower's risk;
       Update FHA's successful reverse mortgage program; and
       Increase the availability of FHA loan products to first-
     time, minority and low- to moderate income homebuyers by 
     expanding the distribution channels that serve FHA.
       NAMB supports H.R. 1852 as approved by the House Financial 
     Services Committee earlier this year, but also favors a 
     further increase in the FHA loan limits as proposed by an 
     amendment expected to be offered by Chairman Frank (D-MA) and 
     Reps. Miller (R-CA) and Cardoza (D-CA). Unfortunately, 
     because FHA has been driven from those parts of the country 
     where consumers are most in need of affordable financing, 
     such as California, millions of borrowers have been forced to 
     turn to high-cost financing and other non-traditional loan 
     products. I urge you to support the bi-partisan amendment 
     offered that calls for a further increase in FHA loan limits 
     from $417,000 to $500,000, in order to better accommodate 
     those borrowers living in high-cost areas of the country.
       NAMB believes the reforms contained in H.R. 1852 will 
     provide long-overdue modernization to the FHA, which will 
     revitalize and increase participation in the FHA program. 
     Please take this opportunity to restore confidence and 
     stability in the mortgage market and once again make FHA 
     loans a real choice for borrowers by voting in support of 
     H.R. 1852.
           Sincerely,
                                        George Hanzimanolis, CRMS,
                                                President of NAMB.

  Mr. UDALL of Colorado. Madam Chairman, I rise in support of the 
Expanding American Homeownership Act. Homeowners in Colorado and 
nationwide are facing a crisis and passage of this bill will ensure 
continued access to responsible, safe, and affordable mortgage options.
  There are serious problems with our country's mortgage lending 
market. Foreclosure rates are rising, housing prices are stagnating and 
too many Americans are surprised to find their monthly payments on the 
rise. While the difficulties in the lending market have so far been 
concentrated in subprime loans, which generally go to borrowers with 
limited or damaged credit, these problems have caused serious and 
sometimes irreparable economic damage to families and communities of 
all income levels throughout the Nation.
  I am pleased that this legislation modernizes the Federal Housing 
Administration, FHA, to provide lower monthly payments for borrowers 
who make on-time payments, raises the loan limits on FHA loans and 
allows the FHA to vary premiums based on their credit risk. These 
provisions, among others, will allow consumers to choose a more 
reliable mortgage as opposed to other mortgages that could impose 
excessive rates and fees, prepayment penalties, and reset terms that 
can result in exorbitant interest rate increases.
  While this bill is not a complete fix for the problem, it is an 
important step in the right direction. It is vital to provide FHA with 
the flexibility to respond to the mortgage crisis to help families in 
Colorado and the Nation to retain and purchase or a home. I urge a 
``yea'' vote.
  Ms. McCOLLUM of Minnesota. Madam Chairman, I rise today in strong 
support of the Expanding American Homeownership Act and commend the 
Democratic leadership, Chairman Frank, and Chairman Waters for their 
commitment to increasing access to affordable housing.
  Our country is currently in the middle of a subprime mortgage crisis. 
In my congressional district alone, there are 796 homes involved in 
foreclosure right now. The University of Minnesota's Center for Urban 
and Regional Affairs report, Subprime Lending and Foreclosure in 
Hennepin and Ramsey Counties, speculates that the problem of 
foreclosures starts with predatory lending practices that are aimed at 
removing equity from homes through refinancing a home multiple times.
  H.R. 1852 takes an important step to prevent American families from 
ever having to turn to a predatory lender by providing them with a 
reliable source for affordable mortgage loans. This legislation 
revitalizes and reforms the Federal Housing Administration, FHA, 
enabling it to serve more subprime borrowers, offer refinancing to 
families struggling to make mortgage payments, and create additional 
affordable rental housing.
  This legislation also authorizes more than double the current funding 
level for housing counseling to help subprime home buyers, higher risk 
borrowers who fall behind on their mortgage payments, and those who 
need additional guidance in establishing a plan for purchasing their 
home.
  We must do more to ensure that all individuals and families have safe 
and stable housing. For this reason, the Expanding American 
Homeownership Act authorizes up to $300 million a year for an 
affordable housing trust fund, which will be financed by excess 
profits, resulting from the expansion of FHA's loan offerings.
  H.R. 1852 enables the FHA to preserve and expand its mission of 
helping potential first-time home buyers obtain affordable mortgages. I 
urge my colleagues to join me in helping more families achieve the 
America dream of home ownership by voting for this bill.
  Mr. DINGELL. Madam Chairman, I rise today to speak in favor of H.R. 
1852, the Expanding American Homeownership Act of 2007. Section 29 of 
this bill is designed to clarify congressional intent regarding certain 
properties that entered the HUD property disposition process prior to 
the enactment of the Deficit Reduction Act but where the initial 
proposed disposition was delayed. An example of one such project is 
Parkview Apartments in Ypsilanti, Michigan. While I believe that this 
particular project is already subject to the grandfathering provision 
of the DRA, Section 29 clarifies that such properties should be 
considered ``pre-DRA'' properties, and that HUD should proceed with its 
prior disposition contracts as to those properties. This clarification 
was requested by HUD and, in drafting this provision, we were assisted 
by HUD staff and were assured that this language was the clarification 
the agency needed to proceed with the 2004 contract as to Parkview 
Apartments.
  Mr. LANGEVIN. Madam Chairman, I rise in strong support of the 
Expanding American Homeownership Act of 2007 (H.R. 1852). This 
important piece of legislation will revitalize the Federal Housing 
Administration (FHA), which was established to provide a reliable 
source of affordable mortgage loans for first-time homebuyers. Through 
our efforts today, the FHA will be able to better assist America's 
working families by offering loans at affordable rates with fair terms, 
as we work to alleviate the problems caused by the continuing mortgage 
crisis.
  The lack of affordable housing has long plagued many communities 
throughout America, and the problem is particularly acute in high cost 
areas like Rhode Island. In Rhode Island, the average two-bedroom 
apartment costs $1172 per month--at that rate, many people would need 
to work two or even three jobs just to pay the rent. And the situation 
can be even worse for those struggling to buy their own homes, 
particularly in today's uncertain climate. Unscrupulous lending 
practices have taken their toll on hard-working families, who are 
increasingly unable to keep pace with their ballooning mortgage 
payments.
  The Expanding American Homeownership Act of 2007 will provide much-
needed relief for families on the brink of foreclosure. In particular, 
this targeted legislation will allow the FHA to raise loan limits in 
high cost areas and to offer zero and lower down payment loan options 
for borrowers that can afford mortgage payments, but lack the resources 
required for a down payment. H.R. 1852 will also require that an 
additional $300 million per year be placed in the affordable housing 
trust fund, which will help to provide affordable housing for years to 
come.
  Finally, I am pleased that the bill will double current funding 
levels for housing counseling services. These critical services will 
provide additional guidance to homebuyers in the subprime market and 
others who have difficulty making their monthly mortgage payments.
  In passing the Expanding American Homeownership Act today, we have 
made a commitment to the American people that we will continue to 
ensure affordable housing is available to all Americans. Strengthening 
the security of American families strengthens our economy, and I urge 
my colleagues to support this measure.
  Mrs. BIGGERT. Madam Chairman, I yield back the balance of my time.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the amendment in the nature of a substitute 
printed in the bill, modified by the amendment printed in part A of 
House Report 110-330, is adopted. The bill, as amended, shall be 
considered as an original bill for the purpose of further amendment 
under the 5-minute rule and shall be considered read.
  The text of the bill, as amended, is as follows:

[[Page 24537]]



                               H.R. 1852

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

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Expanding 
     American Homeownership Act of 2007''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:
       Sec. 1. Short title and table of contents.
       Sec. 2. Findings and purposes.
       Sec. 3. Maximum principal loan obligation.
       Sec. 4. Extension of mortgage term.
       Sec. 5. Downpayment simplification.
       Sec. 6. Mortgage insurance premiums for zero- and lower-
           downpayment borrowers.
       Sec. 7. Mortgage insurance premiums for standard and 
           higher-risk borrowers.
       Sec. 8. Risk-based mortgage insurance premiums.
       Sec. 9. Payment incentives.
       Sec. 10. Borrower protections for higher risk mortgages.
       Sec. 11. Annual reports on new programs and loss 
           mitigation.
       Sec. 12. Insurance for single family homes with licensed 
           child care facilities.
       Sec. 13. Rehabilitation loans.
       Sec. 14. Discretionary action.
       Sec. 15. Insurance of condominiums and manufactured 
           housing.
       Sec. 16. Mutual Mortgage Insurance Fund.
       Sec. 17. Hawaiian home lands and Indian reservations.
       Sec. 18. Conforming and technical amendments.
       Sec. 19. Home equity conversion mortgages.
       Sec. 20. Participation of mortgage brokers and 
           correspondent lenders.
       Sec. 21. Conforming loan limit in disaster areas.
       Sec. 22. Failure to pay amounts from escrow accounts for 
           single family mortgages.
       Sec. 23. Acceptable identification for FHA mortgagors.
       Sec. 24. Pilot program for automated process for borrowers 
           without sufficient credit history.
       Sec. 25. Sense of Congress regarding technology for 
           financial systems.
       Sec. 26. Multifamily housing mortgage limits in high cost 
           areas.
       Sec. 27. Valuation of multifamily properties in 
           noncompetitive sales by HUD to States and localities.
       Sec. 28. Clarification of disposition of certain 
           properties.
       Sec. 29. Use of FHA savings for costs of mortgage 
           insurance, housing counseling, FHA technologies, 
           procedures, and processes, and for affordable housing 
           grant fund, and study.
       Sec. 30. Limitation on mortgage insurance premium 
           increases.
       Sec. 31. Savings provision.
       Sec. 32. Implementation.

     SEC. 2. 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 Act 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. 3. MAXIMUM PRINCIPAL LOAN OBLIGATION.

       Section 203(b)(2) of the National Housing Act (12 U.S.C. 
     1709(b)(2)) 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, the median 1-
     family house price in the area, as determined by the 
     Secretary; and in the case of a 2-, 3-, or 4-family 
     residence, the percentage of such median price that bears the 
     same ratio to such median price as the dollar amount 
     limitation in effect under section 305(a)(2) of the Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for 
     a 2-, 3-, or 4-family residence, respectively, bears to the 
     dollar amount limitation in effect under such section for a 
     1-family residence; or
       ``(ii) the dollar amount limitation determined under such 
     section 305(a)(2) for a residence of the applicable size;

     except that the dollar amount limitation in effect for any 
     area under this subparagraph may not be less than the greater 
     of (I) the dollar amount limitation in effect under this 
     section for the area on October 21, 1998, or (II) 65 percent 
     of the dollar limitation determined under such section 
     305(a)(2) for a residence of the applicable size; and''.

     SEC. 4. 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. 5. 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)(I) except as provided in subclause (II), 97.75 
     percent of the appraised value of the property; or
       ``(II) in the case only of a mortgage described in 
     subsection (c)(3), 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.'';
       (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), by striking the paragraph designation 
     and all that follows through ``Provided further, That for'' 
     and inserting the following:
       ``(9) Except in the case of a mortgage described in 
     subsection (c)(3), 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''.

     SEC. 6. MORTGAGE INSURANCE PREMIUMS FOR ZERO- AND LOWER-
                   DOWNPAYMENT BORROWERS.

       Section 203(c) of the National Housing Act (12 U.S.C. 
     1709(c) is amended by adding at the end the following new 
     paragraph:
       ``(3) Zero- and lower-downpayment borrowers.--
       ``(A) Applicability.--This paragraph shall apply to any 
     mortgage that--
       ``(i) is secured by a 1- to 4-family dwelling that will be 
     occupied by the mortgagor as his or her principal residence.
       ``(ii)(I) is an obligation of the Mutual Mortgage Insurance 
     Fund or of the General Insurance Fund pursuant to subsection 
     (v) of this section; or
       ``(II) is insured under subsection (k) of this section or 
     section 234(c);
       ``(iii)(I) is executed by a mortgagor who has not had any 
     present ownership interest in a principal residence, and 
     whose spouse has not had any such interest, during 12-month 
     period ending upon purchase of the residence with the 
     mortgage to which this paragraph applies, except that this 
     subclause shall be considered a program to assist first-time 
     homebuyers for purposes of section 956 of the Cranston-
     Gonzalez National Affordable Housing Act (42 U.S.C. 12713); 
     or
       ``(II)(aa) is made to pay or prepay, and fully extinguish, 
     the outstanding obligations under an existing mortgage or 
     mortgages on the same property; and
       ``(bb) involves a principal obligation not exceedign the 
     amount necessary to fully pay or prepay such outstanding 
     obligations under the existing mortgage or mortgages, plus 
     any charges and fees involved in such transaction and any 
     charges and fees in connection with the payment or prepayment 
     of such outstanding obligations; and
       ``(iv)(I) involves a principal obligation that does not 
     comply with subclause (I) of subsection (b)(2)(B)(ii) 
     (relating to loan-to-value ratio); or
       ``(II) is executed by a mortgagor who has not 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).
       ``(B) Up-front premiums.--The amount of any single premium 
     payment collected at the time of insurance may not exceed 3.0 
     percent of the amount of the original insured principal 
     obligation of the mortgage.
       ``(C) Annual premiums.--Except as provided in subparagraph 
     (D), the amount of any annual premium payment collected may 
     not exceed 0.75 percent of the remaining insured principal 
     obligation of the mortgage.

[[Page 24538]]

       ``(D) Annual redetermination of premium rate.--The 
     Secretary shall redetermine the rates of premiums not less 
     than once every 12 months.''.

     SEC. 7. MORTGAGE INSURANCE PREMIUMS FOR STANDARD 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) by striking the matter that precedes subparagraph (A) 
     and inserting the following:
       ``(2) Standard-risk mortgages.--In the case of any mortgage 
     that is secured by a 1- to 4-family dwelling, is an 
     obligation of the Mutual Mortgage Insurance Fund or of the 
     General Insurance Fund pursuant to subsection (v) of this 
     section or is insured under subsection (k) of this section or 
     section 234(c), for which the mortgagor has 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), and that involves a 
     principal obligation that complies with subclause (I) of 
     subsection (b)(2)(B)(ii), the following requirements shall 
     apply:''; and
       (2) 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. 8. 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 Act, 
     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 (3)(A) for which 
     the loan application is received by the mortgagee on or after 
     October 1, 2007:
       ``(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 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. 9. PAYMENT INCENTIVES.

       Section 203(c) of the National Housing Act (12 U.S.C. 
     1709(c)), as amended by the preceding provisions of this Act, 
     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) or (3):
       ``(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--
       ``(I) in the case of a mortgage referred to in paragraph 
     (3), to an amount that does not exceed the amount of the 
     maximum annual premium allowable under paragraph (2)(B); and
       ``(II) in the case of a mortgage referred to in paragraph 
     (2)(C), 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) in the case only of a mortgage referred to in 
     paragraph (2)(C), 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. 10. BORROWER PROTECTIONS FOR HIGHER RISK MORTGAGES.

       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) Borrower protections for certain mortgages.--Except 
     as otherwise specifically provided in this paragraph, in the 
     case of any mortgage referred to in paragraph (2)(C) or (3) 
     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--

       ``(aa) a list of counseling agencies approved by the 
     Secretary in the area of the applicant; and
       ``(bb) if the mortgagor is not provided counseling in 
     accordance with subparagraph (B), the information required 
     under subclauses (I), (II), and (III) of subparagraph 
     (B)(iii) to be provided to the mortgagor.

       ``(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) or (3) 
     of subsection (c), as applicable.

       ``(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) Allowable requirement.--The Secretary may, in the 
     discretion of the Secretary, 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 application 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.

[[Page 24539]]

       ``(iii) Topics.--In the case only of a mortgage referred to 
     in subsection (c)(3), counseling under this subparagraph 
     shall include providing to, and discussing with, the 
     mortgagor--

       ``(I) information regarding homeownership options other 
     than a mortgage that is subject to this paragraph, other 
     zero- or low-downpayment mortgage options that are or may 
     become available to the mortgagor, the financial implications 
     of entering into a mortgage (including a mortgage subject to 
     this paragraph), and any other information that the Secretary 
     may require;
       ``(II) a written disclosure that sets forth the amount and 
     the percentage by which a property with a mortgage that is 
     subject to this paragraph must appreciate for the mortgagor 
     to recover the principal amount of the mortgage, the costs 
     financed under the mortgage, and the estimated costs involved 
     in selling the property, if the mortgagor were to sell the 
     property on each of the second, fifth, and tenth 
     anniversaries of the mortgage; and
       ``(III) a written disclosure, as the Secretary shall 
     require, that specifies the effective cost to a mortgagor of 
     borrowing the amount by which the maximum amount that could 
     be borrowed under a mortgage that is referred to in 
     subsection (c)(3) exceeds the maximum amount that could be 
     borrowed under a mortgage insured under this subsection that 
     is not a mortgage referred to in such subsection, based on 
     average closing costs with respect to such amount, as 
     determined by the Secretary; such cost shall be expressed as 
     an annual interest rate over the first 5 years of a mortgage; 
     the disclosure required under this subclause may be provided 
     in conjunction with the notice required under subsection (f).

       ``(iv) 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.''.

     SEC. 11. 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, the Secretary may issue 
     mortgages to borrowers in default or at risk of default.--In 
     facilitating insurance for such mortgages, the Secretary may 
     issue 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. 12. 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 programs for mortgage insurance under paragraphs 
     (2)(C) and (3) 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. 13. 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 Act, 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. 14. 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. 15. 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. 16. 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

[[Page 24540]]

     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 Act, 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. 17. 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 2007, 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
       ``(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. 18. 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. 19. 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. 20. HOME EQUITY CONVERSION MORTGAGES.

       (a) In General.--Section 255 of the National Housing Act 
     (12 U.S.C. 1715z-20) is amended--
       (1) in subsection (b)(2), insert ```real estate,''' after 
     ```mortgagor','';
       (2) in subsection (g)--
       (A) by striking the first sentence; and
       (B) by striking ``established under section 203(b)(2)'' and 
     all that follows through ``located'' and inserting 
     ``limitation established under section 305(a)(2) of the 
     Federal Home Loan Mortgage Corporation Act for a 1-family 
     residence'';
       (3) in subsection (i)(1)(C), by striking ``limitations'' 
     and inserting ``limitation''; and
       (4) by adding at the end the following new subsection:
       ``(o) Authority To Insure Home Purchase Mortgage.--
       ``(1) In general.--Notwithstanding any other provision 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 
     dollar amount limitation determined under section 305(a)(2) 
     of the Federal Home Loan Mortgage Corporation Act for a 
     residence of the applicable size.''.
       (b) Mortgages for Cooperatives.--Subsection (b) of section 
     255 of the National Housing Act (12 U.S.C. 1715z-20(b)) is 
     amended--
       (1) in paragraph (4)--
       (A) by inserting ``a first or subordinate mortgage or 
     lien'' before ``on all stock'';
       (B) by inserting ``unit'' after ``dwelling''; and
       (C) by inserting ``a first mortgage or first lien'' before 
     ``on a leasehold''; and
       (2) in paragraph (5), by inserting ``a first or subordinate 
     lien on'' before ``all stock''.
       (c) Limitation on Origination Fees.--Section 255 of the 
     National Housing Act (12 U.S.C. 1715z-20), as amended by the 
     preceding provisions of this section, is further amended--
       (1) by redesignating subsections (k), (l), and (m) as 
     subsections (l), (m), and (n), respectively; and
       (2) by inserting after subsection (j) the following new 
     subsection:
       ``(k) Limitation on Origination Fees.--The Secretary shall 
     establish limits on the origination fee that may be charged 
     to a mortgagor under a mortgage insured under this section, 
     which limitations shall--
       ``(1) equal to 1.5 percent of the maximum claim amount of 
     the mortgage, except that the Secretary may adjust the 
     limitation under this paragraph 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;

[[Page 24541]]

       ``(4) include any fees paid to correspondent mortgagees 
     approved by the Secretary or to mortgage brokers; and
       ``(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 19(a)(2) of the Expanding American Homeownership Act 
     of 2007.''.
       (d) 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.

     SEC. 21. PARTICIPATION OF MORTGAGE BROKERS AND CORRESPONDENT 
                   LENDERS.

       (a) In General.--
       (1) Definitions.--
       (A) In general.--Section 201 of the National Housing Act 
     (12 U.S.C. 1707), as amended by the preceding provisions of 
     this Act, is further amended--
       (i) by striking ``As used in section 203 of this title--'' 
     and inserting ``As used in this title and for purposes of 
     participation in insurance programs under this title, except 
     as specifically provided otherwise, the following definitions 
     shall apply:'';
       (ii) by striking subsection (b) and inserting the 
     following:
       ``(2) The term `mortgagee' means any of the following 
     entities, and its successors and assigns, to the extent such 
     entity is approved by the Secretary:
       ``(A) Qualification by audit and net worth.--A lender who--
       ``(i) closes a mortgage in its name and underwrites the 
     mortgage, services the mortgage, or both underwrites and 
     services the mortgage;
       ``(ii) submits to the Secretary such financial audits 
     performed in accordance with the standards for financial 
     audits of the Government Auditing Standards issued by the 
     Comptroller General of the United States;
       ``(iii) meet the minimum net worth requirement that the 
     Secretary shall establish;
       ``(iv) is licensed, under the laws of the State in which 
     the property that is subject to the mortgage is located, to 
     act as a lender in such State; and
       ``(v) complies with such other requirements as the 
     Secretary may establish.
       ``(B) Qualification of correspondent lenders by surety 
     bond.--Except as provided in subparagraph (D), a 
     correspondent lender who--
       ``(i) closes a mortgage in its name, but does not 
     underwrite and does not service the mortgage;
       ``(ii) is licensed, under the laws of the State in which 
     the property that is subject to the mortgage is located, to 
     act as a correspondent lender in such State;
       ``(iii) posts a surety bond, in lieu of any requirement to 
     provide audited financial statements or meet a minimum net 
     worth requirement, that--

       ``(I) is in a form satisfactory to the Secretary;
       ``(II) is in an aggregate amount, to be determined by the 
     Secretary based on the aggregate principal amount of single-
     family mortgages insured under this title that are placed in 
     a calendar year, which shall not be less than $50,000 or more 
     than $100,000, as such amount is adjusted annually by the 
     Secretary (as determined by the Secretary) by the change for 
     such year in the Consumer Price Index for All Urban Consumers 
     published monthly by the Bureau of Labor Statistics of the 
     Department of Labor;
       ``(III) guarantees payment of any liability of the 
     correspondent lender arising from its participation in the 
     program, up to the penal sum of the surety bond; without 
     regard to the number of years the bond remains in effect, the 
     number of claims or claimants, and the number of premiums 
     paid, in no event shall the aggregate liability of the surety 
     exceed the penal sum of the bond; and
       ``(IV) may be cancelled by the surety as to future 
     liability by giving 30 days notice in writing to the 
     Secretary, except that any such cancellation shall not alter 
     the liability of the surety for actions of the correspondent 
     lender prior to the effective date of teh cancellation; and

       ``(iv) complies with such other requirements as the 
     Secretary may establish, except that the Secretary shall not 
     require any minimum net worth or certified financial 
     statements.
       ``(C) Qualification of brokers by surety bond.--Except as 
     provided in subparagraph (D), a mortgage broker who--
       ``(i) closes the mortgage in the name of the lender, and 
     does not underwrite and does not service the mortgage;
       ``(ii) is licensed, under the laws of the State in which 
     the property that is subject to the mortgage is located, to 
     act as a mortgage broker in such State;
       ``(iii) posts a surety bond in accordance with the 
     requirements of subparagraph (B)(ii); and
       ``(iv) complies with such other requirements as the 
     Secretary may establish, except that the Secretary shall not 
     require any minimum net worth or certified financial 
     statement.
       ``(D) Conditions for continued applicability.--(i) 
     Subparagraphs (B) and (C) shall continue to apply after the 
     expiration of the 5-year period beginning on the date of the 
     enactment of the Expanding American Homeownership Act of 2007 
     only if, after the expiration of the 4-year period beginning 
     upon such date of enactment and taking into consideration the 
     report submitted in accordance with section 19(b) of such 
     Act, the Secretary--
       ``(I) makes a determination that such subparagraphs provide 
     protection to mortgage insurance funds for mortgages insured 
     under this title that are comparable to the protection 
     provided by the requirements for mortgagees under this title 
     as in effect immediately before the enactment of such Act; 
     and
       ``(II) publishes in the Federal Register a notice of such 
     determination and an order extending the applicability of 
     such subparagraphs.
       ``(ii) If, taking into consideration such report, the 
     Secretary makes a determination after the expiration of such 
     4-year period that subparagraphs (B) and (C) do not provide 
     protection as referred to in clause (i) of this subparagraph, 
     the Secretary may, by order published in the Federal 
     Register, provide for the participation, after the expiration 
     of the 5-year period referred to in clause (i), of 
     correspondent lenders and mortgage brokers as mortgagees in 
     the insurance programs under this title in accordance with 
     subparagraphs (B) and (C) as modified by the Secretary as the 
     Secretary considers appropriate to provide such protection.
       ``(E) Additional mortgage broker requirements.--
       ``(i) In addition to the requirements under subparagraphs 
     (A) and (C) and to duties imposed under other statutes or 
     common law, to be eligible as a mortgagee under this section, 
     a broker shall--

       ``(I) safeguard and account for any money handled for the 
     borrower;
       ``(II) follow reasonable and lawful instructions from the 
     borrower; and
       ``(III) act with reasonable skill, care, and diligence.

       ``(ii) For purposes of this subparagraph, a loan 
     correspondent shall be considered to be a mortgage broker.
       ``(iii) The duties and standards of care created in this 
     subparagraph shall not be waived or modified.
       ``(iv) Any broker found by the Secretary to have violated 
     the requirements of this subparagraph may not originate 
     mortgage loans insured under this title.
       ``(3) The term `mortgagor' includes the original borrower 
     under a mortgage and the successors and assigns of the 
     original borrower.''; and
       (iii) by redesignating subsections (a), (c), (d), (e), (f), 
     (g), and (h) as paragraphs (1), (4), (5), (6), (7), (8), and 
     (9), respectively, and indenting such paragraphs two ems so 
     as to align the left margins of such paragraphs with the left 
     margins of paragraphs (2) and (3) (as added by clause (ii) of 
     this subparagraph).
       (B) Mortgagee review.--Section 202(c)(7) of the National 
     Housing Act (12 U.S.C. 1708(c)(7)) is amended--
       (i) in subparagraph (A), by inserting ``, as defined in 
     section 201,'' after ``mortgagee'';
       (ii) by striking subparagraph (B); and
       (iii) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (B) and (C), respectively.
       (C) Multifamily rental housing insurance.--Section 
     207(a)(2) of the National Housing Act (12 U.S.C. 1713(a)(2)) 
     is amended by striking ``means the original lender under a 
     mortgage, and its successors and assigns, and'' and inserting 
     ``has the meaning given such term in section 201, except that 
     such term also''.
       (D) War housing insurance.--Section 601(b) of the National 
     Housing Act (12 U.S.C. 1736(b)) is amended by striking 
     ``includes the original lender under a mortgage, and his 
     successors and assigns approved by the Secretary'' and 
     inserting ``has the meaning given such term in section 201''.
       (E) Armed services housing mortgage insurance.--Section 
     801(b) of the National Housing Act (12 U.S.C. 1748(b)) is 
     amended by striking ``includes the original lender under a 
     mortgage, and his successors and assigns approved by the 
     Secretary'' and inserting ``has the meaning given such term 
     in section 201''.
       (F) Group practice facilities mortgage insurance.--Section 
     1106(8) of the National Housing Act (12 U.S.C. 1749aaa-5(8)) 
     is amended by striking ``means the original lender under a 
     mortgage, and his or its successors and assigns, and'' and 
     inserting ``has the meaning given such term in section 201, 
     except that such term also''.
       (2) Eligibility for insurance.--
       (A) Title i.--Paragraph (1) of section 8(b) of the National 
     Housing Act (12 U.S.C. 1706c(b)(1)) is amended--
       (i) by striking ``, and be held by,''; and
       (ii) by striking ``as responsible and able to service the 
     mortgage properly''.
       (B) Single family housing mortgage insurance.--Paragraph 
     (1) of section 203(b) of the National Housing Act (12 U.S.C. 
     1709(b)(1)) is amended--
       (i) by striking ``, and be held by,''; and
       (ii) by striking ``as responsible and able to service the 
     mortgage properly''.
       (C) Section 221 mortgage insurance.--Paragraph (1) of 
     section 221(d) of the National Housing Act (12 U.S.C. 
     1715l(d)(1)) is amended--
       (i) by striking ``and be held by''; and
       (ii) by striking ``as responsible and able to service the 
     mortgage properly''.
       (D) Home equity conversion mortgage insurance.--Paragraph 
     (1) of section 255(d) of the National Housing Act (12 U.S.C. 
     1715z-20(d)(1))

[[Page 24542]]

     is amended by striking ``as responsible and able to service 
     the mortgage properly''.
       (E) War housing mortgage insurance.--Paragraph (1) of 
     section 603(b) of the National Housing Act (12 U.S.C. 
     1738(b)(1)) is amended--
       (i) by striking ``, and be held by,''; and
       (ii) by striking ``as responsible and able to service the 
     mortgage properly''.
       (F) War housing mortgage insurance for large-scale housing 
     projects.--Paragraph (1) of section 611(b) of the National 
     Housing Act (12 U.S.C. 1746(b)(1)) is amended--
       (i) by striking ``and be held by''; and
       (ii) by striking ``as responsible and able to service the 
     mortgage properly''.
       (G) Group practice facility mortgage insurance.--Section 
     1101(b)(2) of the National Housing Act (12 U.S.C. 
     1749aaa(b)(2)) is amended--
       (i) by striking ``and held by''; and
       (ii) by striking ``as responsible and able to service the 
     mortgage properly''.
       (H) National defense housing insurance.--Paragraph (1) of 
     section 903(b) of the National Housing Act (12 U.S.C. 
     1750b(b)(1)) is amended--
       (i) by striking ``, and be held by,''; and
       (ii) by striking ``as responsible and able to service the 
     mortgage properly''.
       (I) Contingent repeal.--Unless there is published in the 
     Federal Register, before the expiration of the 5-year period 
     beginning on the date of the enactment of this Act, an order 
     under clause (i) or (ii) of section 201(2)(D) of the National 
     Housing Act (12 U.S.C. 1707(2)(D)), as added by paragraph 
     (1)(A)(2) of this subsection, upon the expiration of such 
     period the provisions of such Act amended by this paragraph 
     are amended to read as such provisions would be in effect 
     upon such expiration if this Act had not been enacted (taking 
     into consideration any amendments, after such date of 
     enactment, to such provisions other than under this Act).
       (b) GAO Study and Report.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct a study, upon the expiration of the 42-month 
     period beginning on the date of the enactment of this Act, 
     regarding the effect of the amendments made by subsection 
     (a), which shall analyze and determine--
       (A) the extent to which such amendments have resulted in 
     increased participation, by mortgage brokers and 
     correspondent lenders, in the mortgage insurance programs 
     under the National Housing Act, as measured by the number and 
     amounts of such insured mortgages, disaggregated by the 
     States in which the properties subject to such mortgages are 
     located;
       (B) with respect to mortgages insured under such Act, a 
     comparison in the numbers and rate of defaults, foreclosures, 
     and mortgage insurance claims on such mortgages originated by 
     mortgage brokers and correspondent lenders authorized to 
     participate in the programs under such Act pursuant to the 
     amendments made by subsection (a) to such numbers and rates 
     on such mortgages originated by lenders who would be 
     authorized to participate in such programs notwithstanding 
     such amendments;
       (C) any impact of such amendments on the costs to the 
     Secretary of Housing and Urban Development of administering 
     the mortgage insurance programs under such title; and
       (D) the extent and effectiveness of the supervision and 
     enforcement, by the Secretary, of the additional authority 
     provided under the amendments made by subsection (a).
       (2) Report.--Not later than the expiration of 4-year 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 paragraph (1).

     SEC. 22. 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. 23. 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. 24. 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) Social security card with photo identification card 
     or real id act identification.--
       ``(A) A social security card accompanied by a photo 
     identification card issued by the Federal Government or a 
     State Government; or
       ``(B) 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).
       ``(2) Passport.--A passport issued by the United States or 
     a foreign government.
       ``(3) 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) Effective Date.--The requirements of section 210 of the 
     National Housing Act (as added by subsection (a) of this 
     section) shall take effect six months after the date of the 
     enactment of this Act.

     SEC. 25. 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 Act, 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.

[[Page 24543]]

       ``(d) Sunset.--After the expiration of the 5-year period 
     beginning on the date of the enactment of the Expanding 
     American Homeownership Act of 2007, the Secretary may not 
     enter into any new commitment to insure any mortgage, or 
     newly insure any mortgage, pursuant to the automated process 
     established under this section.''.
       (b) GAO Report.--Not later than the expiration of the four-
     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). 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. 26. 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. 27. MULTIFAMILY HOUSING MORTGAGE LIMITS IN HIGH COST 
                   AREAS.

       The National Housing Act is amended--
       (1) in sections 207(c)(3), 213(b)(2)(B)(i), 
     221(d)(3)(ii)(II), 221(d)(4)(ii)(II), 231(c)(2)(B), and 
     234(e)(3)(B) (12 U.S.C. 1713(c)(3), 1715e(b)(2)(B)(i), 
     1715l(d)(3)(ii)(II), 1715l(d)(4)(ii)(II), 1715v(c)(2)(B), and 
     1715y(e)(3)(B))--
       (A) by striking ``140 percent'' each place such term 
     appears and inserting ``170 percent''; and
       (B) by striking ``170 percent in high cost areas'' each 
     place such term appears and inserting ``215 percent in high 
     cost areas''; and
       (2) in section 220(d)(3)(B)(iii)(III) (12 U.S.C. 
     1715k(d)(3)(B)(iii)(III)) by striking ``206A'' and all that 
     follows through ``project-by-project basis'' and inserting 
     the following: ``206A of this Act) by not to exceed 170 
     percent in any geographical area where the Secretary finds 
     that cost levels so require and by not to exceed 170 percent, 
     or 215 percent in high cost areas, where the Secretary 
     determines it necessary on a project-by-project basis''.

     SEC. 28. DISCOUNT SALES OF MULTIFAMILY PROPERTIES.

       There is authorized to be appropriated, for discount sales 
     of multifamily real properties under section 207(1) or 246 of 
     the National housing Act (12 U.S.C. 1713(1), 1715z-11), 
     section 203 of the Housing and Community Development 
     Amendments of 1978 (12 U.S.C. 1701z-11), or section 204 of 
     the Departments of Veterans Affairs and Housing and Urban 
     Development, and Independent Agencies Appropriations Act, 
     1997 (12 U.S.C. 1715z-11a), and for discount loan sales under 
     section 207(k) of the National Housing Act (12 U.S.C. 
     1713(k)), section 203 of the Housing and Community 
     Development Amendments of 1978 (12 U.S.C. 1701z-11(k)), or 
     section 204(a) of the Departments of Veterans Affairs and 
     Housing and Urban Development, and Independent Agencies 
     Appropriations Act, 1997 (12 U.S.C. 1715z-11a(a)), 
     $5,000,000, for fiscal year 2008.

     SEC. 29. 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. 30. 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. NONCOMPETITIVE SALES IN FISCAL YEAR 2011.

       ``Notwithstanding any other provision of law, the Secretary 
     may not sell any multifamily real property through any 
     discount sale during fiscal year 2011 under the provisions of 
     law referred to in section 2002(a) or any multifamily loan 
     through any discount loan sale during such fiscal year under 
     the provisions referred to in section 2002(b), unless the 
     property or loan is sold for an amount that is equal to or 
     greater than 60 percent of the property market value or loan 
     market value, respectively.''.

     SEC. 31. USE OF FHA SAVINGS FOR COSTS OF MORTGAGE INSURANCE, 
                   HOUSING COUNSELING, FHA TECHNOLOGIES, 
                   PROCEDURES, AND PROCESSES, AND FOR AFFORDABLE 
                   HOUSING GRANT FUND, AND STUDY.

       (a) In General.--Subject to subsection (c), there is 
     authorized to be appropriated for each fiscal year an amount 
     equal to the net increase for such fiscal year in, except as 
     provided in subsection (b), the negative credit subsidy for 
     the mortgage insurance programs under title II of the 
     National Housing Act resulting from this Act and the 
     amendments made by this Act, for the following purposes in 
     the following amounts:
       (1) Single family housing mortgage insurance.--For each 
     fiscal year, for costs (as such term is defined in section 
     502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) 
     of mortgage insurance provided pursuant to section 203(b) of 
     the National Housing Act (12 U.S.C. 1709(b)), the additional 
     amount (not including any costs of such mortgage insurance 
     resulting from this Act or the amendments made by this Act), 
     if any, necessary to ensure that the credit subsidy cost of 
     such mortgage insurance for such fiscal year is $0.
       (2) Housing counseling.--For each of fiscal years 2008 
     through 2012, the amount needed to increase funding, for the 
     housing counseling program under section 106 of the Housing 
     and Urban Development Act of 1968 (12 U.S.C. 1701x), in 
     connection with homebuyers and homeowners with mortgages 
     insured under title II of the National Housing Act, from the 
     amount appropriated for the preceding fiscal year to 
     $100,000,000.
       (3) Mortgage insurance technology, procedures, processes, 
     program performance, and salaries.--For each of fiscal years 
     2008 through 2012, $25,000,000 for increasing funding for the 
     purpose of improving technology, procedures, processes, and 
     program performance, and salaries in connection with the 
     mortgage insurance programs under title II of the National 
     Housing Act.
       (4) Affordable housing fund.--For each fiscal year, for an 
     affordable housing fund available for use only for grants to 
     provide affordable rental housing and affordable 
     homeownership opportunities for low-income families, the 
     amount remaining under this section after amounts are made 
     available for such fiscal year in accordance with paragraphs 
     (1), (2), and (3).
       (b) Exclusion of Earnings From the Single Family Mortgage 
     Insurance Program.--With respect to a fiscal year, the 
     negative credit subsidy determined under subsection (a) shall 
     not include the negative credit subsidy cost for such fiscal 
     year, if any, for mortgage insurance provided pursuant to 
     section 203(b) of the National Housing Act.
       (c) Certification.--Subsection (a) shall not be effective 
     for a fiscal year unless the Secretary of Housing and Urban 
     Development has, by rule making 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 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 comply with the requirements of section 205(f) 
     of such Act (relating to required capital ratio for the 
     Mutual Mortgage Insurance Fund) and ensure the safety and 
     soundness of the other mortgage insurance funds under such 
     Act, and any negative credit subsidy for such fiscal year 
     resulting from such mortgage insurance programs adequately 
     ensures the efficient delivery and availability of such 
     programs.
       (d) Study and Report.--The Secretary of Housing and Urban 
     Development shall conduct a study to obtain recommendations 
     from participants in the private residential mortgage lending 
     business and the secondary market for such mortgages on how 
     best to update and upgrade procedures, processes, and 
     technologies for the mortgage insurance programs under title 
     II of the National Housing Act so that the policies

[[Page 24544]]

     and procedures for originating, insuring, and servicing of 
     such mortgages conform with those customarily used by 
     secondary market purchasers of residential mortgage loans. 
     Not later than the expiration of the 12-month period 
     beginning on the date of the enactment of this Act, the 
     Secretary shall submit a report to the Congress describing 
     the progress made and to be made toward updating and 
     upgrading such procedures, processes, and technology, and 
     providing appropriate staffing for such mortgage insurance 
     programs.

     SEC. 32. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.

       Notwithstanding any other provision of law, including any 
     provision of this Act and any amendment made by this Act--
       (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. 33. CIVIL MONEY PENALITIES 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. 34. SAVINGS PROVISION.

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

     SEC. 35. IMPLEMENTATION.

       Except as provided in section 23(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 Act. The notice shall take 
     effect upon issuance.
  The CHAIRMAN. No further amendment to the bill, as amended, is in 
order except those printed in part B of the report. Each further 
amendment may be offered only in the order printed in the report, 
except for amendment No. 2, which may be offered out of sequence, by a 
Member designated in the report, shall be considered read, shall be 
debatable for the time specified in the report, equally divided and 
controlled by the proponent and an opponent, shall not be subject to 
amendment, and shall not be subject to a demand for division of the 
question.


                 Amendment No. 2 Offered by Mr. Cardoza

  The CHAIRMAN. It is now in order to consider amendment No. 2 printed 
in part B of House Report 110-330.
  Mr. CARDOZA. Madam Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 2 offered by Mr. Cardoza:
       Strike line 19 on page 4 and all that follows through page 
     5, line 22, and insert the following:

     SEC. 3. MAXIMUM PRINCIPAL LOAN OBLIGATION.

       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 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) 175 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 2008, 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 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''.

  The CHAIRMAN. Pursuant to House Resolution 650, the gentleman from 
California (Mr. Cardoza) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from California.
  Mr. CARDOZA. Madam Chairman, I yield myself 2\1/2\ minutes.
  I rise in support of this amendment, Madam Chairman. And I wish to 
begin by thanking Chairman Frank for bringing this much-needed 
legislation to the floor, and for all his efforts to help the reeling 
housing industry in my area, and the country in general.
  As we have heard from countless media reports, we are facing a 
growing mortgage crisis. Sadly, I represent an area that is 
particularly hard hit by this crisis. The community of Stockton has 
acquired the distinction of having the highest foreclosure rate of any 
U.S. city in the country, and there one in 20 households are in 
jeopardy of foreclosure at this time. In fact, Stockton has had 8,000 
foreclosures so far in 2007.
  This morning, the Modesto Bee reported that central California and 
central valley homeowners were six times more likely to be in mortgage 
default for last year than the national average. In addition, home 
values have plunged 15 to 20 percent so far this year.
  This amendment will address this problem and help ameliorate the 
harsh effects of the credit crunch. First, the amendment raises the FHA 
loan limit to the lower of, A, 125 percent of the local median home 
price or, B, 175 percent of the national GSE conforming loan limit.
  The biggest impact of this will be to make FHA loans available in 
low- and moderately income priced home markets. By raising the local 
loan limit up to 125 percent of the local median home price, FHA will 
be able to serve currently neglected populations and ensure loans in 
this vast and middle-market area. In addition, the amendment will have 
the effect of serving high-cost areas as well. By raising this 
artificial cap to 175 percent of the GSE conforming loan limit, the 
amendment will allow FHA to serve high-cost areas.
  California has some of the highest priced real estate anywhere in the 
country. This amendment, by expanding FHA's reach to high-priced areas, 
will finally bring the benefits of FHA to millions of deserving 
Californians.
  In addition, there are other areas of the country where this will 
have a monumental impact. Massachusetts, New York, Connecticut and 
other areas are all high-cost areas and will benefit tremendously from 
raising the loan limit. Raising loan limits and enhancing the ability 
of FHA to serve currently neglected populations will have the effect of 
generating more liquidity

[[Page 24545]]

 in the market and enhancing lender confidence. This will enable more 
borrowers who are facing loan resets to refinance their mortgages on 
more favorable terms.
  This amendment has strong support of the National Association of 
Realtors, the National Association of Home Builders, and others on the 
front lines of the housing industry. They know the needs of this 
industry, and they know that this bill will help.
  Mrs. BIGGERT. Madam Chairman, I rise in opposition to the amendment.
  The CHAIRMAN. The gentlewoman from Illinois is recognized for 5 
minutes.
  Mrs. BIGGERT. With that, I yield 4 minutes to the gentleman from 
California (Mr. Gary G. Miller).
  Mr. GARY G. MILLER of California. Madam Chairman, I'm rising asking 
for strong support of this amendment, so it's not really in opposition 
to the amendment.
  This bill, and this amendment, particularly, is to encourage the FHA 
program and products and make sure they're available across this 
country to help working families to achieve and maintain homeownership 
through the FHA program.
  The bill we are considering here today reforms the FHA single-family 
mortgage insurance program so that we can reach working families it was 
created to serve. I don't think there is any question that the FHA 
program, as currently structured, has not kept pace.
  Today, FHA is no longer a useful product to prospective home buyers. 
The problem is that statutory limitations preclude the FHA from 
adopting a rapidly changing marketplace that we experience today.
  As the private sector mortgage markets become more efficient, the FHA 
program's inflexible rules and requirements left it virtually 
irrelevant as a financing option. Under the current limitations, FHA 
products are not available for home buyers in high-cost areas of the 
country because the maximum loan limits are so much lower than the 
median home prices in that area.
  We did something very similar to this when we did the GSE in the 
high-cost areas. And the only people arguing against raising this 
conforming loan limit to high-cost areas were those whose home median 
prices fell far lower than the median amount they were able to loan on. 
If your median home area is 200,000 and it isn't 435, you don't care. 
But in California and other areas, it is quite the opposite.
  Now California's drop in FHA volumes have been nothing short of 
stunning. In 2000, FHA insured 109,074 mortgages in California, but 
last year it only insured 5,137. In my district, FHA insured 7,000 
mortgages in 2000 and only 80 mortgages in 2005. These figures 
represent a 99 percent drop in what FHA is able to loan in these high-
cost areas. That in and of itself states that there is a huge problem 
that this amendment is trying to cover and create the shortfall that 
currently exists in the program. Arguably, working families in high-
cost areas of the country are just the kind of underserved populations 
the FHA program was originally intended to serve.
  If we want to ensure that FHA is relevant for all those who need it, 
we must reform the program so it is available to low- and moderate-
income families across the country, even those in high-cost areas.
  On August 31, the President announced his goal to help an estimated 
240,000 families avoid foreclosures by enhancing the FHA program. Under 
the President's plan, FHA will allow families with strong credit 
histories who have been making timely mortgage payments before their 
loan reset, but are now in default, to qualify for refinancing. 
Unfortunately, without an increase in the loan limits, this program 
will not help families in high-cost areas.
  This amendment, supported by Mr. Frank, Mr. Cardoza and myself, would 
make sure that families can refinance in the FHA products by raising 
the FHA single-family loan limits in each local area to the lower of 
125 percent of the area median home price, or 175 percent of the 
national GSE conforming loan amendments.
  The amendment also gives HUD authority to raise these loan limit 
amounts by up to $100,000 ``if market conditions warrant.''
  The NAHB, National Association of Home Builders, has written a very 
strong letter in support of what we are trying to do. Many builders are 
selling homes today, and the problem they have is the person buying 
their home cannot find financing to sell their home. And this will help 
those people who are looking for financing and dealing with liquidity 
shortages in the marketplace.
  The National Association of Realtors has also written a very strong 
letter supporting what we're trying to do today. The problem they're 
facing today with people in the mortgage bracket that we're trying to 
deal with in this amendment, this will go a long way to providing 
liquidity and competition in the marketplace to ensure that American 
home buyers and families have the best and most opportunities that can 
be achieved through the marketplace through this amendment. So this is 
a very good amendment, and I would ask for an ``aye'' vote.
  Mr. CARDOZA. Madam Speaker, I want to thank my colleague, Mr. Miller, 
for his kind and accurate comments. And I would like to now yield 1 
minute to my colleague from California (Ms. Waters).
  Ms. WATERS. I appreciate Mr. Cardoza's amendment so much because it 
does have an important impact on high-cost markets like our home State 
of California. The FHA statute creates an artificial cap on the maximum 
home price, meaning that FHA does almost no loan business in certain 
high-cost markets. Now, this will put FHA back in the business of 
insuring loans in high-cost areas, not only in California, New York, 
Connecticut, Massachusetts, and other areas with a limited FHA 
presence. This amendment also puts FHA in a better position to help 
subprime borrowers and address temporary dislocations.
  Even before the recent mortgage crisis developed, there was a 
bipartisan consensus shared by the administration that reformed H.R. 
1852 would help get FHA back in the business of making loans at good 
terms and conditions to borrowers that turned to predatory loans in 
recent years. This amendment expands the extent to which this objective 
can be achieved. This is absolutely a great amendment, and I support 
it.

                              {time}  1300

  Mrs. BIGGERT. Madam Chairman, I recognize myself for 1 minute.
  I really believe in the concept of this. I think that there are a lot 
of high-cost areas that will really benefit from this. I hope that this 
will not hurt some of the low-cost areas; in other words, I think that 
the administration has said something about the fact that some of the 
areas across the country would be hurt and would lower, go below the 
$419,000 limit. So I hope that that will be addressed. I see Mr. Frank 
getting up. Maybe he would like to comment on that.
  Madam Chairman, I yield back the balance of my time.
  Mr. CARDOZA. I yield 1 minute to the chairman of the committee, Mr. 
Frank.
  Mr. FRANK of Massachusetts. Madam Chairman, I thank the gentleman, 
and I thank the gentlewoman from Illinois. She is absolutely right. If 
I thought this would in any way impinge on our ability to help middle- 
and lower-income people, I would be opposed to it. In fact, if this 
works as we believe it will work, it will be the opposite. Because CBO 
has consistently scored, we haven't had this particular amendment 
scored, but prior amendments that have raised the limit at which the 
FHA can operate have been scored by CBO as generating a surplus, a 
positive number. That is some of the money that we are going to use. As 
the gentlewoman knows, while there is some controversy about this 
thing, we significantly increase in this bill the amount for 
counseling, because if there had been proper counseling, a lot of 
people wouldn't have been stuck at pre-prime. The counseling is aimed 
at people in the lower brackets. This is part of the money for it.

[[Page 24546]]

  I would be willing, when we get to conference, to say, if, in any 
way, this would appear to be impinging on the ability to do the rest of 
the mission, we would cut it off. But the way it is going to work, it 
will, in fact, generate a surplus which we intend to use to help 
precisely the people whom the gentlewoman refers to.
  I thank the gentleman. I appreciate his advocacy of this. He has been 
one of those who, from California, has been most vigorous in reminding 
us of the need to do it.
  Mr. CARDOZA. Madam Chairman, in the short period of time we have 
remaining, I just want to thank the chairman of the Financial Services 
Committee for his leadership, my colleagues on the Republican side for 
their support, particularly Mr. Gary G. Miller. This is important 
legislation for our country when you live in an area where the housing 
prices have declined precipitously by 20 percent less in a year, where 
you see foreclosures rampant. In my district alone, there are probably 
over 20,000 such foreclosures. It is having real impacts on real 
families in my district and across America. We need to change these 
regulations and bring help to these citizens in need.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from California (Mr. Cardoza).
  The amendment was agreed to.


                 Amendment No. 1 Offered by Mr. Tierney

  The CHAIRMAN. It is now in order to consider amendment No. 1 printed 
in part B of House Report 110-330.
  Mr. TIERNEY. Madam Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Tierney:
       Page 66, after line 25, insert the following new section:

     SEC. 31. 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.

  The CHAIRMAN. Pursuant to House Resolution 650, the gentleman from 
Massachusetts (Mr. Tierney) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Massachusetts.
  Mr. TIERNEY. Madam Chairman, this amendment seeks to assist those 
individuals who are eligible borrowers that have been unfairly impacted 
by a statutory change to HUD's upfront mortgage insurance premium 
refund policy.
  Under the HUD program, borrowers pay an upfront mortgage insurance of 
1.5 percent of their FHA loan amount, and if they repay that loan, the 
borrowers may be due refunds of the prepaid insurance.
  However, back in 2005 when Congress passed a Consolidated 
Appropriations Act, it included language directing that, for mortgages 
endorsed for insurance on or after the date of enactment, which was 
December 8 of 2004, borrowers would not be eligible for refunds on 
their prepaid insurance.
  I have heard from constituents in my district, and I am sure there 
are constituents in other districts as well, who closed on their 
mortgage prior to December 8, 2004, but regrettably have been prevented 
from receiving their refund because HUD did not endorse their loan 
until after December 2004. These constituents reportedly were not 
adequately informed by their lender about the potential revisions to 
the refund policy because the lenders themselves were not informed by 
HUD of the change until January of 2005.
  I have heard from one family, for instance, who is seeking to buy a 
home in Gloucester, Massachusetts, and found themselves harmed by this 
provision. Although they seemed to do everything right in their own 
front, they were closing on their loan in November 2004, the family was 
prevented from receiving a refund that totaled almost as much as $5,000 
because HUD endorsed their mortgage on December 10, 2004, and their 
lender never informed them of that consequence because, as I mentioned, 
the lender didn't learn it until December 2005. It certainly seems that 
it was an unintended consequence of the provisions in the Consolidated 
Appropriations Act of 2005.
  Also worth noting is that in response to a letter that was sent by 
Chairman Frank and me to the HUD Secretary, Alphonso Jackson, it was 
indicated in his letter that he did not support the changes to the 
refund policy in their Consolidated Appropriations Act of 2005.
  This amendment makes a meaningful first step toward helping certain 
eligible borrowers, many of whom are low-income families who have 
played by the rules in pursuing their dreams of homeownership.
  Madam Chairman, I urge my colleagues to support this amendment.
  I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Massachusetts (Mr. Tierney).
  The amendment was agreed to.


        Amendment 3 Offered by Mr. Gary G. Miller of California

  The CHAIRMAN. It is now in order to consider amendment No. 3 printed 
in part B of House Report 110-330.
  Mr. GARY G. MILLER of California. Madam Chairman, I offer an 
amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 3 offered by Mr. Gary G. Miller of 
     California:
       Page 7, strike line 10 and insert the following:
       (2) in paragraph (9)--
       (A) by striking the paragraph
       Page 7, line 19, strike the last period and insert ``; 
     and''.
       Page 7, after line 19, insert the following:
       (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.''.

  The CHAIRMAN. Pursuant to House Resolution 650, the gentleman from 
California (Mr. Gary G. Miller) and a Member opposed each will control 
5 minutes.
  The Chair recognizes the gentleman from California.
  Mr. GARY G. MILLER of California. I rise to offer an amendment to 
H.R. 1852, the Expanding American Homeownership Act of 2007.
  My amendment would allow qualified down payment assistance providers 
to participate in the FHA program if certain conditions are satisfied 
to ensure that the down payment assistance program is legitimate and 
that the gift that is provided to the homeowner and the home buyer is 
truly a gift.
  One of the primary barriers for many Americans to achieving the dream 
of homeownership is the lack of accumulated wealth and disposable 
income required to come up with the down payment and closing costs 
needed to purchase a home. While they can afford monthly payments, some 
families have not been able to accumulate enough to cover down payment 
and closing costs.

[[Page 24547]]

  Fortunately, some charitable organizations have developed programs to 
help provide down payments to families that would qualify for the 
mortgage for the FHA program but for the lack of cash for a down 
payment. These down payment assistance programs have been successful in 
expanding homeownership opportunity for millions of families. The 
private sector has been working without government intervention to 
assist individuals and families who lack the necessary funds for down 
payments and other related costs become home buyers. In fact, Congress 
looked at the success of these programs when it created the American 
Dream Downpayment Act, a government program passed in 2003 to provide 
up to $10,000 in down payment and closing cost assistance to first-time 
home buyers.
  Similarly, H.R. 1852, the bill you are reviewing today, authorizes 
HUD to allow zero down payment FHA loans for home buyers who could not 
otherwise make the down payment required under the FHA rule.
  In the past, HUD has permitted the use of charitable down payment 
assistance programs in conjunction with FHA insured loans. Recently, 
however, HUD issued a proposed rule that would effectively eliminate 
many legitimate down payment assistance providers from assisting in FHA 
programs.
  We are hearing that just last week HUD sent a rule over to OMB for 
final approval. I am very concerned about the impact of this proposed 
rule on homeownership in our country.
  Rather than going too far by eliminating all down payment assistance 
providers, all that is really needed is a reasonable and fair criteria 
by which these programs can continue to operate while also protecting 
the FHA insurance fund. If there are legitimate problems that have been 
identified by HUD, then we should absolutely fix these problems. In 
fact, the full House has agreed that we should strengthen the rules for 
down payment assistance providers rather than eliminate them completely 
from the FHA program.
  In July, the House unanimously passed an amendment I offered with 
Housing and Community Opportunity Subcommittee Chairman Waters and 
Representative Al Green to the Transportation-HUD appropriations bill, 
which prohibited HUD from taking any action to issue its final rule or 
otherwise implement all or any part of the proposed rule.
  The amendment prevented HUD from finalizing or implementing the rule 
to end participation of down payment assistance providers in the FHA 
program. Our argument, then, was that HUD's proposal was too harsh a 
step and we would work to include language in the FHA bill to fix the 
problems that HUD has identified with some down payment assistance 
providers.
  This is what my amendment before you today seeks to do. The amendment 
I offer today is a followup on our work during the THUD bill to put the 
brakes on the HUD rule and instead address the problem HUD has 
identified with certain down payment assistance providers. This 
amendment would put the controls in place to weed out the bad actors 
while allowing those who help millions become homeowners continue to do 
the good work they are doing. Unlike the HUD rule, my amendment would 
preserve the down payment assistance programs' participation in FHA 
while ensuring they are legitimate and helpful to the home buyers.
  As you know, H.R. 1582 already includes language to end the practice 
of inflated appraisals, which was a key argument HUD used against the 
down payment assistance programs. My amendment builds on this provision 
and says that down payment assistance providers may participate in FHA 
so long as the down payment they are offering is truly a gift; in other 
words, that it reduces the amount owed on the home. My amendment also 
imposes a net worth requirement on such providers to alleviate the 
quality and quantity involved within the activity. This provision 
specifically responds to HUD's complaints regarding the plethora of 
small, fly-by-night operators that open up and that close down on a 
regular basis to avoid regulatory scrutiny. Many of these groups are 
starting business 1 day, getting involved in things they should not, 
and closing down immediately.
  These 3 improvements to the current situation, number 1, prohibiting 
inflated appraisals; 2, ensuring DPA providers offer an actual gift; 
and 3, imposing a net worth requirement, will weed out the bad actors 
while not prohibiting all down payment assistance providers from 
participating in FHA, as the HUD proposal would have done.
  With limited resources at the Federal level, Congress viewed the 
American Dream Downpayment Act as a complement, rather than a 
replacement, to the tremendous work down payment assistance providers 
were already doing to help build communities. There are simply not 
enough resources at the Federal level to do this alone.
  To address HUD's concerns, we should implement the same underwriting 
criteria that would be used on the new zero down payment program within 
FHA and what HUD already uses on the American Dream Downpayment Act.
  If we have come up with a reasonable system of underwriting to give 
Federal dollars to assist a family in buying a home, then we can 
certainly use the same criteria to allow the private sector to put 
forth people and moneys in these programs to allow people to own their 
homes.
  If FHA can offer a zero down payment loan under a given underwriting 
criteria, as proposed by this bill, then the private sector down 
payment assistance programs should also certainly be subject to this 
same criteria.
  To eliminate the possibility for a million families to own a home 
through down payment assistance providers but allow them to use the 
Federal Government for a down payment grant seems contradictory. If it 
works for the Federal program, then it should work for the private 
sector alternative, as well.
  My amendment addresses the problems with certain down payment 
assistance providers that HUD has identified. Rather than eliminating 
all providers, as the HUD rule attempts to do, it puts the protections 
in place to ensure the home buyers are getting a legitimate helping 
hand from these charitable entities.
  Madam Chairman, I ask for an ``aye'' vote on the amendment.
  I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Madam Chairman, I rise to seek the time 
to discuss this, with a certain ambiguity as to my position.
  The CHAIRMAN. Is the gentleman opposed to the amendment?
  Mr. FRANK of Massachusetts. To two aspects of it, yes, Madam Chair.
  The CHAIRMAN. The gentleman is recognized for 5 minutes.
  Mr. FRANK of Massachusetts. I yield to the gentlewoman from 
California such time as she may consume.

                              {time}  1315

  Ms. WATERS. Madam Chairman, I hope that our chairman didn't confuse 
you with that convoluted definition of what the time is that we are 
claiming.
  Madam Chairman, I am in strong support of this amendment. As a matter 
of fact, I would like to take this moment to commend and thank my 
colleague, Mr. Miller, for the work that he has done in helping other 
Members to understand what this is all about.
  I can recall when we had the hearing and everybody said, well, this 
is such a wonderful idea. As a matter of fact, all of us voted for the 
American Dream Down Payment Act on both sides of the aisle. We can't 
understand why there would be any questions or any problems about the 
way that there is assistance being given to would-be homeowners by 
organizations such as the ones who were presented to us on that day of 
the hearing. So because of his expertise and his understanding and his 
appreciation, he has helped us all to come together, and it has support 
on both sides of the aisle.
  As was mentioned, the amendment would allow qualified down payment 
assistance providers to participate in an FHA program if certain 
conditions are satisfied, that is, no obligation for the mortgagor to 
repay and net worth requirement.

[[Page 24548]]

  The Secretary shall consider as cash or its equivalent any amounts 
gifted by a family member, 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.
  I rise in support of this amendment. It is a major step in the 
direction of capturing the benefits of down payment assistance programs 
to over 1 million households since 1999, many of them FHA-insured 
borrowers, while safeguarding against bad actors in the field. The 
minimum capitalization requirement will protect borrowers from fly-by-
night operations, which the explicit prohibition against requiring 
repayment of such assistance by the borrower will ensure that the 
benefit is indeed a gift.
  Equally important, the additional measures to ensure the legitimacy 
of appraisals in FHA-insured transactions contained in H.R. 1852 and 
the manager's amendment to the bill will help safeguard the entire 
progress. Inflated appraisals undercut the legitimacy of seller-
financed down payment assistance.
  Down payment assistance that is repaid from a seller's proceeds that 
derive from a borrower's ability to get a loan based on an inflated 
appraisal is no gift at all to the borrower. H.R. 1852 cracks down on 
such schemes, while preserving the field for legitimate down payment 
programs. Accordingly, I urge my colleagues to support this amendment.
  Mr. GARY G. MILLER of California. Madam Chairman, I want to thank 
Maxine Waters for her kind comments. I remember when we were debating 
the American Dream Down Payment Assistance Act, and we used the private 
sector down payment assistance program as the tool and the argument to 
expand upon and have government also get involved. These private sector 
groups have put over 1 million people in homes that could not otherwise 
be in homes.
  This continues a program that has worked very well and eliminates the 
bad actors that HUD is talking about. I think if this is implemented, 
this bill will be a very strong bill, and I ask for an ``aye'' vote.
  Madam Chairman, I yield back the balance of my time.
  Mr. FRANK of Massachusetts. Madam Chairman, I claimed the time in 
opposition, but having listened to my two very persuasive colleagues, I 
have been converted and I now support this amendment.
  Madam Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from California (Mr. Gary G. Miller).
  The amendment was agreed to.


           Amendment No. 4 Offered by Mr. Bishop of New York

  The CHAIRMAN. It is now in order to consider amendment No. 4 printed 
in part B of House Report 110-330.
  Mr. BISHOP of New York. Madam Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 4 offered by Mr. Bishop of New York:
       Page 35, after line 24, insert the following:
       (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.''.
       Page 35, line 25, strike ``(2)'' and insert ``(3)''.
       Page 36, line 7, strike ``(3)'' and insert ``(4)''.
       Page 36, line 9, strike ``(4)'' and insert ``(5)''.

  The CHAIRMAN. Pursuant to House Resolution 650, the gentleman from 
New York (Mr. Bishop) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from New York.
  Mr. BISHOP of New York. Madam Chairman, let me start by thanking both 
Chairman Frank and Chairwoman Waters and their staffs for working with 
us on this amendment.
  Very simply, my amendment would make it easier for those who owned 
fixed-foundation homes on leased land to receive a reverse mortgage. 
Current law allows seniors who own fixed-foundation homes on leased 
land to receive a reverse mortgage only if the lease is for a term of 
not less than 99 years or if the lease is for a period of not less than 
10 years beyond the maturity of the mortgage. While this language 
covers some seniors, many elderly Americans who own a permanent-
foundation home in a senior community where the land is leased are not 
covered by either of these two categories of leases.
  My amendment would remove the provision in the bill that allows for a 
reverse mortgage if the lease term is for 10 years beyond the maturity 
of the mortgage and replace it with language that both clarifies and 
expands eligibility. Specifically, my amendment would broaden 
eligibility to seniors who have a lease term that ends no earlier than 
a minimum number of years beyond their actuarial life expectancy.
  This amendment is a commonsense solution to a problem that affects 
many seniors, both in my district and across the country; and I urge 
its adoption.
  Madam Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Madam Chairman, I claim the time in 
opposition.
  The CHAIRMAN. The gentleman is recognized for 5 minutes.
  Mr. FRANK of Massachusetts. Madam Chairman, I did want to ask a 
question of the gentleman from New York. I have a concern about his 
amendment, only because it does not seem to me to go far enough.
  One of the things we have tried very hard to do in our committee is 
to end what has been a kind of discrimination against manufactured 
housing, because if we are going to get to more people being able to 
own homes without getting into a subprime type of situation where 
people are induced to borrow more than they should, manufactured 
housing should be part of it.
  The gentleman's amendment is properly, from his standpoint, addressed 
to a situation in his own district where fixed-foundation housing is 
involved. But my question here would be, and I realize it is under the 
rule not possible to change the amendment now, but I would have this 
question: If his amendment would be adopted, if as the process went 
forward some of us were able to work to expand this so it wasn't 
limited to fixed foundation, would the gentleman from New York have any 
objection to that?
  And I will yield to him.
  Mr. BISHOP of New York. I would have no objection. In fact, I would 
welcome it.
  Mr. FRANK of Massachusetts. Madam Chairman, in the face of that 
degree of reasonableness, I withdraw my opposition.
  I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from New York (Mr. Bishop).
  The amendment was agreed to.


               Amendment No. 5 Offered by Mr. Hensarling

  The CHAIRMAN. It is now in order to consider amendment No. 5 printed 
in part B of House Report 110-330.
  Mr. HENSARLING. Madam Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 5 offered by Mr. Hensarling:
       Page 64, strike lines 6 through 13.

  The CHAIRMAN. Pursuant to House Resolution 650, the gentleman from 
Texas (Mr. Hensarling) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. HENSARLING. Madam Chairman, I yield myself such time as I may 
consume.
  Madam Chairman, recently the Democrat majority in this institution 
sought to create yet another new government housing program, the 
Affordable Housing Fund. This is on top of the roughly 80 other 
programs that HUD administers for Housing and Urban Development. So, 
Madam Chairman, we are being asked today in the

[[Page 24549]]

underlying bill to fund a new program, without terminating any of the 
other 80-some-odd programs that are presently on the books; although 
many have already achieved their mission, many are ineffective, many 
are duplicative and many are quite costly.
  Madam Chairman, the so-called Affordable Housing Fund, as designed, 
will grant moneys to States for a variety of purposes. I know that the 
purposes are noble, but many of us believe that, unfortunately, this 
could become a de facto housing slush fund.
  I furthermore note, as moneys are handed to the States, almost every 
State in our Union is presently running a surplus, yet we regrettably 
know the Federal Government continues to run a deficit. So how much 
sense does this make?
  For those who tell us that the Federal housing function is 
underfunded, I might note that according to OMB, in a little over 10 
years we have gone from $15.4 billion to $30 billion, roughly double. 
That rate is higher than the increase in veterans spending, education 
spending, energy spending, transportation spending, international 
affairs, and even Social Security over the same period.
  Although the House has passed this ill-conceived program, there has 
been no Senate action. The President has signed no bill. So we are 
being asked, Madam Chairman, to fund a program that doesn't even exist, 
when hardworking Americans can't even fund the roughly 10,000 Federal 
programs that are already on the books.
  My amendment is a simple one. It would remove this funding mechanism 
in this bill for the so-called Affordable Housing Fund. The funding 
mechanism shouldn't be in this bill. It has nothing to do with 
fundamentally reforming FHA. And the bill siphons money from the FHA 
through what I believe and many of us believe to be a back-door tax on 
the FHA premiums paid by 4.8 million families that are using FHA 
insurance. It does this by diverting part of the increase from a 
negative credit subsidy.
  To try to speak English here, it appears that people are overpaying 
their premiums. If so, maybe that money ought to go back to the people 
who paid the premiums in the first place.
  I know the creation of the fund has been a long-time goal for 
Chairman Frank. I appreciate his sincerity, and I appreciate the 
nobility of his purpose and his ideological consistency. But the fact 
remains that this is a back-door tax on low- and moderate-income 
Americans who use FHA.
  This funding provision is unnecessary, it is unwise, it is unsound. 
The money ought to go back to the people who paid it. And if that is 
not the will of the House, it should at least, at least, be used for 
those who paid the premiums in the first place.
  Madam Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Madam Chairman, I rise to sincerely seek 
time in opposition.
  The CHAIRMAN. The gentleman is recognized for 5 minutes.
  Mr. FRANK of Massachusetts. Thank you, Madam Chairman.
  We have been debating this. It is a legitimate issue. We debated it 
when the gentleman from Georgia offered a version of it in the 
appropriations bill. We debated it previously. We debated a similar 
argument when we had the GSE bill.
  The gentleman says there are 80 HUD programs and HUD money has gone 
up. The major reason the HUD funding has gone up, the single biggest 
one, has been in the section 8 rental program. There is a problem with 
section 8. Section 8 adds equity. But the current section 8 program 
provides rental assistance for 1 year at a time. No one can build 
affordable housing based on an annual grant. So what section 8 does, 
while it does provide some equity and I have been supportive of it, it 
increases the demand for housing without increasing the supply.
  So in the current formation of Federal policies, the Federal 
Government puts upward pressure on rentals in the moderate- and low-
income areas, because we give people billions of dollars to rent 
apartments in a way that does not lead to any construction.
  This tries to make it a more balanced program. This and the GSE bill 
take money to begin the process of constructing affordable housing, 
which in the end could save us money, because it will then say that the 
rental levels which section 8 is driving up will no longer be driven 
up.
  The gentleman says it is going to be a tax on the FHA. In fact, I 
hope the gentleman, given his concern about a tax on the people who get 
mortgage insurance from the FHA, will vote against the amendment to be 
offered by the gentlewoman from Illinois, because in this bill, unlike 
the gentlewoman's amendment, we have very tough restrictions on HUD's 
ability to raise the FHA fund unless it is necessary for solvency.
  In a bipartisan basis last year, we wrote to them and we did it in 
the appropriations bill, because HUD was being told by OMB, not HUD, 
HUD made it very clear, this was an OMB directive, raise the FHA fees 
because FHA isn't contributing enough to the budget.
  We put into our bill's restrictions, we have a restriction in our 
bill on the amount that can be charged for home equity mortgages by the 
originators. It is not in the gentlewoman from Illinois's amendment. We 
put caps on the FHA. So exactly the opposite is the case. And as far as 
this is concerned, the bill specifically says that no money can go to 
the Housing Trust Fund until the HUD Secretary has certified that the 
fund will be totally solvent and this will not endanger it.
  The money that would go to affordable housing does not come from 
raising anybody's fee. It comes from an increase in volume. We capped 
the fees. I want to emphasize this. In the bill that we have, as 
opposed to the gentlewoman from Illinois's substitute, there are two 
separate restrictions on FHA's ability to raise fees that she doesn't 
have.
  What we do is the law now says FHA can only do 65,000 home equity 
reverse mortgages a year. We say, no, there is no reason for that 
limit. We say do as many as the market will bear, with a restriction on 
what can be charged.
  That is what generates the money. It is an increase in volume at a 
lower price to the consumer that generates the money; and if that 
increased volume and the lower price to the consumer results in there 
being a surplus that we can spend to build rental housing, as long as 
HUD certifies that that would not in any way require any increase in 
the FHA, we say, go ahead.

                              {time}  1330

  As to affordable housing, there is a severe crisis in rental housing 
in this country, and you had some of the people pushed into subprime 
situations because there wasn't enough rental housing. We think the 
Affordable Housing Trust Fund helps deal with that.
  Madam Chairman, I reserve the balance of my time.
  Mr. HENSARLING. Madam Chairman, I yield 1\1/2\ minutes to the 
gentleman from California (Mr. Royce).
  Mr. ROYCE. Madam Chairman, I rise in support of this amendment, and I 
rise in opposition to the financing of an affordable housing fund.
  I don't believe that this fund should be included in legislation to 
update and improve the Federal Housing Administration. I hope my 
colleagues will join me in opposing the underlying bill if this 
provision is included in the legislation.
  In 2005, I offered an amendment in the Committee on Financial 
Services to strike the creation of an affordable housing fund. Part of 
this is philosophical, but ideas have consequences and bad ideas have 
bad consequences in the long run. As I said 2 years ago, this fund is 
straight out of central planning 101. It should not be supported by 
this body.
  I think by now we should be able to agree that government housing 
grants do little to increase homeownership levels in this country. If 
these funds must be derived, they should be geared towards ensuring 
that the FHA remains solvent rather than supporting an experiment in 
socialism here.
  Furthermore, this fund could not be proposed at a worse time, as we 
see the

[[Page 24550]]

current spike in foreclosures in the subprime mortgage market, many of 
which are backed by the Federal Housing Administration. Homeownership 
rates improve when real interest rates are low and when consumer 
incomes are rising, are going up. I believe free market policies are 
the most effective way to generate those results, creeping towards 
socialism will not. This fund will waste resources and provide false 
hope for those who wish to increase homeownership.
  Mr. FRANK of Massachusetts. Madam Chairman, I yield myself 30 seconds 
to say that I appreciate the candor of the gentleman from California. 
He is against Federal programs that help build affordable housing; I 
understand that. By the way, this is not, of course, the old forms of 
public housing. This is going to be a private corporation.
  But I would say to my friends on the other side, I don't think that 
you can argue both that we already have enough programs to do this and 
that we shouldn't have any at all. In fact, we do not now have programs 
that help build family affordable housing. We think in cooperation with 
the private sector, and the gentleman mentions the market, every 
private market entity, the Realtors, the home builders who are involved 
in construction in the private market, support the creation of the 
housing fund.
  Mr. HENSARLING. Madam Chairman, either there is a surplus or there is 
not a surplus. It is really that simple. So now the question is if 
there is a surplus, what do you do with it. We believe that surplus 
ought to go back to the people who paid for it in the first place. And 
if it is not going to go back to them, it ought to serve them and it 
should ensure the solvency of this program, since we know Uncle Sam's 
track record on just about every other Federal insurance program is 
terrible. This should ensure the solvency of the program.
  We do not need a funding mechanism for another housing program that 
does not exist on top of the 90, many of which are not working.
  Madam Chairman, I yield back the balance of my time.
  Mr. FRANK of Massachusetts. Madam Chairman, I congratulate the 
gentleman's dexterity, on his ability to go 180 degrees opposite on his 
argument mid-amendment.
  He started out saying we can't do this because it will jeopardize the 
FHA. We point out that in the bill that couldn't happen. This bill says 
this money cannot be used if it would in any way jeopardize an FHA 
situation. So he says okay, let's take the surplus and put it into the 
regular budget. That is a debate. Do we take surplus and put it into 
the budget to detract from other spending? I don't think so. I guess 
the question is this. If you take out an FHA mortgage and get mortgage 
insurance, and if our bill doesn't pass, this administration will raise 
that fee to make more money, should that go to the war in Iraq and for 
contractors in Iraq who are wasting money? Or should it go to build 
affordable housing in our cities, because that is where the money is 
going. The money is not going to reduce the deficit; it is going to be 
wasted elsewhere.
  What we say is this. We should be building affordable housing. Some 
Members say don't give money to the States. No, I think that is a very 
good way to go. I think the States and the localities are best able to 
respond, and I hope the amendment is defeated.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Texas (Mr. Hensarling).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Mr. HENSARLING. Madam Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to clause 6 of rule XVIII, further proceedings 
on the amendment offered by the gentleman from Texas will be postponed.


                 Amendment No. 6 Offered by Mr. Tiberi

  The CHAIRMAN. It is now in order to consider amendment No. 6 printed 
in part B of House Report 110-330.
  Mr. TIBERI. Madam Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 6 offered by Mr. Tiberi:
       Page 17, strike lines 3 through 16 and insert the 
     following:

       ``(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.''.

       Page 18, strike lines 20 through 22 and insert the 
     following:
       ``(i) Requirement.--The Secretary shall require that the 
     mortgagor shall''.
       Page 19, strike lines 4 through 5 and insert the following:

       ``(I) prior to closing for the loan involved in the 
     mortgage;''.

  The CHAIRMAN. Pursuant to House Resolution 650, the gentleman from 
Ohio (Mr. Tiberi) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Ohio.
  Mr. TIBERI. Madam Chairman, I yield myself such time as I may 
consume.
  I would like to thank Chairman Frank and Chairman Waters for their 
leadership on these issues. For the, last 6 years I had an opportunity 
to work with both in the Committee on Financial Services and Housing 
Subcommittee on very important issues. Unfortunately, I am no longer on 
the committee but the issues are still very important to me.
  This amendment today is about empowering home buyers. It would 
require the Secretary of Housing and Urban Development to ensure high-
risk borrowers and borrowers who are applying for zero down-payment 
loans to receive housing counsel. Under the current bill, the language 
allows the Secretary to provide counseling; this requires it.
  Madam Chairman, as a former Realtor, I have seen firsthand the 
benefits, the joys, the importance of homeownership in America. 
However, given the current environment in our country, we need to make 
sure that there are safeguards put in place to protect homeowners to 
ensure fiscal responsible homeownership and guard against further 
default, bankruptcy and loss of home.
  Buying a house today arguably is the most important and biggest 
investment in a person's life. Counseling, I have found, plays a very 
important role in empowering consumers, leveling the playing field, and 
making sure they have all of the right information to go into owning 
their own home.
  In the past year, Ohio, California, Florida, Michigan and Georgia 
have comprised over half of our Nation's foreclosed homes. Recently 
Ohio, under the leadership of Governor Strickland, established the Ohio 
Foreclosure Prevention Task Force, which is comprised of various 
advocates and people in the housing community throughout the State.
  In their report, they listed seven recommendations. One of those 
recommendations was to focus on expanding housing counseling services 
and making it available to everyone.
  This amendment today only deals with two classes of borrowers: high-
risk borrowers and those who are applying for zero-down loans under 
this legislation.
  I believe it is very, very important, critically important, Madam 
Chairman, to make sure these borrowers understand the importance of 
homeownership, the responsibilities of homeownership. Madam Chairman, 
it is important because if we are going to take a bite out of this 
problem, and a bite is all this does today with this amendment because 
it only deals with those two types of borrowers, we need to make sure 
that every single borrower who is applying for a home under these two 
circumstances get all of the education that they need and deserve.
  So I urge the adoption of this amendment. This is about empowering 
consumers, and I hope the House supports the amendment.
  Madam Chairman, I reserve the balance of my time.
  Mrs. BIGGERT. Madam Chairman, I claim the time in opposition.
  The CHAIRMAN. The gentlewoman from Illinois is recognized for 5 
minutes.
  Mrs. BIGGERT. Madam Chairman, I have some concerns about what we

[[Page 24551]]

would call unintended consequences. I am a big supporter of financial 
literacy, and I chair the caucus. It is so important home buyers know 
what they are getting into, and I think that counseling is very 
important. I think that if we have an educated home buyer, we might not 
see so many of these foreclosures or near foreclosures or bankruptcy 
with the counseling.
  My concern is the mandatory counseling for FHA, and only because of 
something that has happened in Illinois, that happened in Chicago when 
this mandatory counseling was put in for FHA mortgages.
  What happened was that the lenders withdrew from the area. It was put 
in first by a ZIP Code in the city of Chicago and then put in for all 
of Cook County. The lenders withdrew from the area so there were no 
mortgages or very few available for those in that area because they 
weren't able to get the counseling that was needed in time to get the 
mortgages.
  It takes time for counseling, and I know that you put in, and I think 
this would help, is that people could get counseling on the Internet. I 
think it is a very important thing. I just worry about when it is 
mandatory that we are going to have less availability of FHA 
involvement than when it is discretionary as in the bill.
  I think that it makes FHA less attractive. If you are a prospective 
home buyer and one lender, a non-FHA, offers to put you into a mortgage 
that day while the FHA loan requires you to go through a counseling 
course, which will you pick? People will leave FHA, and we don't want 
that to happen. I know it is important that we have counseling and get 
people into this type of loan. The whole thing is, FHA is much better 
than the more exotic subprime loans, and that is the whole focus of 
this bill. I would hope that we can promote FHA, and I hope as this 
amendment moves forward, we can take a look at.
  Mr. FRANK of Massachusetts. Will the gentlewoman yield?
  Mrs. BIGGERT. I yield to the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. I would say to my friend from Ohio, and 
we have worked together on a lot of things, I understand his purpose is 
a good one, but I share some of the concerns of the gentlewoman from 
Illinois.
  I hope the gentleman understands that if this becomes part of the 
bill, as I believe it will, we haven't had a chance to consult with the 
FHA. We would like their advice. We could wind up strengthening the 
urging but allow for some exceptions. I would hope as we went forward 
the gentleman could work with us on doing that.
  Mr. TIBERI. Would the gentlewoman yield?
  Mrs. BIGGERT. I yield to the gentleman from Ohio.
  Mr. TIBERI. Yes, I think we can take a look at the best of what is 
happening in Ohio right now. We are doing some pretty innovative 
things. I am sure in Massachusetts and Illinois there is some 
innovation going on as well.
  The intent at the end of the day is to help the borrower and level 
the playing field. And so yes, I would be happy to work with the 
committee.
  Mr. FRANK of Massachusetts. If the gentlewoman would continue to 
yield, there are some differences that we have of an ideological sort. 
There are a lot of general areas of agreement. Mr. Montgomery, the head 
of the FHA, has been, I think, a responsible and thoughtful 
administrator of the program. We have a common interest in this, and I 
would look forward to having him in on this conversation with us, and I 
think we can move in that direction with some of the flexibility that 
the gentlewoman asked for.
  Mrs. BIGGERT. Madam Chairman, with that, I withdraw my objection, and 
I yield back the balance of my time.
  Mr. TIBERI. Madam Chairman, I yield myself the balance of my time.
  I thank the chairman and the gentlewoman from Illinois. Just a point 
of clarification: Some of the things that are happening now in Ohio is 
you have online counseling that is taking place for people that don't 
have access maybe in person to a counselor. So there is room to grow 
here, Chairman Frank and Mrs. Biggert.
  I think we have an opportunity to empower consumers and look forward 
to working with both of you. I urge adoption of this amendment, and 
urge passage of the bill.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Ohio (Mr. Tiberi).
  The amendment was agreed to.


                Amendment No. 7 Offered by Mrs. Biggert

  The CHAIRMAN. It is now in order to consider amendment No. 7 printed 
in part B of House Report 110-330.
  Mrs. BIGGERT. Madam Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 7 offered by Mrs. Biggert:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

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

Sec. 1. Short title and table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Maximum principal loan obligation.
Sec. 4. Extension of mortgage term.
Sec. 5. Cash investment requirement.
Sec. 6. Temporary reinstatement of downpayment requirement in event of 
              increased defaults.
Sec. 7. Mortgage insurance premiums.
Sec. 8. Rehabilitation loans.
Sec. 9. Discretionary action.
Sec. 10. Insurance of condominiums.
Sec. 11. Mutual Mortgage Insurance Fund.
Sec. 12. Hawaiian home lands and Indian reservations.
Sec. 13. Conforming and technical amendments.
Sec. 14. Home equity conversion mortgages.
Sec. 15. Conforming loan limit in disaster areas.
Sec. 16. Participation of mortgage brokers and correspondent lenders.
Sec. 17. Sense of Congress regarding technology for financial systems.
Sec. 18. Savings provision.
Sec. 19. Implementation.

     SEC. 2. 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 Act 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. 3. MAXIMUM PRINCIPAL LOAN OBLIGATION.

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

[[Page 24552]]

     Corporation Act (12 U.S.C. 1454(a)(2)) for a 
     2-, 3-, or 4-family residence, respectively, bears to the 
     dollar amount limitation in effect under such section for a 
     1-family residence; or
       ``(ii) the dollar amount limitation determined under such 
     section 305(a)(2) for a residence of the applicable size;

     except that the dollar amount limitation in effect for any 
     area under this subparagraph may not be less than the greater 
     of (I) the dollar amount limitation in effect under this 
     section for the area on October 21, 1998, or (II) 65 percent 
     of the dollar limitation determined under such section 
     305(a)(2) for a residence of the applicable size; and
       ``(B) not to exceed 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.'';
       (2) 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
       (3) by striking the last undesignated paragraph (relating 
     to counseling with respect to the responsibilities and 
     financial management involved in homeownership).

     SEC. 4. 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. 5. CASH INVESTMENT REQUIREMENT.

       Paragraph (9) of section 203(b) of the National Housing Act 
     (12 U.S.C. 1709(b)(9)) is amended 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, an 
     amount, if any, as the Secretary may determine based on 
     factors determined by the Secretary and commensurate with the 
     likelihood of default. For''.

     SEC. 6. TEMPORARY REINSTATEMENT OF DOWNPAYMENT REQUIREMENT IN 
                   EVENT OF INCREASED DEFAULTS.

       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) Effect of increased defaults.--
       ``(A) Annual determination.--If, for any calendar year 
     described in subparagraph (B)(i), the Secretary determines, 
     pursuant such subparagraph, that--
       ``(i) the ratio of the number of mortgage insurance claims 
     made during such calendar year on mortgages insured under 
     this section to the total number of mortgages having such 
     insurance in force during such calendar year exceeds, by 25 
     percent or more, such ratio for the 12-month period ending on 
     the effective date of this Act, or
       ``(ii) the ratio of the aggregate remaining principal 
     obligation under mortgages insured under this section for 
     which an insurance claim is made during such calendar year to 
     the average, for such calendar year, of the aggregate 
     outstanding principal obligation under mortgages so insured 
     exceeds, by 25 percent or more, such ratio for the 12-month 
     period ending on such effective date,

     during the 90-day period beginning upon the submission of the 
     report for such calendar year under subparagraph (B)(ii) 
     containing such determination, the Secretary may insure a 
     mortgage under this section only pursuant to the requirement 
     under subparagraph (C), and the Secretary shall, not later 
     than 60 days after submission of the report containing such 
     determination, submit a report to the Congress under 
     subparagraph (D) regarding mortgage insurance claims during 
     such calendar year.
       ``(B) 5 years of annual determinations.--
       ``(i) In general.--The Secretary shall, for each of the 5 
     calendar years commencing after the date of the enactment of 
     this Act, compare the ratios referred to in subparagraph (A) 
     and make a determination under such subparagraph.
       ``(ii) Annual report on defaults.--Not later than 90 days 
     after the conclusion of each of the calendar years described 
     in clause (i), the Secretary shall submit a report to the 
     Congress containing the determination of the Secretary under 
     such clause with respect to such calendar year and setting 
     forth the ratios referred to in such clause for such calendar 
     year.
       ``(C) Reinstatement of downpayment requirement.--The 
     requirement under this subparagraph is that paragraph (9) of 
     this subsection shall apply as such paragraph was in effect 
     on the day before the effective date of the Expanding 
     American Homeownership Act of 2007.
       ``(D) Reports regarding increased default rate.--A report 
     under this subparagraph, as required under subparagraph (A), 
     shall contain--
       ``(i) an analysis of mortgage insurance claims, made during 
     the calendar year for which the report is submitted, on 
     mortgages insured under this section;
       ``(ii) an analysis of the reasons for the increase during 
     such calendar year in the applicable ratio or ratios under 
     subparagraph (A), including an analysis of the extent to 
     which such increase is attributable to the amendments made by 
     the Expanding American Homeownership Act of 2007;
       ``(iii) the effect of such increase on the Mutual Mortgage 
     Insurance Fund;
       ``(iv) recommendations regarding--

       ``(I) whether the Congress should, to respond to such 
     increase, take legislative action (aa) to apply paragraph (9) 
     of this subsection as such paragraph was in effect on the day 
     before the effective date of Expanding American Homeownership 
     Act of 2007, (bb) to apply paragraph (2)(A)(ii) by 
     substituting `87 percent of the dollar amount limitation' for 
     `the dollar amount limitation', or (cc) both; and
       ``(II) whether such provisions should be temporary or 
     permanent, and, if temporary, the period during which such 
     provisions should apply; and

       ``(v) recommendations regarding any other administrative, 
     regulatory, legislative, or other actions that should be 
     taken to respond to such increase.
       ``(E) Defaults in disaster areas not counted for 24 
     months.--In determining the number of mortgage insurance 
     claims made and the aggregate remaining principal obligation 
     under mortgages for which an insurance claim is made for 
     purposes of subparagraph (A) for any calendar year, the 
     Secretary shall not take into consideration any claim made 
     during such period on a mortgage on any property that is 
     located in an area for which a major disaster was declared 
     pursuant to the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act if such claim was made during the 
     24-month period beginning upon such declaration.''.

     SEC. 7. MORTGAGE INSURANCE PREMIUMS.

       Section 203(c) of the National Housing Act (12 U.S.C. 
     1709(c)) is amended--
       (1) in paragraph (2), in the matter preceding subparagraph 
     (A), by striking ``Notwithstanding'' and inserting ``Except 
     as provided in paragraph (3) and notwithstanding''; and
       (2) by adding at the end the following new paragraph:
       ``(3) Flexible Risk-Based Premiums.--
       ``(A) In general.--For any mortgage insured by the 
     Secretary under this title that is secured by a 1- to 4-
     family dwelling and for which the loan application is 
     received by the mortgagee on or after October 1, 2007, 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 to 
     the limitations in subparagraphs (B) and (C). The rate of 
     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 subparagraph but only to the extent that such change is 
     not applied to any mortgage already executed.
       ``(B) Maximum up-front premium amounts.--For any mortgage 
     insured under a premium structure established pursuant to 
     this paragraph, the amount of any single premium payment 
     authorized by subparagraph (A), if established and collected 
     prior to the insurance of the mortgage, may not exceed the 
     following amount:
       ``(i) Except as provided in clauses (ii) and (iii), 3.0 
     percent of the amount of the original insured principal 
     obligation of the mortgage.
       ``(ii) If the mortgagor has a credit score equivalent to a 
     FICO score of 560 or more and has 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), 2.25 percent of the original 
     insured principal obligation of the mortgage.
       ``(iii) If the annual premium payment is equal to the 
     maximum amount allowable under clause (i) of subparagraph 
     (C), 1.5 percent of the amount of the original insured 
     principal obligation of the mortgage.
       ``(C) Maximum annual premium amounts.--For any mortgage 
     insured under a premium structure established pursuant to 
     this paragraph, the amount of any annual premium payment 
     collected may not exceed the following amount:
       ``(i) Except as provided in clauses (ii) and (iii), 2.0 
     percent of the remaining insured principal obligation of the 
     mortgage.
       ``(ii) If the mortgagor is a mortgagor described in clause 
     (ii) of subparagraph (B), 0.55 percent of the remaining 
     insured principal obligation of the mortgage.
       ``(iii) If the single premium payment collected at the time 
     of insurance is equal to maximum amount allowable under 
     clause (i) of subparagraph (B), 1.0 percent of the remaining 
     insured principal obligation of the mortgage.
       ``(D) Payment incentive.--Notwithstanding subparagraph (C), 
     for any mortgage insured under a premium structure 
     established pursuant to this paragraph and for which the 
     annual premium payment exceeds the amount set forth in 
     subparagraph (C)(ii), if during the 5-year period beginning 
     upon the time of insurance all mortgage insurance premiums 
     for such mortgage have been paid

[[Page 24553]]

     on a timely basis, upon the expiration of such period the 
     Secretary shall reduce the amount of the annual premium 
     payments due thereafter under such mortgage to an amount 
     equal to the amount set forth in subparagraph (C)(ii).
       ``(E) 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.
       ``(F) Considerations for premium structure.--When 
     establishing a premium structure under subparagraph (A) or 
     when changing such a premium structure, the Secretary shall 
     consider the following:
       ``(i) The effect of the proposed premium structure on the 
     Secretary's ability to meet the operational goals of the 
     Mutual Mortgage Insurance Fund as provided in section 202(a).
       ``(ii) Underwriting variables.
       ``(iii) The extent to which new pricing under the proposed 
     premium structure has potential for acceptance in the private 
     market.
       ``(iv) The administrative capability of the Secretary to 
     administer the proposed premium structure.
       ``(v) The effect of the proposed premium structure on the 
     Secretary's ability to maintain the availability of mortgage 
     credit and provide stability to mortgage markets.''.

     SEC. 8. 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. 9. 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. 10. INSURANCE OF CONDOMINIUMS.

       (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) in clause (1), by striking ``or'' and inserting a 
     comma; and
       (2) 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, a one-family unit in a multifamily project, including a 
     project in which the dwelling units are attached, semi-
     detached, or detached, and an undivided interest in the 
     common areas and facilities which serve the project''.

     SEC. 11. 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 2007, 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
       ``(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. 12. 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 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. 13. 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)).

[[Page 24554]]

       (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. 14. 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 (g)--
       (A) by striking the first sentence; and
       (B) by striking ``established under section 203(b)(2)'' and 
     all that follows through ``located'' and inserting 
     ``limitation established under section 305(a)(2) of the 
     Federal Home Loan Mortgage Corporation Act for a 1-family 
     residence'';
       (2) in subsection (i)(1)(C), by striking ``limitations'' 
     and inserting ``limitation''; and
       (3) by adding at the end the following new subsection:
       ``(n) Authority To Insure Home Purchase Mortgage.--
       ``(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 
     dollar amount limitation determined under section 305(a)(2) 
     of the Federal Home Loan Mortgage Corporation Act for a 
     residence of the applicable size.''.
       (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) 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--
       (1) the effects of reducing the amounts of such premiums 
     from the amounts charged as of the date of the enactment of 
     this Act on--
       (A) costs to mortgagors; and
       (B) the financial soundness of the program; and
       (2) the feasibility and effectiveness of exempting, from 
     all the requirements under the program regarding payment of 
     mortgage insurance premiums (including both up-front or 
     annual mortgage insurance premiums under section 203(c)(2) of 
     such Act), any mortgage insured under the program under which 
     part or all of the amount of future payments made to the 
     homeowner are used for costs of a long-term care insurance 
     contract covering the mortgagor or members of the household 
     residing in the mortgaged property.

     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.

     SEC. 15. 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. 16. PARTICIPATION OF MORTGAGE BROKERS AND CORRESPONDENT 
                   LENDERS.

       (a) Definitions.--
       (1) In general.--Section 201 of the National Housing Act 
     (12 U.S.C. 1707) is amended--
       (A) by striking ``As used in section 203 of this title--'' 
     and inserting ``As used in this title and for purposes of 
     participation in insurance programs under this title, except 
     as specifically provided otherwise, the following definitions 
     shall apply:'';
       (B) by striking subsection (b) and inserting the following:
       ``(2) The term `mortgagee' means any of the following 
     entities, and its successors and assigns, to the extent such 
     entity is approved by the Secretary:
       ``(A) A lender or correspondent lender, who--
       ``(i) makes, underwrites, and services mortgages;
       ``(ii) submits to the Secretary such financial audits 
     performed in accordance with the standards for financial 
     audits of the Government Auditing Standards issued by the 
     Comptroller of the United States;
       ``(iii) meet the minimum net worth requirement that the 
     Secretary shall establish; and
       ``(iv) complies with such other requirements as the 
     Secretary may establish.
       ``(B) A correspondent lender who--
       ``(i) closes a mortgage in its name but does not underwrite 
     or service the mortgage;
       ``(ii) posts a surety bond, in lieu of any requirement to 
     provide audited financial statements or meet a minimum net 
     worth requirement, in--

       ``(I) a form satisfactory to the Secretary; and
       ``(II) an amount of $75,000, as such amount is adjusted 
     annually by the Secretary (as determined under regulations of 
     the Secretary) by the change for such year in the Consumer 
     Price Index for All Urban Consumers published monthly by the 
     Bureau of Labor Statistics of the Department of Labor; and

       ``(iii) complies with such other requirements as the 
     Secretary may establish.
       ``(C) A mortgage broker who--
       ``(i) closes the mortgage in the name of the lender and 
     does not make, underwrite, or service the mortgage;
       ``(ii) is licensed, under the laws of the State in which 
     the property that is subject to the mortgage is located, to 
     act as a mortgage broker in such State;
       ``(iii) posts a surety bond in accordance with the 
     requirements of subparagraph (B)(ii); and
       ``(iv) complies with such other requirements as the 
     Secretary may establish.
       ``(3) The term `mortgagor' includes the original borrower 
     under a mortgage and the successors and assigns of the 
     original borrower.'';
       (C) in subsection (a), by redesignating clauses (1) and (2) 
     as clauses (A) and (B) respectively; and
       (D) by redesignating subsections (a), (c), (d), (e), and 
     (f) as paragraphs (1), (4), (5), (6), and (7), respectively, 
     and realigning such paragraphs two ems from the left margin.
       (2) Mortgagee review.--Section 202(c)(7) of the National 
     Housing Act (12 U.S.C. 1708(c)(7)) is amended--
       (A) in subparagraph (A), by inserting ``, as defined in 
     section 201,'' after ``mortgagee'';
       (B) by striking subparagraph (B); and
       (C) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (B) and (C), respectively.
       (3) Multifamily rental housing insurance.--Section 
     207(a)(2) of the National Housing Act (12 U.S.C. 1713(a)(2)) 
     is amended by striking ``means the original lender under a 
     mortgage, and its successors and assigns, and'' and inserting 
     ``has the meaning given such term in section 201, except that 
     such term also''.
       (4) War housing insurance.--Section 601(b) of the National 
     Housing Act (12 U.S.C. 1736(b)) is amended by striking 
     ``includes the original lender under a mortgage, and his 
     successors and assigns approved by the Secretary'' and 
     inserting ``has the meaning given such term in section 201''.
       (5) Armed services housing mortgage insurance.--Section 
     801(b) of the National Housing Act (12 U.S.C. 1748(b)) is 
     amended by striking ``includes the original lender under a 
     mortgage, and his successors and assigns approved by the 
     Secretary'' and inserting ``has the meaning given such term 
     in section 201''.
       (6) Group practice facilities mortgage insurance.--Section 
     1106(8) of the National Housing Act (12 U.S.C. 1749aaa-5(8)) 
     is amended by striking ``means the original lender under a 
     mortgage, and his or its successors and assigns, and'' and 
     inserting ``has the meaning given such term in section 201, 
     except that such term also''.
       (b) Eligibility for Insurance.--
       (1) Title i.--Paragraph (1) of section 8(b) of the National 
     Housing Act (12 U.S.C. 1706c(b)(1)) is amended--
       (A) by striking ``, and be held by,''; and
       (B) by striking ``as responsible and able to service the 
     mortgage properly''.

[[Page 24555]]

       (2) Single family housing mortgage insurance.--Paragraph 
     (1) of section 203(b) of the National Housing Act (12 U.S.C. 
     1709(b)(1)) is amended--
       (A) by striking ``, and be held by,''; and
       (B) by striking ``as responsible and able to service the 
     mortgage properly''.
       (3) Section 221 mortgage insurance.--Paragraph (1) of 
     section 221(d) of the National Housing Act (12 U.S.C. 
     1715l(d)(1)) is amended--
       (A) by striking `` and be held by''; and
       (B) by striking ``as responsible and able to service the 
     mortgage properly''.
       (4) Home equity conversion mortgage insurance.--Paragraph 
     (1) of section 255(d) of the National Housing Act (12 U.S.C. 
     1715z-20(d)(1)) is amended by striking ``as responsible and 
     able to service the mortgage properly''.
       (5) War housing mortgage insurance.--Paragraph (1) of 
     section 603(b) of the National Housing Act (12 U.S.C. 
     1738(b)(1)) is amended--
       (A) by striking ``, and be held by,''; and
       (B) by striking ``as responsible and able to service the 
     mortgage properly''.
       (6) War housing mortgage insurance for large-scale housing 
     projects.--Paragraph (1) of section 611(b) of the National 
     Housing Act (12 U.S.C. 1746(b)(1)) is amended--
       (A) by striking `` and be held by''; and
       (B) by striking ``as responsible and able to service the 
     mortgage properly''.
       (7) Group practice facility mortgage insurance.--Section 
     1101(b)(2) of the National Housing Act (12 U.S.C. 
     1749aaa(b)(2)) is amended--
       (A) by striking `` and held by''; and
       (B) by striking ``as responsible and able to service the 
     mortgage properly''.
       (8) National defense housing insurance.--Paragraph (1) of 
     section 903(b) of the National Housing Act (12 U.S.C. 
     1750b(b)(1)) is amended--
       (A) by striking ``, and be held by,''; and
       (B) by striking ``as responsible and able to service the 
     mortgage properly''.

     SEC. 17. 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. 18. 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. 19. 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 
     Act. The notice shall take effect upon issuance.

  The CHAIRMAN. Pursuant to House Resolution 650, the gentlewoman from 
Illinois (Mrs. Biggert) and the gentleman from Massachusetts (Mr. 
Frank) each will control 10 minutes.
  The Chair recognizes the gentlewoman from Illinois.

                              {time}  1345

  Mrs. BIGGERT. Madam Chairman, I yield myself such time as I may 
consume.
  My amendment strikes the bill in its entirety and inserts language 
that is identical to last year's bipartisan FHA modernization bill, 
H.R. 5121. Last year the bill had 54 Republicans, 51 Democrats, and 
one1 Independent cosponsor. Last year the bill was the bipartisan 
compromise that was agreed to by Chairman Waters and Chairman Frank and 
then chairman Mike Oxley. Last year's bill passed the House by a vote 
of 415-7 on July 25, 2006.
  There are differences in the bills. This amendment, last year's 
bipartisan bill, I would like to highlight a couple of important 
differences. The Frank-Waters bill authorizes the FHA to implement 
risk-based pricing, but leaves in place the current, I think, outdated 
premium caps. My concern is that these limits on the premium caps will 
prevent FHA from serving riskier borrowers who could be prudently 
served by charging a slightly higher premium.
  With the flexibility to charge slightly higher premiums, FHA would be 
able to serve borrowers with lower FICO scores who are currently being 
served only by the subprime market at very high interest rates. Just 
like last year's bipartisan House-passed bill, my amendment modernizes 
and updates premium caps, enabling FHA to reach down and serve riskier 
borrowers, but in a prudent manner. I think this is where growth comes 
in, because there will be more loans that FHA will be able to make.
  Second, the Frank-Waters bill requires the refund of excess upfront 
premiums charged to higher-risk borrowers, those with FICO scores below 
560. I am concerned that this new provision may treat your higher 
initial premiums and unintentionally limit the number of borrowers that 
could be served by FHA.
  A refund provision also would be difficult to implement. Perhaps most 
importantly, refunds like this undercut the very concept of insurance. 
It is the logical equivalent of a healthy person requesting a 100 
percent refund of his or her health insurance premium, or a driver who 
doesn't get into an accident demanding all of his car insurance back.
  Just like last year's House-passed bill, my amendment includes 
another bipartisan agreement, the automatic reduction of annual 
premiums to no more than 55 base points for loans, and remains active 
after 5 years. Automatic premium reductions can be a good thing. They 
can reduce refinancing and perhaps some defaults and foreclosures as 
well.
  Finally, the most significant difference between the bill I have 
introduced and the Frank-Waters FHA reform proposal, which has been of 
great concern to me and many of my colleagues, is the inclusion of a 
provision that creates a funding placeholder that you have heard talked 
about so much today that siphons off the FHA funds to create a brand-
new government trust fund.
  The other provisions that I mentioned are ones that represent 
significant differences between our introduced bills. Using FHA program 
funds to create a housing trust fund, to me, is where we have the most 
difference, and I believe it is not an appropriate use of FHA funds. 
Taking funds out of FHA and using them for a purpose unrelated to its 
core mission would threaten the solvency of the FHA fund and its 
ability to pay out the insurance claims. We don't want to have to come 
back here and do a bailout because FHA funds were diverted for other 
projects.
  There is general agreement on the need for FHA modernization 
legislation. By modernizing FHA with my amendment, we can expand FHA 
and give a viable alternative to more low-

[[Page 24556]]

income borrowers who may otherwise lose their home or be forced into 
the higher-cost subprime loans, or even predatory products. It is true 
that FHA cannot help all homeowners that are in the red, but it may 
help a good portion of them.
  I would urge my colleagues to support my amendment, last year's 
bipartisan bill, the House-passed bill that many of my colleagues 
supported last year.
  Madam Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Madam Chairman, I yield myself 3 minutes.
  The gentlewoman, incredibly, says this will jeopardize the solvency 
of the fund if we put money into affordable housing. I thought reading 
was one of the basic things we did around here. In the bill it says 
nothing can go to the Affordable Housing Fund if it would jeopardize 
solvency. Simply denying plain facts is not an appropriate way to 
debate.
  In much of her argument she talks about another piece that represents 
the difference between us. We say that if you are someone with a weaker 
credible, a lower FICO score, the great god, FICO, that governs the 
lives of lower-income people, if you get your mortgage insured and you 
work hard and make all your payments, you should still be charged more 
than the gentlewoman from Illinois or I would be charged for a 
mortgage, because that is the insurance principle.
  It is an appropriate principle for a private insurance company. For 
the Federal Government to say to hardworking people who are making 
their payments that they will be held accountable for the fact that 
other people didn't make their payments, and I won't be and the 
gentlewoman from Illinois wouldn't be, that is not appropriate.
  So this principle of, yes, they say if you are healthy, you shouldn't 
get your money back, if you work hard and make your mortgage payments, 
why should you be charged more because somebody else like you 
defaulted? Let's all share that burden.
  The gentlewoman said, well, it will be hard to give lower-income 
people loans. Those are crocodile tears. You are going to help these 
lower-income people by making them pay more for their mortgage than we 
would pay.
  I would also note, and I wasn't in charge of the drafting, but we did 
adopt several amendments today. The gentlewoman's amendment would, of 
course, wipe all of them out because it would go back to last year's 
bill.
  I understand there is regret on the part of many of my colleagues at 
the results of last November's election, and it is appropriate to try 
to undue last year's election. The appropriate time to do that is in 
next November's election, not by bills that passed a year ago with a 
differently constructed House and say let's not make any changes.
  We made changes to accommodate refinancing for people caught in the 
subprime crisis. That is in this bill. It is not in the gentlewoman's 
substitute. Taking a year-old bill, with none of the improvements we 
have made, it goes beyond the philosophy.
  Now, I understand Members don't want to do an affordable housing 
fund. That was the gentleman from Texas's amendment. I oppose it. That 
one makes some sense in terms of ideological division. But to say let's 
ignore everything that has happened in the last year, amendments 
adopted here today, several amendments by Members of both parties, the 
gentleman from California (Mr. Gary G. Miller); the gentleman from Ohio 
(Mr. Tiberi); the gentleman from Massachusetts (Mr. Tierney); the 
gentleman from New York (Mr. Bishop). We adopted their amendments. The 
gentlewoman wants to wipe them out. That is not an appropriate way to 
legislate.
  I hope that the amendment is defeated, that we do not say in 
particular that if you are someone in a lower-income category and you 
make your mortgage payments, the Federal Government will charge you 
more.
  Madam Chairman, I reserve the balance of my time.
  Mrs. BIGGERT. Madam Chairman, we could have passed this bill 9 months 
ago, and then we would have added on to it. Unfortunately, this is my 
opportunity to do it, and this is the bill that I have had. I bring it 
up now.
  As I said before, there are good things that have come out in the 
discussion today; there are some good things that have been added onto 
the bill that you have brought forward. The reason for bringing this up 
is I have some real concerns about some of the things that are in 
there, and this is my opportunity.
  I don't think that we are penalizing low-income people that much. I 
know that in the discussion that we had in committee when this came up 
about no down payment, there are people that can't afford a mortgage 
with no down payment and can meet the monthly payments, but there was 
no risk with those people, no premium for FHA to ensure that kind of 
mortgage.
  That isn't fair for other people that based on their credit scores 
are having to pay a premium. I would just disagree. If you are able to 
always meet those, then the risk should be dependent on what you do, 
not what somebody else does either. I would agree with that.
  Madam Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. I think the gentlewoman confused a couple 
of issues. When I talk about not charging someone more because she has 
a lower credit score, and it is often a ``she'' that is in that 
category, it is not the no-down-payment category. What the bill does 
that the gentlewoman has is to say if you are someone with a lower 
credit score and get a loan with a down payment, you get charged more 
even if you make your payments.
  By the way, the bill that she would replace with last year's bill 
would also knock out several protections we have in this bill against 
FHA fees being raised. The FHA doesn't want to raise fees. OMB has 
ordered FHA to try to raise fees. Congress has had to intervene.
  There are in our version, unlike the version the gentlewoman is 
offering, protections against fee increases. We have an amendment that 
was advocated by the gentlewoman from Florida, Ms. Ginny Brown-Waite, 
and the gentleman from Georgia, Mr. Marshall, to limit the amount that 
can be charged to older people taking out reverse equity mortgages. 
That is in the bill that the gentlewoman wants to displace, and she 
would displace it with a bill that has no such protection for older 
people.
  Madam Chairman, I reserve the balance of my time.
  Mrs. BIGGERT. Madam Chairman, just because someone is low income does 
not mean that they have poor credit. I think that is not where they are 
going to have to pay higher premiums, necessarily. It is inevitable in 
an insurance fund that lower-risk borrowers will subsidize higher-risk 
borrowers. Refunds of the nature that is in your bill would undercut 
the concept of insurance, as I said before, being the equivalent of a 
healthy person requiring a percent refund of his or her insurance 
premium, or a driver that does not get into an accident requiring their 
insurance back.
  Madam Chairman, I reserve the balance of my time.
  The CHAIRMAN. The gentleman from Massachusetts has 6 minutes 
remaining. The gentlewoman from Illinois has 3 minutes remaining.
  Mr. FRANK of Massachusetts. Madam Chairman, I yield myself 3 minutes.
  The gentlewoman has quite honestly joined this one issue. She says it 
is the principle of insurance. If you are healthy, you should pay less 
for insurance than if you are sick. That is not the principle we follow 
in the Federal Government. That is the point the gentlewoman misses.
  Yes, if you go to a private company, they will do that. You don't pay 
more in a Medicare premium if you are sick than if you are healthy. 
That is apparently what the gentlewoman is advocating, that senior 
citizens who are sick should pay more premiums than senior citizens who 
are healthy.
  The question is whether a principle that is necessary in a private 
insurance

[[Page 24557]]

scheme is appropriate for the Federal Government. She says just because 
you are low income doesn't mean you have poor credit. True. Not in 
every case. She knows there is a correlation; that the weaker the 
credit, the likely the people are to have low income. She, again, is 
saying explicitly that she believes, and she doesn't deny it, that it 
is the principle of insurance.
  You are a working woman making in the forties, you get FHA insurance, 
you make all your payments, and you have got weaker credit than 
somebody who serves in Congress and makes $180,000 a year. You have to 
pay more, according to the gentlewoman, than I would pay, even if you 
made all your payments.
  What we are saying is at the outset it may be that you want to charge 
more. Yes, we will give FHA the ability to do that upfront. But you can 
earn your way out of that. If you have weaker credit, but you work 
hard, you are diligent and you make your payments, why should the 
Federal Government charge you more than someone far wealthier than you?
  The gentlewoman is wrong to think that is the precedent. In the 
health insurance field and the Federal Government field, if you are 
under Medicare, you don't pay more in Medicare premiums if you were 
sick than if you were healthy. This is what we are saying, that you 
should not charge people more.
  I would also point out, again, that she said we don't want to raise 
fees to people. Our bill limits what the FHA can be forced to charge by 
OMB. We have three separate provisions. I will point out again to the 
gentlewoman, we adopted a provision, there were negotiations between 
AARP and the originators of the home equity mortgages, the services, 
and we have in there a reduction, we put a cap on. We cut by one-third 
the maximum fee elderly people can be charged for an FHA-insured home 
mortgage.

                              {time}  1400

  We reduced the fee that elderly people can be charged by one-third. 
The gentlewoman's amendment, it is not her fault, she is not 
gratuitously trying to hurt older people; she just picked up this old 
amendment from a year ago, this old bill, and offered it without taking 
into account the progress we have made. That is not a good way to 
legislate.
  I reserve the balance of my time.
  Mrs. BIGGERT. Madam Chairman, looking at the two bills, let's look at 
flexibility risk-based premiums. H.R. 1752 permits upfront or annual 
premiums or both. Premium rates may vary over loan term if basis for 
change is determined at origination.
  Under your bill, the same: requires annual report on risk-based 
premiums and how they were determined, authorizes premiums based on 
product risk.
  The maximum upfront premium amounts, H.R. 1752: 3 percent, or 1.5 
percent if annual premium is at its maximum. Under your bill, 2.25 
percent for standard-risk and higher-risk mortgages, 3.0 for zero and 
lower down mortgages for first-time buyers. And then the maximum annual 
premium amounts in H.R. 1752, 2.0, or 1.0 if upfront premium is at its 
maximum. Under yours, 0.55 percent for standard and high-risk 
mortgages, 0.75 for zero down mortgages. And then the limit on premium 
charged for certain mortgages. If a borrower has 3 percent cash 
contribution and a score of 560 or more, the upfront premium is limited 
to 2.25 percent and the annual 0.55 percent. And then, under your bill 
it is included by creation of the standard-risk and higher-risk 
mortgage categories.
  I guess we disagree on this, but I think I want the same thing. I 
want FHA to be used. I want it to be used for low-income, first-time 
home buyers and those that are trying to refinance. This is critical 
right now, and I just think there is some differences in what we have.
  Madam Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Madam Chairman, let me ask the 
gentlewoman from Illinois: If someone has weaker credit and gets 
mortgage insurance but makes all the payments for 5 years, why does the 
gentlewoman think that she should be charged more? And how does it hurt 
the FHA's ability to go forward if, after someone has made the payments 
for 5 years, she gets refunded the extra? I would yield to the 
gentlewoman to answer that question, a fundamental difference on the 
bill.
  Mrs. BIGGERT. I think under the bill, H.R. 1752, their premiums are 
reduced; they are not refunded.
  Mr. FRANK of Massachusetts. No. Answer the question. They are not 
refunded under your bill. They are under, the gentlewoman would not 
refund them. How does it hurt the FHA in their ability to lend to 
people with weaker credit if they say to people with weaker credit, if 
you make your payments for 5 years, we will refund the extra we charged 
you?
  Mrs. BIGGERT. If the gentleman will yield.
  Mr. FRANK of Massachusetts. I yield.
  Mrs. BIGGERT. Because the FHA is self-funded. It is not funded by the 
government just putting money into it just so that they can do other 
mortgages. It is self-funded and it is an insurance program. Now, we 
haven't been able to use it because it has been so capped in the amount 
of what they can do.
  Mr. FRANK of Massachusetts. I take back my time because the 
gentlewoman is simply, I understand her answer. It is, if there is a 
higher loan loss rate from lending to lower-income people, people with 
weaker credit, they have to subsidize each other.
  We say, no; raise the jumbo limit, and let those people in California 
and Massachusetts and New York who are getting mortgages at $600,000 
and $500,000, let them subsidize it. Nobody is subsidizing. You 
shouldn't have to subsidize if you are making your own payments.

                             National Association of Realtors,

                               Washington, DC, September 14, 2007.
     House of Representatives,
     Washington, DC.
       Dear Representative: On behalf of the 1.3 million members 
     of the National Association of REALTORS, I urge you to 
     support H.R. 1852, the ``Expanding American Homeownership Act 
     of 2007'', when the bill is considered by the full House. 
     This is an important measure that will allow FHA to function 
     in the 21st century. Equally important and worthy of your 
     strongest support is an amendment to be offered by 
     Representatives Barney Frank (D-MA), Gary Miller (R-CA) and 
     Dennis Cardoza (D-CA) that is vital to improving the 
     stability of mortgage markets, a critical component of our 
     national economy.
       The Frank/Miller/Cardoza amendment would increase the 
     Federal Housing Administration (FHA) loan limits beyond the 
     language originally included in H.R. 1852. Such an increase 
     is now needed in light of the significant housing and 
     mortgage market turmoil that has severely limited the ability 
     of families to refinance a problematic existing loan or, 
     alternatively, purchase a home in a high cost market with a 
     safe and affordable mortgage.
       As you well know, many American homeowners now have 
     mortgages with payments that will soon increase dramatically, 
     putting them at risk of foreclosure. Raising the FHA loan 
     limits will provide many of these homeowners living in the 
     nation's high housing cost markets with a safe FHA loan 
     alternative. In addition, with the even more recent 
     tightening of the jumbo market, many homebuyers may not be 
     able to find a safe, affordable financing option without an 
     increase in the FHA loan limits.
       Although the underlying bill would increase the loan 
     limits, we strongly believe that the Frank/Miller/Cardoza 
     amendment is needed to affect real change. H.R. 1852 creates 
     a new loan ceiling of $417,000. Many markets are 
     significantly higher than this limit. Median home prices of 
     communities in New York, New Jersey, Connecticut, California, 
     Massachusetts, and Pennsylvania are already far above this 
     limit. The Frank/Miller/Cardoza amendment creates geographic 
     fairness by raising the loan limit to 125% of the area median 
     home price. Under the amendment working families in Newark, 
     NJ can buy a home for $512,000, and families in Los Angeles, 
     CA can buy homes for $650,000--both median price homes for 
     their area.
       FHA reform is needed now, more than ever. Please vote for 
     H.R. 1852 and the Frank/Miller/Cardoza amendment when these 
     measures come to the Floor.
           Thank you,
                                                     Pat V. Combs,
                                                        President.

[[Page 24558]]

     
                                  ____
                                              National Association


                                             of Home Builders,

                               Washington, DC, September 17, 2007.
     Hon. John Boehner,
     Minority Leader, House of Representatives, Washington, DC.
       Dear Leader Boehner: On behalf of the 235,000 members of 
     the National Association of Home Builders (NAHB), I am 
     writing to express the building industry's support for H.R. 
     1852, the Expanding American Homeownership Act of 2007. NAHB 
     urges you to support this bill, which modernizes the Federal 
     Housing Administration (FHA), when it comes to the House 
     floor next week. Because of the importance of this issue to 
     our industry, we are designating the vote on passage of H.R. 
     1852 as a KEY VOTE.
       NAHB also supports the Frank/Miller/Cardoza amendment that 
     will further enable home buyers the ability to purchase an 
     FHA-insured home in many high-cost areas. Currently, the FHA 
     loan limit is too low to enable many deserving home buyer to 
     purchase a home in high-cost areas.
       Since its creation in 1934, and for much of its existence, 
     the FHA has been viewed as a housing finance innovator by 
     insuring millions of mortgage loans, which have made it 
     possible for America's families to achieve homeownership. 
     FHA's single family mortgage insurance programs have served 
     home buyers in all parts of the country during all types of 
     economic conditions. Moreover, FHA has done this without any 
     cost to America's taxpayers.
       Unfortunately, over the past two decades, the popularity 
     and relevance of FHA's single family mortgage insurance 
     programs have waned as FHA's programs have failed to keep 
     pace with competing conventional mortgage loan programs. 
     Faced with a deepening constriction in the availability and 
     affordability of housing credit, Congress now has the 
     opportunity to modernize the FHA and enable it to play a key 
     role in stabilizing the mortgage markets, while offering 
     borrowers a safe and fair mortgage alternative. Recently, 
     President Bush outlined a plan to help American homeowners 
     weather the current difficulties in mortgage markets, which 
     included asking Congress to send him an FHA reform bill as 
     soon as possible.
       To address the problems in today's housing finance market, 
     I urge your support for H.R. 1852 on the House floor this 
     week. Again, NAHB will KEY VOTE the vote on passage of H.R. 
     1852. Thank you for considering the views of the home 
     building industry.
           Sincerely,
                                                Joseph M. Stanton,
                                                   Chief Lobbyist.

  I yield my remaining time to the gentlewoman from California, the 
chairman of the subcommittee.
  Ms. WATERS. Madam Chairman and Members, earlier today we talked about 
how we worked together so well in order to get the best possible 
legislation. And I am just a little bit sad that this substitute 
amendment would reform for the Federal Housing Administration's FHA 
single-family mortgage insurance activities and would allow FHA to base 
each borrower's mortgage insurance premiums on the risk that the 
borrower poses to the FHA mortgage insurance fund with slight 
variations.
  Under this proposal, mortgage insurance premiums will be based on the 
borrower's credit history, loan-to-value ratio, debt-to-income ratio, 
and on FHA's historical experience with similar borrowers.
  This amendment maintains FHA reserves within the insurance fund to 
preserve the future solvency of the FHA program. I just rise in strong 
opposition to this amendment for the simple reason that H.R. 1852 is a 
better bill than the FHA reform bill that passed the House last year. 
And I could go on and on and on talking about why this is a much better 
bill, but I think this would be a step backwards, and I would ask my 
colleagues not to support this amendment. It is not a good amendment.
  The CHAIRMAN. The gentleman's time has expired.
  The gentlewoman from Illinois has 1 minute remaining.
  Mrs. BIGGERT. I guess we will have to agree to disagree that last 
year's bill would have served more borrowers. And we are moving forward 
here, so I would urge Members to support my amendment.
  Madam Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from Illinois (Mrs. Biggert).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Mrs. BIGGERT. Madam Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to clause 6 of rule XVIII, further proceedings 
on the amendment offered by the gentlewoman from Illinois will be 
postponed.


                      Announcement by the Chairman

  The CHAIRMAN. Pursuant to clause 6 of rule XVIII, proceedings will 
now resume on those amendments on which further proceedings were 
postponed, in the following order:
  Amendment No. 5 by Mr. Hensarling of Texas.
  Amendment No. 7 by Mrs. Biggert of Illinois.
  The Chair will reduce to 5 minutes the time for the second electronic 
vote in this series.


               Amendment No. 5 Offered by Mr. Hensarling.

  The CHAIRMAN. The unfinished business is the demand for a recorded 
vote on the amendment offered by the gentleman from Texas (Mr. 
Hensarling) on which further proceedings were postponed and on which 
the noes prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 148, 
noes 280, not voting 9, as follows:

                             [Roll No. 873]

                               AYES--148

     Aderholt
     Akin
     Bachmann
     Bachus
     Baker
     Barrett (SC)
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono
     Boozman
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Carter
     Chabot
     Coble
     Conaway
     Crenshaw
     Culberson
     Davis (KY)
     Davis, David
     Davis, Tom
     Deal (GA)
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Everett
     Fallin
     Feeney
     Flake
     Forbes
     Fortenberry
     Fortuno
     Fossella
     Foxx
     Franks (AZ)
     Gallegly
     Garrett (NJ)
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Hall (TX)
     Hastert
     Hastings (WA)
     Hayes
     Heller
     Hensarling
     Hoekstra
     Hulshof
     Hunter
     Inglis (SC)
     Issa
     Johnson, Sam
     Jordan
     Keller
     King (IA)
     Kingston
     Kirk
     Kline (MN)
     Kuhl (NY)
     LaHood
     Lamborn
     Latham
     Lewis (KY)
     Linder
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     Mica
     Miller (FL)
     Miller (MI)
     Moran (KS)
     Musgrave
     Myrick
     Neugebauer
     Nunes
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Poe
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roskam
     Royce
     Ryan (WI)
     Sali
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shimkus
     Shuster
     Smith (NE)
     Smith (TX)
     Stearns
     Sullivan
     Thornberry
     Tiahrt
     Tiberi
     Wamp
     Weldon (FL)
     Westmoreland
     Whitfield
     Wicker
     Wilson (SC)
     Young (AK)

                               NOES--280

     Abercrombie
     Ackerman
     Alexander
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bartlett (MD)
     Bean
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Bordallo
     Boren
     Boswell
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Brown-Waite, Ginny
     Butterfield
     Calvert
     Capito
     Capps
     Capuano
     Cardoza
     Carnahan
     Carson
     Castle
     Castor
     Chandler
     Christensen
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     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
     Doyle
     Edwards
     Ellison
     Ellsworth
     Emanuel
     Emerson
     Engel
     English (PA)
     Eshoo
     Etheridge
     Faleomavaega
     Farr
     Fattah
     Ferguson
     Filner
     Frank (MA)
     Frelinghuysen
     Gerlach
     Giffords
     Gilchrest
     Gillibrand
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Herger
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hobson
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)

[[Page 24559]]


     Johnson (IL)
     Johnson, E. B.
     Jones (NC)
     Jones (OH)
     Kagen
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind
     King (NY)
     Klein (FL)
     Kucinich
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     LaTourette
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lipinski
     LoBiondo
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McDermott
     McGovern
     McHugh
     McIntyre
     McKeon
     McMorris Rodgers
     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)
     Norton
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Perlmutter
     Peterson (MN)
     Platts
     Pomeroy
     Porter
     Price (NC)
     Rahall
     Ramstad
     Rangel
     Regula
     Rehberg
     Reichert
     Renzi
     Reyes
     Richardson
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Saxton
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shays
     Shea-Porter
     Sherman
     Shuler
     Simpson
     Sires
     Skelton
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Solis
     Souder
     Space
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Terry
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Van Hollen
     Velazquez
     Visclosky
     Walberg
     Walden (OR)
     Walsh (NY)
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Weller
     Wexler
     Wilson (NM)
     Wilson (OH)
     Wolf
     Woolsey
     Wu
     Wynn
     Yarmuth
     Young (FL)

                             NOT VOTING--9

     Allen
     Becerra
     Carney
     Cole (OK)
     Cubin
     Davis, Jo Ann
     Jindal
     Knollenberg
     Tancredo

                              {time}  1432

  Messrs. HODES, ORTIZ, OBEY, RICHARDSON, PASTOR, ALEXANDER, REHBERG, 
TERRY, BISHOP of Georgia, BARTLETT of Maryland, McKEON, LEWIS of 
California, Ms. GINNY BROWN-WAITE of Florida and Ms. JACKSON-LEE of 
Texas changed their vote from ``aye'' to ``no.''
  Mr. LUCAS, Ms. PRYCE of Ohio, Mr. HOEKSTRA, Mr. BOOZMAN, Mrs. 
MUSGRAVE and Mr. KING of Iowa changed their vote from ``no'' to 
``aye.''
  So the amendment was rejected.
  The result of the vote was announced as above recorded.
  Stated for:
  Mr. HERGER. Madam Chairman, on rollcall No. 873, I inadvertently 
voted ``nay.'' I meant to vote ``aye.''


                Amendment No. 7 Offered by Mrs. Biggert

  The CHAIRMAN. The unfinished business is the demand for a recorded 
vote on the amendment offered by the gentlewoman from Illinois (Mrs. 
Biggert) on which further proceedings were postponed and on which the 
noes prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The CHAIRMAN. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 175, 
noes 252, not voting 10, as follows:

                             [Roll No. 874]

                               AYES--175

     Aderholt
     Akin
     Alexander
     Bachmann
     Bachus
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono
     Boozman
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Carter
     Castle
     Chabot
     Coble
     Cole (OK)
     Conaway
     Crenshaw
     Culberson
     Davis (KY)
     Davis, David
     Davis, Tom
     Deal (GA)
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     Everett
     Fallin
     Feeney
     Flake
     Forbes
     Fortenberry
     Fortuno
     Fossella
     Foxx
     Franks (AZ)
     Gallegly
     Garrett (NJ)
     Gilchrest
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Hall (TX)
     Hastert
     Hastings (WA)
     Hayes
     Heller
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hulshof
     Hunter
     Inglis (SC)
     Issa
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Jordan
     Keller
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline (MN)
     Kuhl (NY)
     LaHood
     Lamborn
     Latham
     LaTourette
     Lewis (KY)
     Linder
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McMorris Rodgers
     Mica
     Miller (FL)
     Miller (MI)
     Moran (KS)
     Murphy, Tim
     Musgrave
     Myrick
     Neugebauer
     Nunes
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Poe
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roskam
     Royce
     Ryan (WI)
     Sali
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shays
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Walberg
     Wamp
     Weldon (FL)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)

                               NOES--252

     Ackerman
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Bordallo
     Boren
     Boswell
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Butterfield
     Calvert
     Capito
     Capps
     Capuano
     Cardoza
     Carnahan
     Carson
     Castor
     Chandler
     Christensen
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     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
     Doyle
     Edwards
     Ellison
     Ellsworth
     Emanuel
     Engel
     English (PA)
     Eshoo
     Etheridge
     Faleomavaega
     Farr
     Fattah
     Ferguson
     Filner
     Frank (MA)
     Frelinghuysen
     Gerlach
     Giffords
     Gillibrand
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     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 (OH)
     Kagen
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind
     Klein (FL)
     Kucinich
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lipinski
     LoBiondo
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McDermott
     McGovern
     McHugh
     McIntyre
     McKeon
     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
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Perlmutter
     Peterson (MN)
     Platts
     Pomeroy
     Porter
     Price (NC)
     Rahall
     Ramstad
     Rangel
     Reichert
     Reyes
     Richardson
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Saxton
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Solis
     Space
     Spratt
     Stark
     Stupak
     Tanner
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Upton
     Van Hollen
     Velazquez
     Visclosky
     Walden (OR)
     Walsh (NY)
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wexler
     Wilson (OH)
     Woolsey
     Wu
     Wynn
     Yarmuth
     Young (FL)

                             NOT VOTING--10

     Abercrombie
     Allen
     Carney
     Cubin
     Davis, Jo Ann
     Jindal
     Knollenberg
     Norton
     Sutton
     Tancredo


                      Announcement by the Chairman

  The CHAIRMAN (during the vote). Members are advised that there are 2 
minutes remaining in this vote.

                              {time}  1440

  So the amendment was rejected.
  The result of the vote was announced as above recorded.
  The CHAIRMAN. Under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Holden) having assumed the chair,

[[Page 24560]]

Mrs. Jones of Ohio, Chairman of the Committee of the Whole House on the 
state of the Union, reported that that Committee, having had under 
consideration the bill (H.R. 1852) to modernize and update the National 
Housing Act and enable the Federal Housing Administration to use risk-
based pricing to more effectively reach underserved borrowers, and for 
other purposes, pursuant to House Resolution 650, she reported the 
bill, as amended by that resolution, back to the House with sundry 
further amendments adopted by the Committee of the Whole.
  The SPEAKER pro tempore. Under the rule, the previous question is 
ordered.
  Is a separate vote demanded on any further amendment reported from 
the Committee of the Whole? If not, the Chair will put them en gros.
  The amendments were agreed to.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


           Motion to Recommit Offered by Mr. Price of Georgia

  Mr. PRICE of Georgia. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. PRICE of Georgia. In its current form, I am.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:
       Mr. Price of Georgia moves to recommit the bill H.R. 1852 
     to the Committee on Financial Services with instructions that 
     the Committee report the same back promptly with the 
     following amendment:
       Page 64, strike line 6, and insert the following:
       (4) Affordable housing fund.--
       (A) In general.--For each fis-
       Page 64, after line 13, insert the following:
       ``(B) Limitation on use of funds.--
       ``(i) In general.--Amounts made available pursuant to 
     subparagraph (A) for affordable housing fund referred to in 
     such subparagraph may not be used for, 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.--

       ``(aa) A social security card accompanied by a photo 
     identification card issued by the Federal Government or a 
     State Government; or
       ``(bb) 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).

       ``(ii) Regulations.--The Federal official responsible for 
     administering the affordable housing fund referred to in 
     subparagraph (A) shall, by regulation, require that each 
     grantee and recipient of assistance from such fund take such 
     actions as such official considers necessary to ensure 
     compliance with the requirements of clause (i).''.

                              {time}  1445

  The SPEAKER pro tempore. The gentleman from Georgia is recognized for 
5 minutes.
  Mr. PRICE of Georgia. Mr. Speaker, this is a commonsense motion to 
recommit that would require that any individual or household receiving 
money from the Affordable Housing Fund must present verification of 
legal residency by a secure identification document.
  Americans believe that it's appropriate to ask those receiving hard-
earned taxpayer dollars, taxpayer assistance, that it's right to 
establish that they are legal residents of the United States. It's 
common sense.
  Across the country, whether it's Denver, where in 2006 there were an 
estimated 20,000 illegal immigrants holding FHA insured loans, or L.A. 
or Atlanta, where similar activity occurs, illegal immigrants are being 
given unprecedented access to taxpayer benefits and taxpayer money. In 
many of these cases of FHA loans, the documents submitted with their 
applications later proved to be false, resident alien numbers that were 
never issued, or Social Security numbers belonging to other people, or 
W-2 forms that were fabricated. In the case of financial institutions, 
minimal documents are required by their regulators to establish a new 
customer's identity to open accounts.
  The current loopholes in Federal law are an invitation, they're an 
attraction, they're a magnet to illegal immigration. We must not reward 
those coming here illegally by allowing them the services that ought to 
be only afforded to American citizens and they're here legally. If we 
do so, this results in back-door amnesty.
  This motion to recommit would require that the Federal official 
responsible for administering the Housing Trust Fund ensure that any 
assistance provided from the Affordable Housing Fund must require that 
all adults are legal residents of the United States. Simple common 
sense.
  Recipients may use one of three different forms of identification. 
These forms are considered the most secure types of identification 
because they're harder to forge or to duplicate. They're all issued by 
a government agency which has more checks and balances, more checks and 
balances preventing illegal immigrants or criminals or terrorists from 
obtaining these documents.
  Everyone who is in the United States legally can easily obtain 1 of 
the 3 identification forms, but illegal immigrants, criminals, and 
terrorists would have to go to significant lengths to receive 1.
  Now, we have offered this type of amendment to bills in the past on 
this floor, and it's needed on this bill as well, as there appears to 
be no end in sight to the appetite of our friends in the majority to 
provide taxpayer benefits to illegals against the will and against the 
desire of the American people.
  Now, you will hear that this MTR, this motion to recommit, provides 
for the committee to report back promptly and that that would ``kill 
the bill.'' But we all know that's not true. In fact, the Speaker has 
previously ruled that any bill adopted with this language could readily 
be returned to the House floor with the new language.
  You will hear that those already here illegally cannot get federally 
subsidized benefits. Then because it's clear that there are currently 
some loopholes in our current system, we ought not have any problem 
adopting more enforceable criteria for legal documentation.
  You will hear that if you don't drive or you don't travel to foreign 
countries, that this is an undue burden. But the American people don't 
believe that it is inappropriate to ask those citizens receiving 
Federal taxpayer assistance to first establish that they are legal 
residents of the United States.
  You will hear that this might lead us down the path to using Social 
Security as a universal identifier. But if you read this motion, what 
it does is simply provide for an array of options for secure IDs that 
all Americans and legal immigrants have ready access to. Simple common 
sense.
  You may hear that it's already in the bill. Well, in fact it is, Mr. 
Speaker; but it doesn't cover the Affordable Housing Fund. The current 
regulations to establish a customer's identity do a disservice to the 
American people. Greater clarification in this area will help stem the 
tide of illegal immigrants.
  The Federal Government should not be operating under obscure 
parameters that do not serve our Nation. We can and should strengthen 
these regulations to protect the American people.
  This is a much more appropriate solution to the problem of back-door 
amnesty than simply saying that we're not going to let illegal 
immigrants live in government-subsidized housing. To the best of our 
ability, we must eliminate using hard-earned American taxpayer money to 
subsidize illegal activity. This motion to recommit does just that, and 
I urge my colleagues to support the motion.
  Mr. Speaker, I yield back the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Speaker, I rise in opposition to the 
motion.
  The SPEAKER pro tempore. The gentleman is recognized for 5 minutes.

[[Page 24561]]


  Mr. FRANK of Massachusetts. Mr. Speaker, I ask the Members to follow 
closely because there are some unusual twists and turns even to this.
  In the first place, the gentleman talked about people getting FHA 
loans who weren't here legally, and he made a big point of that. As he 
later acknowledged, the bill, as reported, already deals with that.
  The gentleman from Georgia is so enamored of this amendment that he's 
offering it twice to this bill. Now, he's making up for the fact that 
last week he wanted to offer it and couldn't. The gentleman from 
Georgia had filed in the Congressional Record a version of this 
amendment to offer to the Native American housing bill to prevent 
illegal immigrant Native Americans from sneaking in. And when we 
pointed that out, the gentleman from Georgia for once thought better of 
it and didn't offer the amendment. I think he was afraid that the 
Indians would have said, you know, sir, that's a good idea, why didn't 
we think of it?
  But now, in the amendment, the gentleman offered this amendment in 
committee, so the illustration he gave of how they are getting FHA 
loans when they shouldn't, that's already in the bill. What he has done 
now is to say that this should apply to the Affordable Housing Trust 
Fund, which is not created by this bill. The bill does say that if we 
later, on the floor of this House, created an affordable housing trust 
fund, funds from the FHA excess, if there are any, will go into it. So 
there is plenty of time when we deal with the Affordable Housing Trust 
Fund.
  So last week he couldn't offer the amendment to keep the illegal 
immigrants out of the Navajo housing. This week, he's already got it in 
the bill that covers the bill before us, but he has now got amendment 
envy in the worst way, so he's going to offer it to a program that 
doesn't exist yet, preempting our chance to do it. Even that wouldn't 
be a problem except that he could have said ``forthwith.'' He said 
``promptly.'' It doesn't kill the bill; it significantly delays it.
  If this comes back to the Committee on Financial Services, it is now 
wide open. The committee then has a markup, and any amendment can be 
offered. And I will tell my colleagues that there are Members, yes, 
there is your indication of what will happen, this will be filibustered 
again. Thank you for your honesty. I appreciate it. If this bill comes 
back to committee, it will be wide open.
  We are in the midst of a crisis. The President said last month, 
please pass the FHA bill promptly. Even the United States Senate is now 
acting on this bill. If it comes back to committee, I have 3 days to 
notice a markup. How quickly could we do it? Well, I don't think I can 
have this markup on Yom Kippur. There may be a lot to atone for in this 
amendment, but I can't have it on Friday.
  So we go over to next week. We have markups scheduled next week on 
HOPE VI and on flood insurance and other important issues, so we 
couldn't get to this for a couple of weeks. And then when we do get to 
it, the clappers over there are going to offer a whole bunch of 
amendments.
  Now, if the gentleman just wanted to put this into the program that 
doesn't yet exist, and that he will have a chance to do it later, he 
could have said ``forthwith.'' Members are asked, when they rise on a 
recommit, are you opposed to the bill? The gentleman from Georgia 
honestly answered that he is. And he used the choice he had to 
substantially delay this bill. No, not kill it, but this will delay 
this bill by several weeks in the midst of this subprime crisis.
  I would say to Members, preventing the FHA loans from going there, 
that's already in the bill. Read pages 54 and following. The Affordable 
Housing Trust Fund, it will be created later. I'm sure the gentleman 
will offer that amendment again and you will have a chance to vote on 
it.
  So the sole effect of voting for this recommit is substantially to 
delay the bill on the FHA because the program that the bill covers, 
this amendment applies already from the committee. And the program that 
he would apply it to is not yet in existence and won't be in existence 
until we vote.
  And for Members who worry about some cheap shot ad that says, oh, 
well, ``promptly,'' ``forthwith,'' too complicated, I hope people don't 
vote for this amendment. Many of them will. You will have a chance to 
vote for it. Long before the next election, the gentleman from Georgia 
will have offered this amendment four more times, at least. We've got 
more bills in our committee, and so you will have the chance to vote 
for it.
  Please, if you support the low-income Housing Trust Fund as a concept 
and want the funding available when we set it up, if you support, in 
particular, the President's request that we move promptly to let the 
FHA be available for the subprime crisis, do not vote for a recommit 
whose sole effect will be to delay for several weeks passage of this 
bill. It won't kill it, but a several-week delay. I've got to hold off 
and call the hearing, we have to then have a long markup, they will be 
offering more amendments. It will substantially delay a very important 
bill, and I hope Members will defeat it.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. PRICE of Georgia. 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 the motion to recommit will be followed by 
5-minute votes on passage of H.R. 1852, if ordered, and suspending the 
rules and passing H.R. 3096.
  The vote was taken by electronic device, and there were--yeas 209, 
nays 216, not voting 8, as follows:

                             [Roll No. 875]

                               YEAS--209

     Aderholt
     Akin
     Alexander
     Altmire
     Bachmann
     Bachus
     Baker
     Barrett (SC)
     Barrow
     Bartlett (MD)
     Barton (TX)
     Bean
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono
     Boozman
     Boswell
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Coble
     Cole (OK)
     Conaway
     Crenshaw
     Culberson
     Davis (KY)
     Davis, David
     Davis, Tom
     Deal (GA)
     DeFazio
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Donnelly
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Ellsworth
     Emerson
     English (PA)
     Everett
     Fallin
     Feeney
     Ferguson
     Flake
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Giffords
     Gilchrest
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Hall (TX)
     Hastert
     Hastings (WA)
     Hayes
     Heller
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hulshof
     Hunter
     Inglis (SC)
     Issa
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Jordan
     Keller
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline (MN)
     Kuhl (NY)
     LaHood
     Lamborn
     Lampson
     Latham
     LaTourette
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Marshall
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McIntyre
     McKeon
     McMorris Rodgers
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Mitchell
     Moran (KS)
     Murphy, Patrick
     Murphy, Tim
     Musgrave
     Myrick
     Neugebauer
     Nunes
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reichert
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roskam
     Royce
     Ryan (WI)
     Saxton
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shays
     Shimkus
     Shuler
     Shuster
     Simpson
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Souder
     Space
     Stearns
     Sullivan
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walberg
     Walden (OR)
     Walsh (NY)
     Wamp
     Weldon (FL)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--216

     Abercrombie
     Ackerman
     Andrews
     Arcuri
     Baca
     Baird

[[Page 24562]]


     Baldwin
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boren
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardoza
     Carnahan
     Carson
     Castor
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Conyers
     Cooper
     Costa
     Costello
     Courtney
     Cramer
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doyle
     Edwards
     Ellison
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Frank (MA)
     Gillibrand
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     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 (OH)
     Kagen
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind
     Klein (FL)
     Kucinich
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McDermott
     McGovern
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Perlmutter
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Renzi
     Reyes
     Richardson
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sali
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shea-Porter
     Sherman
     Sires
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wexler
     Wilson (OH)
     Woolsey
     Wu
     Wynn
     Yarmuth

                             NOT VOTING--8

     Allen
     Carney
     Cubin
     Davis, Jo Ann
     Jindal
     Knollenberg
     McNerney
     Tancredo

                              {time}  1514

  Messrs. LINDER, RAMSTAD and DONNELLY changed their vote from ``nay'' 
to ``yea.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. KIRK. 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 348, 
noes 72, not voting 12, as follows:

                             [Roll No. 876]

                               AYES--348

     Abercrombie
     Ackerman
     Aderholt
     Alexander
     Altmire
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bartlett (MD)
     Bean
     Becerra
     Berkley
     Berry
     Biggert
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Blunt
     Bonner
     Bono
     Boozman
     Boren
     Boswell
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Brady (TX)
     Braley (IA)
     Brown (SC)
     Brown, Corrine
     Brown-Waite, Ginny
     Buchanan
     Burton (IN)
     Butterfield
     Calvert
     Camp (MI)
     Capito
     Capps
     Capuano
     Cardoza
     Carnahan
     Carson
     Carter
     Castle
     Castor
     Chabot
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Coble
     Cohen
     Cole (OK)
     Conyers
     Cooper
     Costa
     Costello
     Courtney
     Cramer
     Crenshaw
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, David
     Davis, Lincoln
     Davis, Tom
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Donnelly
     Doolittle
     Doyle
     Drake
     Duncan
     Edwards
     Ellison
     Ellsworth
     Emanuel
     Emerson
     Engel
     English (PA)
     Eshoo
     Etheridge
     Everett
     Fallin
     Farr
     Fattah
     Ferguson
     Filner
     Fortenberry
     Fossella
     Frank (MA)
     Frelinghuysen
     Gallegly
     Gerlach
     Giffords
     Gilchrest
     Gillibrand
     Gohmert
     Gonzalez
     Goodlatte
     Gordon
     Granger
     Graves
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hall (TX)
     Hare
     Harman
     Hastings (FL)
     Hayes
     Heller
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hobson
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Hulshof
     Hunter
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Johnson (IL)
     Johnson, E. B.
     Jones (NC)
     Jones (OH)
     Kagen
     Kanjorski
     Kaptur
     Keller
     Kennedy
     Kildee
     Kilpatrick
     Kind
     King (NY)
     Kirk
     Klein (FL)
     Kucinich
     Kuhl (NY)
     LaHood
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Latham
     LaTourette
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Lipinski
     LoBiondo
     Loebsack
     Lofgren, Zoe
     Lowey
     Lungren, Daniel E.
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Marchant
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (CA)
     McCarthy (NY)
     McCaul (TX)
     McCollum (MN)
     McCotter
     McDermott
     McGovern
     McHugh
     McIntyre
     McKeon
     McMorris Rodgers
     McNerney
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (MI)
     Miller (NC)
     Miller, Gary
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (KS)
     Moran (VA)
     Murphy, Patrick
     Murphy, Tim
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Perlmutter
     Peterson (MN)
     Peterson (PA)
     Pitts
     Platts
     Poe
     Pomeroy
     Porter
     Price (NC)
     Pryce (OH)
     Rahall
     Ramstad
     Rangel
     Regula
     Rehberg
     Reichert
     Renzi
     Reyes
     Reynolds
     Richardson
     Rodriguez
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Saxton
     Schakowsky
     Schiff
     Schmidt
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sessions
     Sestak
     Shays
     Shea-Porter
     Sherman
     Shimkus
     Shuler
     Shuster
     Simpson
     Sires
     Skelton
     Slaughter
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Solis
     Souder
     Space
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Terry
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Tiahrt
     Tiberi
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Van Hollen
     Velazquez
     Visclosky
     Walberg
     Walden (OR)
     Walsh (NY)
     Walz (MN)
     Wamp
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Weldon (FL)
     Weller
     Westmoreland
     Wexler
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (OH)
     Wolf
     Woolsey
     Wu
     Wynn
     Yarmuth
     Young (AK)
     Young (FL)

                                NOES--72

     Akin
     Bachmann
     Bachus
     Baker
     Barrett (SC)
     Barton (TX)
     Bilbray
     Bishop (UT)
     Blackburn
     Boehner
     Boustany
     Broun (GA)
     Burgess
     Buyer
     Campbell (CA)
     Cannon
     Cantor
     Conaway
     Culberson
     Davis (KY)
     Deal (GA)
     Dreier
     Ehlers
     Feeney
     Flake
     Forbes
     Foxx
     Franks (AZ)
     Garrett (NJ)
     Gingrey
     Goode
     Hastert
     Hastings (WA)
     Hensarling
     Herger
     Hoekstra
     Inglis (SC)
     Issa
     Johnson, Sam
     Jordan
     King (IA)
     Kingston
     Kline (MN)
     Lamborn
     Linder
     Lucas
     Mack
     Manzullo
     McCrery
     McHenry
     Mica
     Miller (FL)
     Musgrave
     Myrick
     Neugebauer
     Paul
     Pearce
     Pence
     Petri
     Price (GA)
     Putnam
     Radanovich
     Roskam
     Royce
     Ryan (WI)
     Sali
     Sensenbrenner
     Shadegg
     Stearns
     Sullivan
     Tancredo
     Wilson (SC)

                             NOT VOTING--12

     Allen
     Andrews
     Berman
     Carney
     Cubin
     Davis, Jo Ann
     Green, Al
     Jindal
     Knollenberg
     Murphy (CT)
     Nunes
     Pickering


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised 2 
minutes remain in this vote.

                              {time}  1521

  Mr. POE changed his vote from ``no'' to ``aye.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated for:
  Mr. NUNES. Mr. Speaker, on rollcall No. 876 I was inadvertently 
detained. Had I been present, I would have voted ``aye.''
  Mr. BERMAN. Mr. Speaker, I inadvertently missed the vote on rollcall 
876. I had intended to vote ``aye.''

[[Page 24563]]



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